Osim upbeat about India operations

RETAIL: The company plans to open another 10 showrooms in Tier-1 and Tier-2 cities.

There is nothing typical about Ron Sim Chye Hock. The founder and chief executive officer of Osim, a $600 million lifestyle health-care product company, began his sole proprietor business of retailing an array of household goods such as knives and knife-sharpeners under R Sim Trading Company in 1980. His foray into health-care-related products was with hand-held massagers and foot reflexology rollers.

Today, Osim operates a point-of-sales network with more than 1,100 outlets in around 360 cities across 30 countries in Asia, Africa, West Asia and North America. It also operates in Australia and the United Kingdom.

In India, the company has a master franchisee agreement with Paramount Surgimed and caters to the affluent Indians with its high-end massage chairs that cost Rs one lakh-plus.

Shaily Grover, managing director, Osim India, claims, "We sell 5-7 high-end massage chairs every month, and the customers are primarily industrialists and large corporate houses."

Osim India, explains Sim, is concentrating on high-end health products. "Massager chairs, iSqueez, iPamper, foot revitalisers and eye care massagers are just some of our products that have been a runaway hit among Indian clients," he says.

Osim launched its products in India three years ago and has been growing at more than 100 per cent with 20 exclusive stores and 40 point-of-sales in Delhi-NCR, Ludhiana, Kolkata, Bangalore, Chennai, Mumbai, Hyderabad, Jaipur and Indore. Osim India plans to clock a turnover of Rs 100 crore by 2010.

Grover and Sim are bullish about opening another 10 showrooms in tier-1 and tier-2 cities and at least 10 shop-in-shop formats in 2008.

To achieve a growth rate of 40 per cent, Osim has gradually moved away from being a retailer and is beginning to position itself as a franchiser of Osim products.

"We lower the capital risk in new geographical markets and enable our management to concentrate on strategic marketing and brand cultivation," reasons Sim.

The franchise fee is in the $10,000-$100,000 range and the royalty is collected based on the sales made by the franchisees, which is between 0.25 per cent and 5 per cent.

Although the company is battling a sudden influx of fake copies of its products from China, this is not keeping Sim from adding more than a dozen new health-care products for its India market. Its new range of products to enter the Indian market include massage chairs worth Rs 5 lakh and innovative personal fitness products.

According to the health-care products industry estimates, the international market size for massage chairs is $2 billion, while the domestic market size is Rs 1,000 crore "" it is expected to grow to Rs 2,000 crore this year.