Home / Companies / Kaya goes for makeover in expansion bid

Mumbai: Kaya Ltd, a unit of personal consumer goods maker Marico Ltd, is repositioning itself as a beauty care company to boost market share and avoid being perceived as just a skincare specialist. The change will take place in the first week of January with a new logo and tagline besides signages put up at its clinics and an advertisement campaign.

Following the 2008-09 financial crisis, Kaya tweaked its business model to offer affordable services such as facials, competing with neighbourhood beauty salons.

He said the company had asked market research company TNS India to conduct a “perception" study six months back. The research covered six cities, including Mumbai and Delhi.

“Kaya came from a problem solution approach. Think Kaya, think doctor. That needed to change," said Sandeep Budhiraja, vice-president, TNS India, who also advised the company to look at small cities for growth.

Hence, the need for a repositioning for which Kaya has enlisted the services of Salt Brand Solutions—an advertising agency set up earlier this year by Mahesh Chauhan of the Rediffusion Group.

The new identity, the company hopes, will help it reach out to a broader set of consumers and scale up its business. According to retail consultancy firm Technopak Advisors Pvt. Ltd, beauty services was a 2,000 crore market as of 2010, growing 25% yearly, led by beauty services chains like Shahnaz Husain Signature Salon, Jawed Habib HairXpresso Salon, VLCC and Enrich.

Kaya currently has 82 clinics in India, spread across 26 cities. “We are looking at expansion opportunities in both metro and non-metro cities. It depends on availability of suitable retail space and catchment potential," said Das.

Since the beginning of 2011, Kaya has seen its pace of growth slow. The chain recorded 41% year-on-year (y-o-y) growth for the January-March quarter. In the April-June 2011 quarter, the rate of growth was 21% y-o-y, and in the quarter ended September it was 7% y-o-y.

“The scope of Kaya’s services is very niche and with higher-priced services, scalability is limited to metros and large cities. Regular services are popular even in smaller cities," said Purnendu Kumar, vice-president in the retail and consumer goods division at Technopak.

In the quarter ended September, Kaya had sales of 66.2 crore and a net loss of 7.5 crore. Kaya acquired the aesthetic skincare business of Derma Rx (Asia Pacific) Pte Ltd in May and the purchase has helped it increase its revenue from products from 12-13% a year-ago to over 20% now.

“We believe the focus on an increase in footfall, products sales and gross margins could help (Kaya) reach break-even by FY13 end," Elara Securities (India) Pvt. Ltd wrote in an 8 November report.

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