Dabur enters health & beauty retail
In offering products with value-added services, it is gunning for high returns per square foot of space, reports Saurabh Turakhia.business Updated: Dec 06, 2007 22:26 IST
After several big corporate houses such as Bharti, the Aditya Birla Group and others have announced their retail plunge, now Dabur has timed its retail entry, although through a chain of specialty stores focused on selling health and beauty products. <b1>
Though it has been announcing its retail plans for sometime, it is only now that it has shared a specific blueprint for its foray. These stores will be called ‘new-u’. H&B Stores Ltd, a wholly owned subsidiary of Dabur India Ltd, is pushing this venture with an initial investment of Rs 140 crore.
The initiative is quite similar to personal care stores run by global players Watsons and Boots. The company will open the first store in Delhi in January 2008 and by the end of 2007-08 financial year, it will have six ‘new-u’ stores in the Delhi-NCR region. The company will add another 50 stores over 2008-09, taking the ‘new-u’ stores number to 160 by 2009-10. The stores will have around 20,000 products (SKUs) in different categories, including colour cosmetics, fragrances, skin and personal care, baby & family care, fashion accessories, general merchandise, ayurvedic, herbal and pharmaceuticals.
The store sizes (carpet areas) will vary between 1,200 sqft and 6,000 sqft According to Anand Shah, retail and FMCG analyst at Angel Broking, Dabur may have a first mover advantage here.
He elaborates: “No retailer has tried such a concept in India. Dabur is expected to clock revenues of Rs 3,500 crore by 2009 and if this venture manages to garner Rs 400 crore revenue by 2009, it is easily a significant contribution of 10 to 15 per cent.” To create a distinct identity, the stores will also have beauty and health experts to assist consumers make informed decisions. “The beauty and health advisors would be one of the strong differentiating factors of ‘new-u’ stores. Our intention is to give consumers a wide choice of beauty, health and wellness products all under one roof, in a modern comfortable environment, with great value-for-money offers,” says Graeme Fraser, head - sourcing, buying & merchandising, H&B stores.
While a lot of players have opened up stores that offer beauty and health services in India—Marico with its Kaya services (Kaya also retails products now), Lakme with its salon chain—Dabur’s decision to retail health and beauty products is a unique move. Arvind Singhal, chairman of Technopak Consultants, approves of the move, saying: “The biggest advantage that Dabur has is that consumers’ awareness of health issues is rising. Moreover, they have a higher disposable income at hand, which frees some money that they can spend for preventive health rather than reacting to any illness.” He feels that Dabur, with its offerings like Chyawanprash and Real fruit juices is closely associated with the health and wellness platform and hence this is a logical extension.
Shah of Angel Broking says that the company expects revenues of Rs 20,000 per square foot per year, quite a high estimate compared to revenues of formats such as Big Bazaar and Vishal, which pale at Rs 7,000 per square foot per year. “More players will go this way in the future,” is his guess, considering the big potential this model of product-plus-retailing holds.