Inês Caldeira, CEO of L'Oréal Thailand, accepted to talk with ECO about the challenges of managing three completely different markets from those she used to deal with, the country and the world.
9526km distance London from Bankok, but in the digital world we live in that is a mere geographical detail that did not move ECO from interviewing Inês Caldeira, CEO L’Oréal Thailand, Laos and Cambodia. In an interview to Executiva in March 2018, Inês stated that she was “the example that everything is always possible”. The CEO accepted to talk with ECO about the challenges of managing three completely different markets from those she used to deal with, the country and the world. Being one of the most recent members of the World Portuguese Network and also considered one of the most influential Portuguese CEOs, Inês Caldeira did not forget to stress that management is also about humanism and idealism.
Inês, you graduated in Economics from NOVA University of Lisbon and have ever since been working for L’Oréal. Did the beauty industry make part of your career plans?
During my time at University, it had become clear that I wanted to pursue a career in the corporate world rather than in the public sector. Despite consultancy firms being very prestigious at the time, I always felt attracted to the FMCG’s product and dynamism (fast-moving consumer goods). L’Oréal was a dream company, not only because of the sector but especially due to the reputation it already had at the time in Portugal.
How would you evaluate the sector’s evolution over the last twenty years, considering the urging adaption to a globalised world?
The last 20 years were extraordinary to the industry. The last year, in particular, presented a growth of more than 5.5%, the greatest of the last two decades.
There are several reasons for this phenomenon from which I will stress three. On the one hand, the Beauty Industry is known for is resistance to unfavourable economic cycles, the so-called Lipstick effect: when GDP decreases, the industry keeps its consume levels because people need small gestures to keep their positivity. On the other hand, we have been watching the emergence of middle-income classes in different parts of the globe, which allows for millions of new consumers to buy a cream or a shampoo for the first time. Finally, the digital revolution has been a strong accelerator of the industry. Instagram, Facebook and YouTube maximised the industry’s influence, facilitating sharing and democratising the access to most elementary make-up and colouration tutorials.
What are the current opportunities and challenges for the industry?
I believe the next twenty years will be even more disruptive. Artificial intelligence augmented reality, voice commands will allow us to reach a new level of experience, which will be followed by an exponential increase in e-commerce.
Did you notice great differences between western and eastern corporate cultures or do you believe globalisation has already knocked down those barriers?
Multinational corporations create common policies but do not allow – rightly so – the uniformization of cultural and consumer standards. The experience here has been incredible, and I could not be more fulfilled as my learning curve accelerated again, perhaps as never before.
I dare to say that there are more differences than similarities. This is an emerging region as opposed to a more economically matured Europe; the phenomenon of concentration of distribution in Europe contrasts with the highly complex structure of circuits and clients that is in place here; the market dynamism and innovation is strongly driven by Japanese and Korean influences; the passion for skincare in Asia finds no possible comparison anywhere else in the world, while in Europe, especially in the South, hair still dominates the consumers’ interests.
Above all, I believe most differences reside in people management. From my point of view, in here there is a stronger hierarchical structure, a still-developing feedback culture, little desire to go abroad but an increasingly healthier balance between work and leisure; increasing long-term cooperation and construction.
Do you consider that the three markets you are working with now present much different consumption patterns than those of markets where you have worked with before such as Portugal?
The consumption patterns are very distinct. The predominance of skincare as opposed to haircare, a more developed and sophisticated skin care products routine, a substantially different demographic pyramid that favours the consumption of hydrating products and very distinct social codes made whitening (products for skin uniformization) boom; phenomena of humidity and pollution led to the development of UV products; and, of course, a very specific socioeconomic structure contributes to the fact that more than 15% of the market is based on sachets (single doses) at accessible entry prices.
In conclusion, there are more differences than there are things in common. That is why this opportunity is so fascinating and should not be missed by someone who just loves the industry as I do.
Not considering Thailand as a necessarily poor or closed market, both Laos and Cambodia present poverty index above 14%, according to the most recent data of the Asian Development Bank. Not speaking of the fact these two countries are still considered politically closed, Laos has been even considered by The Economist’s Democracy Index as an “authoritarian regime” in 2016. As CEO, did you find any challenge in dealing with these specific political and economic realities?
Both three countries are pro-business, and, in that sense, we find no difficulty. We observe, though, an increasing desire for beauty products, because somehow correspond to social climbing aspirations and status. One cannot forget the enormous importance of beauty in self-esteem and women empowering, for instance. The more urbanised these countries get, the more women will enter the labour market and consumption will boom.
According to L’Oréal’s 2018 Annual Report, 79% of “of products launched in 2018 had an improved environmental or social profile”, and 88% “of brands assessed their environmental or social impact”. Do you believe the company will reach its goal of “100% of products having an improved environmental or social profile” by 2020?
I am sure that we will reach those goals. The group’s mobilisation towards their completion is extraordinary and the measures taken so far are very concrete. I do believe that we should focus on the programmes and initiatives we have and give them the widest reach possible. I must confess that in an age when we all look for a “why?” and a “sense of belonging”, these initiatives are today one of the things that please me the most about working for this group.
It is undeniable the historically profound relationship between Portugal and Thailand. As Portuguese and as a CEO in Thailand, do you consider the Thai market as a potential destination for Portuguese companies to explore?
The work that has been developed by the Portuguese Embassy in Thailand is amazing and is indeed an excellent homage to the long years of a historic relationship between the two countries as you mentioned. I believe that are many opportunities, especially on the technological side and for start-ups, but I do believe also that we can stand indifferent to the various bureaucratic and legal challenges this country presents…
Returning to the Beauty Industry, some Portuguese brands have emerged and reinvented themselves in this sector. How would you describe the panorama and the evolution of the sector in Portugal?
I am very proud of the re-emergence of some brands that reinvented themselves and capitalised their potential around the brand “Portugal” and the touristic boom. We did exceptional work in that rebranding. We brought millions of foreigners to know Portugal. The next step, I think, is to take Portugal to the world again through its brands. We have an extraordinary case of success – Farfetch. However, almost nobody knows it is Portuguese. We lack scale and global marketing professionals.
Some talk of the potential of Portugal to serve as an intermediary between Asian economic interests, namely Chinese, and Europe. Do you believe this trend will be maintained in the future?
I believe we have an amazing diplomatic corps and professionals that project Portugal at a very important level, so I would not be surprised by that. Our historical relationship with Asia is undeniable and that puts us in an interesting position, especially because of the “trust factor” that is culturally relevant in these countries. All initiatives that give Portugal visibility are fructiferous, particularly those that have given the country a geopolitical significance amongst its European and international partners.
Do you think of returning to Portugal? If you could highlight two challenges for the future of Portugal, what would they be?
I have spent the last four years in Portugal, but this opportunity gave me the chance to leave the country again and I could not resist. While I do not have a specific date for it, I will for sure return one day. It would take a really interesting project to make me want to go back. I believe the biggest contribution that I can give to my country is to carry with me a bit of its talent worldwide.
From my point of view, Portugal witnessed a true miracle over the last years. After the intervention of IMF and other institutions that made up the so-called Troika, Portugal managed to reinvent itself, to find a reason d’être with regards to tourism and to gain self-esteem, also gaining the opportunity to show the talent it has and to surf the start-ups’ wave. We now need to gain an international scale and to protect our reputation by implementing long-term policies that provide investors with the confidence to invest.