A beautiful rise

Written by Sushila Ravindranath | Sushila Ravindranath | Updated: May 28 2014, 10:15am hrs
Chennai-based Naturals hair and beauty salon has 365 outlets as of today. Its co-founder CK Kumaravel has big plans of going pan-India and hopes to increase the number of salons to 650 this year. To get brand recognition and make an impact beyond south India, Kareena Kapoor has been roped in as the brand ambassador of Naturals. It is already the largest chain in India in the beauty business.

The first Naturals salon was set up in the year 2000. Kumaravels wife Veena wanted to do something on her own as their children were in school. Her husband helped her set up Naturals. In 2000, Chennai did not have many good salons. People ran beauty parlours at homes or one had to go to a five-star hotel and spend a fortune. Naturals was launched with the idea to give five-star quality with three-star pricing when people visited a parlour. The initial idea was to use only natural productshence the name Naturalsbut they soon shot down the idea. Because it was not a feasible option if we wanted scalability.

Kumaravel was struggling with the Raaga range of products he had launched in 1993. He had introduced Raaga Herbal Shikakai powder. It did very well and he wanted to expand. He extended the range under the Raaga brand to hair oil, soap and amla-based chewing products. None of them did well. He says that he was clueless about going to new markets. He was also facing technical problems when he wanted to scale up production. He finally shut down the business and sold the brand to his brother, CK Ranganathan of CavinKare.

The salon business picked up. Naturals was turning out to be a natural fit to a rapidly changing city. Kumaravel says the job explosion in the IT sector brought in an ever-expanding clientele. We are really the product of the IT revolution. Every small town in Tamil Nadu wants a beauty parlour. The potential of this business hasnt been fully realised yet.

The first salon was unisex and Kumaravel had his doubts about this concept working in conservative Chennai. To his surprise, Chennai did not bat an eyelid. By 2003, Kumaravel had wound up his business and was fully involved in Naturals. Expansion became a problem. Banks were not willing to fund beauty business. They thought a loan of R60 lakh was excessive to start a beauty parlour. They could not think beyond R3 lakh. After knocking at 53 doors, the 54th bank manager saw merit in Naturals.

By 2006, six salons had been opened. We were making profits. We were comfortable. When we wanted to expand, many people advised us against it, including people from LOreal. Then I read Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter. It influenced me a great deal and I knew we had to move forward. I am addicted to growth. My earlier failures were due to my approaching things wrongly. Kumaravel decided to use the franchisee route to grow. The inspiration came from Anita Roddick of Body Shop, which went global by acquiring franchisees. Anita Roddick is my role model.

It turned out to be much tougher than Kumaravel anticipated. Naturals advertised in the papers for franchisees. We got 340 applications. They had to fill a form based on what I learnt from Body Shop model and 33 replied. Of the 33, only three showed serious interest. Once I connected with them, they too lost interest. Naturals was neither a big brand then nor an MNC. Franchisees were required to put in R30 lakh and it seemed a big amount. People were not quite convinced about haircare and grooming as an industry.

Kumaravel then approached the wives of friends and relatives. He convinced several of them to be Naturals franchisee partners. He is a great believer in women power. He wants women to be independent. Women are very good franchisee partners. They are usually hands-on and are perfect for hospitality and beauty business. They are more grounded than men and do not get carried away. Today, 70% of my franchisees are women.

With Naturals salons becoming ubiquitous in Chennai, the business took off from 2010. Kumaravel is committed to network marketing. Franchising is using other peoples money and time responsibly, he says, explaining the ethos of the business model Naturals has taken up. The franchisees are 50-50 partners. Kumaravel starts a new salon and Veena manages the staff. The franchisees take care of day-to-day operations. Veena and Kumaravel oversee HR, training, new projects tie-ups and the introduction of new services. Naturals salons feature all big beauty care brands like LOreal, TIGI and Kerastase. They follow new trends and give what Indians want. It will take MNCs years to adapt to India, Kumaravel states.

Naturals has diversified into more upmarket activities. There is Naturals Lounge (premium services), Naturals W (exclusively for women) and Page 3 (luxury services). Kumaravel is test marketing an exclusive salon for men called Star Cuts in Coimbatore. He has opened two outlets there. The local Barbers Association protested. The irony is that the association presidents son is an IT professional and there is a serious manpower shortage. I told them that we will help them expand and grow.

Kumaravel is setting up an academy to train people in the styling business in Chennai. The 20,000 sq ft space will take in 1,800 students. Short-term and one-year courses are being offered. I can absorb all of them, he says. Naturals has 300 salons in the south. When we launched, Lakme had 130 salons all over India. Now they have 210. We see as our competition as YLG in Bangalore and Enrich in Mumbai. After roping in Kareena Kapoor, we got a lot of enquiries and are setting up at least four salons outside south every month. Once this number reaches 100, growth will have its own momentum.

Naturals turnover is touching R300 crore. I am not looking at growth in turnover now. I am looking at 1,000 women entrepreneurs, 3,000 salons and 50,000 jobs in the next six years. We also want to be the largest salon brand in Asia.