CK Kumaravel is the CEO and Co-founder of the Naturals chain of salons with his wife Veena. CKK, as he is better known, has created one of the most successful chain of spas that began on a humble note in Chennai and recently launched its 128th outlet in the country with branches in Pune, Bhopal, Ooty, Calicut, Ahmedabad and more. There are plans to get into smaller towns, create job opportunities for women while exploring the franchise mode. In a conversation with exchange4media CKK shared his marketing strategy. Excerpts.
We have seen Naturals go national in a big way in the past few years. What has been your marketing strategy?
India is a very micro-entrepreneur market and trust deficient country, where the franchise system was not gaining traction when we entered the market and played the trust game. We took care of the manpower business which is the biggest problem in the salon business. We did advertising and made sure that the business is franchised, helping more entrepreneurs to come in. Lot of things we did by default and not by design.
This was my wife Veena’s first business venture as we wanted her to get self employed. After owning six salons, we figured that we would not be able to scale up, so we started with franchising. While franchising we look at qualities such as integrity, willingness to be the owner, ability to lead the team, good customer care skills, gracious franchise partner, preferably women.
Today we have 210 financially independent women entrepreneurs and 80 per cent of them earlier were simply homemakers. That to me is a mark of achievement and not the number of salons we launch or the number one status. That is Natural’s recipe for success.
What were the challenges for Naturals? Having started in 2000, what according to you is the biggest change in the beauty and wellness sector?
One of the biggest challenges in the salon industry is the absence of quality manpower. The perspective of the society towards this industry is stopping many of them from coming forward and picking up this job as a career. Building a brand was the biggest challenge for us at the beginning. First three years we were at a loss. All these are an integral part of any business. All growth stories have common elements.
Please talk about some unique recent initiatives from Naturals?
Our recent tie-up with Godrej Good & Green, the CSR initiative of the Godrej group to establish a training academy for beauty and salon is an initiative to be mentioned. As we have 400 salons and offer jobs to around 6,500 people, we are looking at 50,000 employees of the company and hence to achieve that we partnered with Godrej.
Under the collaboration, we will establish an academy in Marg Swarnabhoomi, a multi services SEZ(Special Economic Zone) in Chennai. We plan to first start with training 250 students in a batch for a course of three months. While the cost of training one student might come to around Rs 40,000, we would be charging 10 per cent of it from the student, while the rest would be taken care of by the academy. It could be called as Godrej Naturals Hair and Beauty Academy.
The salon industry is regarded as a taboo industry and especially people in the south feel that it is a caste-based community activity. I had a unique challenge of changing that mind set. Godrej is trusted brand and an association with them will be a huge game changer for the industry.
We are also coming up with a new movement called ‘Housewife-free India’ in a few months' times.
What are your earmarked marketing and advertising spends this year?
Our spends for this year would be somewhere around Rs 5 crore for South, Rs 5 crore for the non-South markets and Rs 10 crore for Kareena Kapoor's TV commercial.
How much revenue comes from the North, West and East for Naturals?
We have likewise entered the tier I, II, III and IV markets. We have got 40 salons in the North and West market each averaging 60 lakhs per month. Around, Rs 25 crores come from the non-South market. South is around Rs 300 crores.
As Naturals is going big nationally, what is the growth expected from the company?
Last year we had made Rs 270 crore and this year it is expected to reach Rs 380 crore. Next year we are looking at getting close to Rs 680 crores from all the markets.
Do you believe that celebrity endorsement actually helps a brand to grow significantly in the market? If so, how has that helped Naturals grow in a big way?
Celebrity endorsement for a brand makes 100 per cent sense in India. Indians worship celebrities and believe them. Any product used by their favourite celebrity, has tremendous aspiration.
Why did you replace Genelia D’Souza with Kareena Kapoor as your brand ambassador?
Genelia is a superstar in the South, she is a girl next door and everybody loves her here. But in the North, people know her only as Ritesh Deshmukh’s wife. She is not considered to be a star in the non- South market and was not getting traction that the brand requires to attract B2B franchise partner. So, we needed a style icon and no one else can fit into that role t better than Kareena Kapoor. Not that Genelia is not good, she had allowed us to move from 75 to 375 salons. Kareena will help us to move from 375 to 3000 salons in the future.
How have you been branding after you went national?
To cover that lacuna that we faced with the small agency, which was unable to understand the national requirement, we roped in JWT as our agency. We will be coming up soon with a national TV commercial.
You recently signed a deal with UAE-based SBA Corp to take Naturals to all GCC countries. Please elaborate on your plans.
We have appointed SBA Corp as our master franchise for GCC countries. We want to become the nearest salon in all GCC countries and hence we are opening 16 salons in Phase I and aiming to have 300 salons in the next three years time in GCC countries.