What Is VLCC And Their Business Model?
Founded in 1989 and headquartered in Gurgaon, VLCC Health Care Ltd is the prodigy of Vandana Luthra that on the whole, specializes in scientific weight management solutions, skin and hair-care treatment, beauty services and personal care.
Basically, VLCC that is short for – ‘Vandana Luthra Curls and Curves’ is beauty and wellness multinational corporation that is widely recognized on a global scale, for its
scientific and natural weight-management practices by using a unique DNA based weight management system to customize weight loss program weight loss solutions and therapeutic (meaning: healing) approach to beauty treatments.
The VLCC Group serves as an umbrella for many brands like – VLCC Slimming, Beauty and Fitness, VLCC Personal Care, VLCC Natural Sciences, VLCC Institute of Beauty and Nutrition, VLCC Day Spa and VLCC Beauty Zone, and many more… but all these can be summed up into the following three:
- VLCC Wellness & Day Spa
- VLCC Personal Care
- VLCC Institute of Beauty and Nutrition
VLCC Wellness is among the largest chains of Slimming, Beauty & Fitness Centres across Asia. They hold a strong presence both in India and overseas, and are widely known for their services like – Weight management, Beauty management, Dermatology, Day Spa, therapeutic beauty, cosmetology solutions, etc., in addition to that, they customize weight loss program by using a unique DNA based weight management system to perform scientific and natural practices for weight management.
As of date, VLCC is known to have the largest network within the beauty and wellness services industry in India and currently operates across 301 locations in 134 cities and more than 11 countries in South Asia, South East Asia, the GCC Region and East Africa.
Talking about their Day Spa – it is a place which acts as an escape joint to unwind from the chaos, pressures and stress of daily life. It is designed in such a way that its wellness quotient and their supreme quality treatments can be custom made to cater to your requirements.
And their qualified therapists are also trained in such a way that they instantly understand and indentify your unique requirements to suggest the best-suited therapies accordingly. They use rhythmic strokes in different ways and to different parts of the body that encourages the wellbeing of your body and mind.
VLCC Personal Care is the wing under which VLCC Group manufactures over 169 skin care, hair care, body care, functional foods and fortified food products. These are manufactured under the brands VLCC ‘Natural Sciences’, ‘SkinMTX’, ‘BelleWave’ and ‘Enavose’ in India and Singapore.
Some of their product categories includes – Facial Kits, Bleach, Skin Care, Fairness Creams, Moisturizers, Massage Oils, Hair Care, Shampoos, Conditioners, Sun Care, Eye Care, Lip Care, Shape Up, Wellness Range, and many more…
Apart from being retailed separately in 72,000 stores in India and many more across South Asia, the Gulf countries, South-East Asia, and Africa; these products are widely used in therapies at all VLCC Wellness Centers globally.
VLCC had ventured into the products business to capitalize on the strong research capability to manufacture the group held.
VLCC Institute of Beauty & Nutrition offers specialized professional courses in beauty, hair, cosmetology, make-up, spa therapies, and nutrition. The biggest bottleneck of the wellness and beauty sector was that it lacked well-trained manpower; hence, to address this issue, VLCC Academy of Training was opened.
It was established in 2001 with an aim to promote the sector more, and to provide the correct path to the ones who desired to get into the field. And today, they operate Asia’s largest network of vocational education academies in Beauty & Nutrition across India and Nepal.
Every year, the institute trains around 8,000 professionals in 65 VLCC Institutes, and overall they have trained far more than 40,000 students in subjects like – Cosmetology, Hair, Makeup, Nutrition, etc… This training business contributes roughly 10% to the group’s total turnover.
Other than that, VLCC is also working with the Ministry of Labour & Employment, Directorate General of Employment & Training (DGET), and GOI, to raise the bar of
vocational training in the beauty and nutrition sector in India.
What Market Segment Are They Targeting?
The vision of Vandana behind starting VLCC was to make health and beauty easily accessible to the masses.
But during the time when he opened her first Transformation Centre in 1989, the health and beauty market was very nascent, and putting together fitness along with beauty was an idea that was completely unfamiliar. Back then – it was either the mom-and-pop neighbourhoods parlours where you could find the basic usual services, or you had to be rich enough to visit the five star saloons.
Hence, Vandana wanted to target the middle class, who wanted to look and feel good, but within their budget. Additionally, she also targeted the Lunch Segment, by supplying ‘nutritious and healthy’ food. More closely, she wanted to target the middle-class women of India and the developing nations, to provide them with beauty services along with personal care products.
She successfully picked the unorganized slimming and beauty industry, and transformed it largely, into an organized one.
What Kind Of Business & Marketing Strategies, And Partnerships, Has The Vlcc Adopted?
Today, the VLCC Group holds many brands such as – VLCC Slimming, Beauty and Fitness, VLCC Personal Care, VLCC Natural Sciences, VLCC Institute of Beauty and Nutrition, VLCC Day Spa and VLCC Beauty Zone, and it goes without saying that it also needs professionals as franchise partners to manage the show.
Since, VLCC was started with a vision to make health and beauty accessible to everyone, in an attempt to reach out to a mass audience, they had adopted for a Franchise model in 2007.
So for them, it was of utmost importance that their Brand was being handled by the right kind of people, by people who understood what all was, is and should be involved in a franchisor – franchisee relationship, and most importantly forming the right expectations on part of both parties.
Hence, to channelize well across the country, they joined hands with ‘Franchise Mart’.
Other than that, they also partnered with the US-based ‘Pritikin’, who are leaders in the medi-spa domain.
For them, their franchisee centers are their business partners, who are the front faces of the VLCC, therefore, they have maintained standard parameters of service delivery at all outlets, be it company operated or otherwise. In other words, their franchise model is based on the hub and spoke concept. This helps them to control and standardize service delivery.
They have very strategically made sure to well-define their franchise models while keeping it extremely flexible. They have included different investment options, business format options, etc., which vary from investor, businessman, their potential, to the city or town they would be operating in.
They also help their business partners with literally everything to set up the business, be it buying equipment, or hiring of professionals to training, and even close monitoring to ensure efficient delivery of services, they stand by their partners.
But at the same time, their quality benchmarks at both ends are very strict and must be adhered to as well, and to ensure that, they also conduct regular audits and trainings as well.
Other than that, VLCC has also partnered with a BPO company called ‘Aegis Communication’ (an Essar group Subsidiary) to manage their domestic call centre
operations as well.
Talking about their Marketing Strategies – the company has been using every medium available, but with a touch of uniqueness, to present themselves well in the market.
To achieve that, they have partnered with ‘JWT’ and ‘Equus’, to provide them with strategic consultancies for their promotions, and to deliver strategic and actionable marketing insights across digital media they have got on board ‘Media Contacts’, which is a global interactive media network of Havas Digital.
They have also appointed ‘OGILVY & MATHER’, the leading creative agency for all their business verticals in India, while the GCC nations are handled by Dubai-based ‘Bates Pan Gulf’.
Lastly, ‘141 Sercon’ and ‘Thomson Connect’, helps them to manage its CRM initiatives and customer relationship management, respectively.
VLCC uses TV channels to give programs on knowledge about products from experts along with special offers. Additionally, their television advertisements have celebrities who endorse their products, with a central theme of these ads being ‘Shaping your confidence’.
Incidentally, this is also the ‘baseline’ for the VLCC group.
Other than that, the company also uses a range of other promotional activities and marketing mediums such as Direct Marketing through mailers, Providing coupons and discounts for large packages, and many more like these…
These models, strategic partnerships and all the surrounding business and marketing strategies have greatly helped them in getting far ahead from competitors, and in reaching out to the untapped tier 2 and tier 3 markets, in a relatively shorter period of time.
Who Would Be Leading The Brand?
Born in 1959, Vandana Luthra is the founder of VLCC Health Care Ltd.
Vandana was born in Kolkata, West Bengal and studied a professional course from the Polytechnic for Women in New Delhi, post which, she went on to pursue domain-specific knowledge in beauty care, fitness, food & nutrition and skin care from Germany, UK and France. She is married to Mukesh Luthra.
Over the period of time, she has also authored two books – ‘Complete Fitness Programme’ (2011) and ‘A Good Life’, on wellness and fitness (2013).
Vandana has also been awarded with the ‘Padma Shri’ – the fourth highest civilian award, by the Government of India in 2013 for her contribution to the fields of trade and industry. Presently, she is also the 30th most powerful woman in business by Fortune India.
Vandana leads Sandeep Ahuja (MD – VLCC Health Care ltd, and CEO – VLCC International) who is the head of a large workforce that compromises of over 4,000
How Has Their Growth Been So Far?
VLCC started with a single Transformation Centre in Safdarjung Development Area, New Delhi, in 1989.
In the next 12 years, the outlet had developed into a relatively small brand which held some 35 centers nationally. And after the name was successfully built, thereafter it started scaling up aggressively and soon received funds from global investors as well. Their investors included CLSA (Credit Lyonnais Securities Asia) and Everstone.
They opened their first store outside India in Dubai in 2005, which was gradually followed by an aggressive expansion in other developing markets like GCC countries, Africa, Sri Lanka, Bangladesh, Nepal and Malaysia, etc. By now they had evolved as a reference point for all those who wished to enter the industry. Their revenues had also drastically taken a jump from Rs. 84 crores in 2003-04 to Rs.130 crores in 2005.
Over the period of time and due to their smart Partnerships and Business & Marketing Strategies, VLCC had set itself on a high rate of growth.
In 2013, VLCC acquired ‘Wyann International’ in Malaysia to strategically enter a foreign market through a company who held a strong base.
In the same year, they also acquired a majority controlling stake in Singapore-based ‘Global Vantage Innovative Group’ (GVig). GVig owned three companies that manufactured and retailed a range of reputed beauty and wellness products and solutions worldwide.
And by the end of FY13, VLCC reported revenues worth ₹700 crores and an operating profit of ₹100 crores!
And when we look at them today, the company has come a long way to become a global wellness brand. It has expanded its reach to 300 salons across 121 cities and 16 countries, which include India, Sri Lanka, Bangladesh, Nepal, Malaysia, Singapore, GCC countries, Africa, etc.
The company has been growing at more than 30% annually since the past few years, and is also aiming to increase their turnover by five-folds to ₹5,000 crores in the next few years as well.
More recently and lastly, they have also filed their draft papers with markets regulator SEBI to launch their IPO and enter the stock market. They intend to raise at least ₹400 crores through this IPO.