Kaya to go capex-light to fuel growth, sustain margins

Homegrown consumer goods player Marico's beauty and wellness arm, Kaya, that reported its maiden profit in the June quarter, will adopt a capex-light strategy to fuel growth and sustain margins, including opening more low-cost Kaya Skin Bars and selling its products online.
Following its demerger from Marico in April and subsequent listing in July this year, Harsh Mariwala-promoted Marico Kaya Enterprises had reported a marginal net income of Rs 63 lakh on a revenue of Rs 70 crore in the June quarter. This was the maiden profit by the company that was set up way back in December 2002.
The Kaya chain is present in 26 location in the country with 87 clinics in India and 18 overseas, mostly in the Middle East, serving over 7 lakh customers.

"We are adopting an asset-light strategy to sustain margins and profitability. This will see us opening more low- cost standalone kiosks called Kaya Skin Bars and focusing on selling our products online, for which we have tied up with a few e-commerce portals already. Also, we are already running four pilot skin bars in Bangalore and soon we will have more such bars," Marico Group chairman Harsh C Mariwala told PTI.
"Kaya Skin Bar is a product-only format. This will enable us to engage with our customers at multiple touch points. We also hope to scale up this model much faster as being a product-only model it provides us with an opportunity to look at franchisees as an option to scale up. By the end of the year we are planning at least 20 skin bars," he added.

Kaya chief executive S Subramanian said that while a normal Kaya skin clinic costs around Rs 1 crore to set up, a kiosk would require just about Rs 35-40 lakh. Kaya Skin Bars are a new retail format focused on offering more products than services, with the head-count capped at three per outlet as against eight-ten people at regular clinics.

The first Kaya Skin Bar was launched in Bangalore in January 2013 and each store is of less than 500 sq.Ft area, while a skin clinic measures over 2,000 sq.Ft, Subramanian said.
While the skin bars offer skincare products, skin clinics provide technology-led cosmetic dermatological services, Subramanian said.

In other words, the skin bars will compete with The Body Shop, Kiehl's and L'Occitane, among others.