MELISSA CHEN, founder & executive director business development, Esthetics International Group Bhd

Type of business: Wellness and beauty

Year listed: 2004

Number of outlets: 54 in Malaysia, Hong Kong, Singapore and Thailand

Number of employees: 1,000

Revenue for FY2008: RM167.15 million (46% professional services, 54% distribution segment)

What made you decide to go into the beauty and wellness industry?
My foray into direct selling of cosmetic products made me realise that I found great delight and interest in helping people achieve healthy skin. Growing up in a small town, I used to see women neglecting their image and wellness. I felt a personal call to change that.

In 1984, I took the bold step of starting Head to Toe Beauty Centre. From there, it evolved into Leonard Drake Skin Care Health Spa [currently under Esthetics International, which groups both Leonard Drake and AsterSpring Origin of Beauty].

What were the challenges when you started Head to Toe?
My first salon occupied a mere 168 sq ft, which included the reception, sitting area and facial treatment room! There was not even piping for water supply. However, a creative solution was found and a tank installed to store water that was linked to a tap over the basin. For 1½ years, I had to personally carry water everyday from outside the salon to fill the tank inside.

I started the salon with a personal loan of RM20,000. If anything happened, I’d have nowhere to go, so I didn’t take a loan from the bank.

Back then, there was no Internet. It was hard to find reference books; not many writers write about beauty, it’s like their best kept secret. What I did was learn through experience and with the clients’ guidance. I talked to them and tailored the service to their needs. That’s how the business grew.  

You have two chains of wellness centres: Leonard Drake and Aster Spring. How has the global economic downturn affected them?
Last October or November, our clients felt that maybe they should wait and see. After December, they started coming back, buying and doing [the treatments] they were previously doing. The most important thing is for you to have products that can meet the needs of people.

Products and services — these are the things we offer. We have salon and professional skincare, which is the core of our business. And we have branched out into fast-moving consumer goods in Clinelle, which is very reasonable in term of pricing.

How do you come up with your skincare products?
We outsource. We collaborate with strategic partners from overseas. We have an R&D department here, but we don’t do [clinical] research. Our research is on the trends, the market and the treatments.
But we collaborate with strategic partners from Germany, Switzerland, Australia, different parts of the US and Japan. Our products are developed overseas but conceptualised here because we understand the needs of the people here.

You are the founder of EIG, so why aren’t you the CEO like others who have founded their own business?
A founder is someone who started the business. For a while, my husband and I took turns managing the business. So I was managing on the professional services side and he was managing on the distribution side. A time came when he managed the whole thing and I took a step back and developed the business. It was like passing the baton. Since the company’s listing, he has taken on the [CEO] role while I do what I’m best at, which is innovation and business development. This way, I get a better insight into what comes in.

What is your plan for EIG, looking forward?
I foresee the wellness and beauty industry will continue to enjoy growth, given that more companies are entering the market and introducing more products and services even in this time of economic downturn. The bigger and reputed players with winning business models and extensive ownership of brands will continue to be successful. At EIG, we are already riding on this, and will sustain our position as a regional player by harnessing the best resources and new technologies available within our reach.

We plan to expand our product distribution to Taiwan and China from September. We are getting such huge orders for Clinelle from Hong Kong that we don’t have enough supply. In terms of marketing and branding, we spend 5% to 7% of our revenue. We cannot spend more than what we earn.

This article appeared in the Manager@work, the monthly management pullout of The Edge Malaysia, Issue 760, June 22-28, 2009