Shiseido targets acquisitions to expand focus beyond China "hf of cosmetics group frecass return of turism nest year but wats to dvesyin US and Europe Shiseido will step up acquisitions of skineare brands to diversify its footprint beyond China following a radical restructuring ofits assets during the Covi Financial Times. 19 crisis its chief executive told the‘Masalilko Uotani said in an interview that Japan’s biggest cosmeties group was preparing for a ‘boost on the expected return of Chinese tourists to Japan by next summer. But he added that Shiseido would escalate acquisition efforts in the US and Europe, and was also ready to explore ‘markets such as India and Aftica once the pandemic was under control. ‘The company remains bullish that rising consumption and the growth of the middle class will, continue to drive sales in China, its biggest market, where it generated go per cent ofits revenue in the first six months of 2001 ‘otani said the resumption of Chinese tourism would buoy sales in Shiseido's home market as he forecast the easing of border restrictions in the months following the Winter Olympics in Beijing in February, But analysts have noted that the Japanese group's heavy dependence on China posed a risk amid rising concerns about the impact of Beijing's ‘common prosperity” drive and crackdown on the tech, education, gaming and property sectors, among others. “We believe the longer-term potential is extremely high in China and we wil firmly capture this opportunity,” Uotani said. “But as our dependence increases, there will be questions on contingency and portfolio management, owe want lo strengthen our efforts even further inthe US ‘and Europe.” ‘The diversification strategy comes as Votant has declared the “near completion” of Shiseido’s restructuring spree, which followed a sharp falloff in demand because of Covid lockdowns and travel curbs.private equity firm Advent. It also offloaded its personal care business to CVC for $1.sbm in February, ‘The asst sales underpinned Uotant’s plan to focus on higher-margin skincare produets, where Shiseido hopes to become a global leader by 2030. “We are exploring mergers and acquisitions so that we ean respond to every kind of skincare need," Uotani said. He added thatthe group would expand investments in digital technology and data analysis in response to growing consumer focus on wellness triggered by the pandemic. After slimming down its product offerings, Shiseido expects to return toa net profit of ¥35.sbn (S310.5m) this year, after suffering losses of ¥a1-7bn in 2020, Historieally, Shiseido has struggled to establish a presence in the US, underscored by its disappointing $1.9bn acquisition of Bare Escentuals, the New York-based natural make-up company, in 2010. It wrested with integrating the brand and was forced to take a $623m ‘writedown in 2017, ‘But the Japanese group plans to build on the success of cosmetics brand Nars and skincare line Drunk Elephant to expand its international footprint beyond Asi, where it generates more than 60 per cent ofits revente. As part of those efforts, Votani has aggressively hired loeal talent inthe group's target markets, and adopted English asthe company’s official language in 2018. “We now have a pretty solid line-up of local talent to address the markets in Europe, the Middle East the US and Latin America," Uotani said. “We had a short pause with corona, but once i's cover, which regions we are going to enter will become a critical strategy going forward.”yesh Te Firsncal Ties tes 200 Allg earn