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How personal care firm Syona Cosmetics is planning to grow

Syona Cosmetics

Chennai-based Syona Cosmetics Pvt. Ltd that offers cosmetics products and training services to salons and spas, is tweaking its business strategy to deepen its penetration not only in south India but even beyond, and to increase profitability, a top company executive told VCCircle.

The company, which had so far restricted sales of its cosmetics products only to salons and spas, has now decided to add a couple of business verticals to enhance growth.

Raja Varatharaju, one of the co-founders of the company, said Syona is all set to introduce its skin- and hair-care products in the retail space. “We will first test at least three products through modern retail shops in the metro cities in the southern belt,” Varatharaju said.

The company, which has so far been marketing its products to salon chains under the brand name Estrella Professional, will mark its retail foray by marketing those items under a different brand altogether. “We are currently focused on a direct-to-consumer retail strategy. If the pilot goes successful, we may also plan for a national roll-out.”

However, the pricing would remain the same in the retail venture as well. “At present, we are selling our products at a price range of Rs 400-800. It will remain unchanged in the retail space as well,” he said. Syona provides products and services under the brands X-proC, Intenso, Lumiance and Klarissa.

To fund this retail experiment, the company is in an advanced stage of talks with several consumer-focused venture capital firms to raise a fresh round of funding. “We are planning to raise as much as Rs 13.6 crore ($2 million) to back our effort,” Varatharaju said. One of its existing investors Chennai Angels, which had put nearly Rs 1 crore ($150,000) in the company in June this year, may again participate in the fresh round.

The company, which is targeting revenues of Rs 10 crore by the end of FY2016-17, also plans to set up small kiosks for sale of its products. “We might launch one or two small boutique units, each having a size of 100 sq ft on an experimental basis,” he said.

The company is also mulling on adding another source of income by entering into online education space for beauticians.

“One of the biggest catalysts for beauticians’ skill is training. For a brand to train a beautician in a salon, the salon must buy a certain value of products before the trainer comes in to the salon and post-session resolution of queries and doubts in the physical format are time consuming,” Varatharaju said while explaining the move.

The company claims that it is developing a detailed training programme with an elaborate protocol—how to do a facial, a hair spa, a mask and so on—on the website. 

Additionally, Syona is working on a system that consists of a tele-caller and a tele-trainer where salons can seek tele technical support. “This will provide resolution of queries related to products over phone or videos or Skype much faster than training in the physical format,” Varatharaju said.

The company was launched in 2012 by Varatharaju and Anuradha Balasubramanian. Prior to founding Syona, Varatharaju worked with companies such as Henkel, Ford and CavinKare while Anuradha worked with HeyMath, Vodafone and CavinKare.

Cosmetics market
Of late, companies operating in the space have been trying to come up with offerings capturing the ‘natural’ or ‘herbal’ theme. Such players include yoga guru Baba Ramdev-backed Patanjali Ayurved as well as consumer goods firms such as Dabur India Ltd, Emami Ltd and Marico Ltd, besides Hindustan Unilever Ltd.

These makers of beauty and personal care products operate in a segment that Euromonitor estimates grew 13.6% to Rs 74,700 crore ($11 billion) in 2015. This segment accounts for roughly 22% of India’s total fast moving consumer goods (FMCG) market, according to a report by consulting firm KPMG and the Federation of Indian Chambers of Commerce and Industry. 

Syona is also among a handful of Indian cosmetics companies to have raised external funding. Vini Cosmetics Pvt. Ltd has received funding from Sequoia Capital while Mountain Valley Springs India Pvt. Ltd, which sells products under the Forest Essentials brand, is backed by Estee Lauder Companies Inc.

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(Dabur Baby)

Dabur India Ltd. is a manufacturer and supplier of consumer products. It offers health care products (including supplements, digestives and over-the-counter health care products), personal care products (including hair care, oral care and skin care products), food products (including fruit juices and drinks), home care products, consumer health- ethical products, professional range (including fairness, facial and bleach products) and guar gum products. The company was founded in 1884 and is based in Ghaziabad, Uttar Pradesh with additional offices in Delhi and global offices in Dubai, Egypt, Bangladesh, Nigeria, London, United States of America and Nepal.

(Emami Group, BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, She Comfort, Mentho Plus Balm, Fast Relief)

Emami Ltd. is a manufacturer of herbal personal care, health care and well-being products. It offers its products under the brands BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, She Comfort, Mentho Plus Balm, Fast Relief, etc. The firm caters to the requirement of FMCG (fast moving consumer goods) industry. The firm is also engaged in real estate, hospitals, retail, newsprint manufacturing, pharmacy retail chain, contemporary art, edible oil and biodiesel sectors through its group companies. The company was founded in 1974 and is based in Kolkata, West Bengal.

Marico Ltd. is engaged in providing personal care, skin care and ayurvedic products. It provides consumer products including coconut oils, other edible oils, hair oils and other hair care products, fabric care products, processed foods, soaps and baby care products. It also offers skin care and global ayurvedic products. It manufactures and markets products under the brands, Parachute, Nihar, Saffola, Sweekar, Hair and Care, Revive, Shanti, Oil of Malabar, Mediker and Manjal. The company was founded in 1987 and is based in Mumbai, Maharashtra with additional office in New Delhi.

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