Just over a decade-old Naturals, which has a dominant presence in the beauty business across southern India, is now embarking on a journey that its co-founder C K Kumaravel hopes will not only make it the largest salon brand in the country, but also in Asia.
Some would say it's an audacious claim, but going by Kumaravel's track record, it may well within target. The brand has 332 salons and the plan is to increase it to 650 by the end of this year. The number includes outlets in Dubai, UAE, Nepal and Sri Lanka, apart from its existing presence in Colombo.
To rapidly expand its presence in northern India where it has little brand recall and in countries with a strong non-resident Indian population, Naturals has roped in Bollywood actress Kareena Kapoor as its brand ambassador reportedly at a whopping price of Rs 5 crore.
Kumaravel says the expansion will make Naturals the largest salon brand in Asia as the current leader, Philippines-based 'Style', has 604 outlets across the continent.
That's a huge distance for a brand that started its first beauty parlour in Chennai in 2000, mainly because Kumaravel wanted to help his wife Veena to start a new business that will keep her busy while their kids were away in school. The business broke even after three years and the couple opened their second salon. "At this point, we just wanted to be known as a reputable brand, with a decent monthly income," recalls Kumaravel.
But his initial modest ambitions gave way to a larger game plan though the hurdle was getting funding, as even banks those days wouldn't fund salons. But Kumaravel soon figured out that scaling up wasn't all that difficult if he adopted the franchise model.
The journey, however, was not an easy one. In an earlier interview, Kumaravel said when he first advertised for franchisee partne-, nobody came forward which prompted him to approach his friends and relatives for investing half of the cost of each outlet. In one year, Naturals managed to set up 13 salons.
He hasn't looked back since then. Franchisees are now the partne- of the brand and both work on a flexible royalty model, which starts only after the franchisee starts making money. Kumaravel believes the mantra for the success of the franchise is that he puts 50 per cent of the amount and the franchisee puts another 50 per cent.
Part of his optimism came from his belief that rural India has become brand conscious because of media and television explosion and people there did not have many avenues to spend money. Plus, competition wasn't tough as they mostly comprised friendly neighbourhood salons which were mostly unorganised.
Naturals has moved beyond and has also launched Rs Page 3' targeted at the luxury segment and Naturals Lounge, which is a bridge between the mass market brand and the luxury brand.
Another thing he learnt quite early is that using only natural products - the reason for the name, Naturals - was not a scalable model. So the company moved away from natural products only.
Naturals has also established an academy to train professionals who want to take up a successful career in beauty counselling. It is looking at entering the online beauty products space and will sell skin care and hair care products.
Kumaravel is dismissive of competition from foreign salon brands, which, he thinks, yet to understand the Indian market, especially beyond metros.
According to estimates, the organised salon industry is around Rs 10,000 crore and has been growing at around 25-30 per cent.