Dubai: By pitching a business model that appeals to the very core of any human being, the Indian wellness company VLCC has a lot going for it without breaking much of a sweat.
The pitch promises clients nothing less than a complete "look good, feel good" experience.
VLCC has the numbers to indicate it's on to a good thing. In its home market, the company's retail network has swelled to around 200-odd centres in 70-odd cities since it started in the one city in 1989. The transition has catapulted the company into Asia's largest wellness care provider.
By 2014, the network will have grown to 555 centres in 403 cities, going by VLCC's current projections. In the Gulf markets too, which VLCC entered in late 2005, there is expected to be no slowing down on the network rollout programme.
Welcome response
VLCC said in coming weeks it will open two centres in Qatar, one in Bahrain and another in Dubai. More are on the way.
"We have already done some homework for Saudi Arabia, which has the same health problems as elsewhere in the region," said managing director Mukesh Luthra. "The authorities there have been welcoming, and we could decide soon.
"The goal is to be 65-centre strong in the MENA territory by 2014, and reflects the compounded annual growth rates of 40 per cent VLCC has been attaining not only in India but our international business as well," said Luthra.
"It's simple enough - every human being is aspirational and the VLCC brand is in perfect sync with this sentiment."
"We provide wellness through an absolutely 360-degree approach. People realise today's lifestyle requires a need to go to wellness centres at some point to de-stress, at other points to get themselves healthy and avoid chronic diseases."
Another revenue generator for VLCC has been its line of personal care products, sold through its own centres as well as third-party outlets. With the new centres opening, VLCC - which recorded revenues of just under $500 million for its financial year ended March 31, 2010 - looks to leverage the personal care line to the hilt.
VLCC's build-up of a retail presence in these markets coincides neatly with a discernible trend in the wider marketplace.
Swanky fitness centres are mushrooming and no longer the exclusive preserve of hotels. Moreover, today's health clubs are quite removed from the sweaty and decrepit gyms of the past which had nothing more to them than a few weights and a couple of dilapidated treadmills.
Full ownership
Interestingly enough, VLCC owns all of its centres in the Gulf whereas conventional wisdom would have suggested they tap the franchise route. Luthra said he had his reasons.
"We were confident of the business model, the return on investment has been good, and the technology we already had," Luthra said. "This gave the management the bandwidth to put up centres all over India and the Middle East.
"If we were in the luxury business or only in the look-good business, we would have had problems as people would have postponed their decisions to a later date," he said.
Preventative care
"But we were never just into beauty. Our wellness offering is centred as much on preventive health care. That's why the recession made only a little dent to our business last year."
But down the line, Luthra said he intends to adopt a franchise model as well to, as he said, get into cities too small to warrant a direct VLCC investment.
"We believe there's opportunity to have 700 franchises worldwide by 2014," Luthra said.
By the sounds of its success, VLCC will not be stopping its expansion run any time soon.
VLCC did encounter a few niggles when it came to getting the licensing clearance from the authorities. But Mukesh Luthra, the managing director, said he believed these were now in the past.
"There was no precedence locally and regionally in the kind of 360-approach we had for our wellness services," said Luthra. "That's why there were some regulatory issues initially, and which have long since been resolved.
"They (the authorities) have come to understand what we have to offer. And it does not mean we require multiple licences - what was done was a place was specifically created for us."
Going forward, Luthra indicated VLCC would be revisiting its plans for a public share offering some time in the next 15 to 18 months. It had postponed such a move in 2009 in reaction to the state of the market at the time.
"Since the economic environment had made everyone very cautious, we decided to respect the sentiments and postpone the plan," said Luthra. "We are now gearing up."
He said the company expected to touch revenues of Dh833 million in the 2011-12 financial year compared with last year's Dh500 million.
