RISK FACTORS
Risk Analysis
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Risk01
Brand portfolio
The risks we face
- Although we develop a range of brands that enrich lifestyles, most (68%) of our consolidated revenue comes from just two brands: BOTANIST and SALONIA.
- Thus, our overall performance is vulnerable to market trends affecting these two brands.
How we're managing the risks
- We’re working to stabilize the revenue from the two brands. Meanwhile, we keep diversifying our brand portfolio to reduce our dependency on a small number of brands.
- Examples of additional brands we’ve developed include YOLU, DROAS, and WrinkFade. We’ll keep diversifying our portfolio in this way.
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Risk02
Attracting and nurturing top talent
The risks we face
- Our future success (financial growth, global expansion) depends on our ability to attract skilled and passionate talent at the right times.
- If the labor market grows more competitive, we may struggle to attract and nurture such talent. Our performance would suffer as a result.
How we're managing the risks
- We’re stepping up recruitment and creating a more motivating workplace.
- As part of this, we launched a new talent management system in July 2022. This system focuses on employee motivation and encourages employees to gain new skills.
- We’ll keep investing in efforts to attract and nurture top talent.
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Risk03
Global strategy
The risks we face
- Our growth strategy includes a project to globalize our brands. We market our brands overseas, mainly in China and other Asian markets.
- Thus, our overall performance is vulnerable to local economic volatilities and geopolitical risks (for example, a deterioration in the country’s relationship with Japan), which can occur unexpectedly.
How we're managing the risks
- We’re improving intelligence gathering so that we can be forewarned about threats and take timely action.
- Until 2022, our overseas investments focused on China. However, we’re now looking to expand our sales channels to a wider array of countries.
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Risk04
Social and environmental sustainability
The risks we face
- The world increasingly expects companies to commit to social and environmental sustainability (e.g. SDGs). This trend could reshape the business and socio-cultural landscape.
- If our products fail to reflect these new market realities, then our performance would suffer as a result.
How we're managing the risks
- As part of our corporate philosophy, we commit to sustainable business practices. For example, we use biomass packaging, support reforestation, and donate products to good causes. We’ve also signed the UN Global Compact, demonstrating our commitment to sustainability at a global level.
- We’ll continue taking action to increase the positive social and environmental impacts of our businesses.