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Want to make our products affordable: Kaya Ltd CEO Rajiv Nair

Nair intends to launch a progressive web app through which customers can book appointments for the required service or treatment.

February 27, 2018 / 05:34 PM IST
 
 
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It's been a whirlwind of a year for Rajiv Nair, who joined Kaya Ltd as the chief executive officer in November 2016.

“We have made a lot of changes in the last one year. It has been a year for me as well in Kaya. So what we have done is one is rather than just looking at expansion, we have tried to refresh the brand,”  Nair told Moneycontrol in an interview.  Before joining Kaya, he was CEO of the French men's wear brand Celio.

At Kaya, apart from rebranding the clinics and expanding product portfolio, Nair has cut prices and given a push to network expansion. The steps have already yielded fruits with the company's revenues growing by 40 per cent since Nair joined.

Taking advantage of technology, Nair now intends to launch a progressive web app through which customers can book appointments for the required service or treatment.

Excerpts from the interview:

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Q: With so much change happening in technology and a lot of focus on Ayurveda, where does Kaya stand and are there any plans for expansion? 

We have made a lot of changes in the last one year. It has been a year for me as well in Kaya. So what we have done is rather than just looking at expansion, we have tried to refresh the brand. The tonality of the brand is changing, which means even the logo of the brand is changing from Kaya Skin Clinic to Kaya Clinic. We will now give you a portfolio of services and won't focus on skin only.

We are trying to make a mark in hair and largely our focus has always been women customers. Our focus is to build a portfolio of services like we did in skin. We started a year ago and we have grown by more than 30-40 percent.

So from 43-44 stock keeping units (SKU) of products, we are now at 70 SKUs. Hair is a bigger market than skin and in the services space, we will make hair a bigger player than skin.  We have also invested a lot into technology in the last six months.

How many stores do you have?

We 103 stores of our own in 26 cities and we have close to 128 points of sale for our products.

So these 128 points of sale are additional?

Yes, those are in addition to the 103 stores. Those are shop-in-shops, so the pharmacy chains, high end beauty stores which are not really organised beauty stores. We want to reach out to more customers and we are building a portfolio product which is also quite easy to access in terms of pricing.

Earlier our products would be priced at Rs 1,200, Rs 1,500, Rs 2,000, now there are enough products in the Rs 500-700 segment, Rs 300-500 segment.

Are you sourcing these products?

We are manufacturing through contract manufacturing. The formula is ours, so we do not really pick somebody else's formula and brand it and sell it. Most of our products are developed by us.

And while redesigning the stores, how steadily are you expanding the number of stores?

In our portfolio, we have exactly three stores, which are suspect locations. There are about nine stores of ours which are EBITDA negative, but the 90 stores that we have are EBITDA positive. We will ensure that we are able to make them load our corporate costs into it and make it a profitable proposition.

Are you also planning to come out with an app?

We are contemplating between having a native app or a progressive web app.

Have you seen an increase in the number of footfalls compared to last year?

We have about 7-8 percent growth in consumers, but more importantly, what we have seen also is our number of visits per consumer has gone from somewhere close to 5.5 in a year to about 6.11 in the last nine months.

What is the pricing of your products on an average?

A huge amount of change has happened in pricing right now in Kaya. For example, now you can buy one facial at Rs 1,999 in Kaya, which was earlier in the range of Rs 3,000-3,500. A full body hair free package which we used to do with laser used to be above Rs 1 lakh but at present it is available for Rs 69,900. So there has been a 10-15 percent drop in our pricing.

So how many stores can we expect in a year?

I would say 5-6 stores in a year because our investments in clinics are fairly high. They are not low priced.

In the PAT level, you have profitability?

No, actually we are at an EBITDA level positive, but at a PAT level we are not positive. We also have an international business which is in the Middle East which are the last couple of quarters we have had some problems because of the Saudi issues but now that is stabilising.

After trickling down to the masses, the qualities and the standards have been in place and the investment across Kaya. So are your margins growing or reducing?

Margins are in fact growing. So last year, at the same time for the last quarter number, year-to-date, we were at 76 percent margin . Last two quarters, we were at 79 percent margin. So margins are growing but we are reducing cost. We have to focus on cost reductions but at a clinic level, we are profitable.

So, what would be the number?

There are only 2-3 stores that are there in the business who are eating into our profitability. Store profitability is our concern.

Himadri Buch
first published: Feb 27, 2018 05:24 pm

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