By Dibeyendu Ganguly
Waiting at the reception of L’Oreal India’s corporate headquarters in a new high-rise in Parel, we watch a steady stream of cool people with funky hairstyles breeze in and out the door.
Could they be employees living their product, we wonder? Or business associates maybe? The mystery’s solved when we go in to meet managing director Jean-Christophe Letellier. “They’re hairdressers,” he says. “Our hairdressing academy is integrated into our office space. It keeps us in contact with our customers. We don’t want a closed office that is shut out from the real world.”
L’Oreal has 50 academies across the country where it trains 1.5 lakh hairdressers annually in the art of colouring, styling, perming, straightening – all using its own products.
In an unorganised market, the company has helped upgrade salons and even turned a few of them into chains. This high level of engagement with small salon owners and individual hairdressers has propelled it to the leadership spot in a market where other global brands (Schwarzkopf of Germany, for example) have faltered. Today, it’s normal to find even the most ordinary salons offering L’Oreal as the brand of choice for hair colour.
“It has taken a huge effort at ground level,” says Dinesh Dayal, L’Oreal’s chief operating officer, who has been with the company for 20 years. “Education is at the heart of our operation. You need a lot of patience, resilience and staying power to succeed.” The salon segment is important, but it is still only 20% of L’Oreal India’s Rs 1,800 crore annual turnover (2013).
The big chunk of the market is FMCG, where L’Oreal competes with the likes of Unilever, P&G and Lakme in hair care, skin care and cosmetics. One of L’Oreal’s most successful FMCG products has been Garnier Colour Naturals, a crème hair dye launched in 2002 and priced at a fraction of the global brand, L’Oreal Paris Excellence.
Developed in L’Oreal’s Research Centre in Paris for the Indian market, the product added a new benefit that it could be stored after opening and did not have to be used in one go. It was a hit and is now the market leader in hair colours by far.
Mr Letellier, who was earlier based in Singapore, heading L’Oreal’s FMCG business for Asia, plans to launch more products developed specifically for the Indian market. He’s spending the largest chunk of his Rs 1,000 crore investment budget for 2011-16 on research & innovation (R&I).
L’Oreal has always had a small R&I centre at its manufacturing facility in Pune. Last year, it commissioned a larger R&I centre in Mumbai and this year it launched a phytochemistry laboratory for basic research in Bangalore. “Our only chance to be big in India is to invent new products, new categories.
R&I is at the heart of our strategy here,” says Mr Letellier. A visit to the L’Oreal R&I Centre, spread over two floors in a high-rise in the suburb of Chembur, is revealing. One section has a number of bathrooms where people bathe using L’Oreal products.
In another section, a group of women are being quizzed by a young lady on their experience with a new face mask while the scientists who are formulating the product monitor the interview behind a one-way mirror, much like in police interrogation rooms. Upstairs, in the laboratory, a chemist is trying out the effects of different dye formulations on strands of Indian hair.
Another chemist is creating an array of colour options for a hair conditioner, which will later be tested on consumers downstairs. Overseeing all this is Francois Pradier, who arrived in Mumbai from Paris six months ago to take charge as director (R&I) L’Oreal India.
“We want to attack the market with brand new technologies and products in all categories. We are not interested in making small improvements to existing products,” he says.
L’Oreal India has just launched a new range of shampoos and conditioners for the scalp under its L’Oreal Paris brand name. Next in line is a hair oil and fairness cream with a talc-like texture, especially formulated for hot and humid conditions, which will be marketed under the Garnier name.
Meanwhile, the new phytochemistry laboratory in Bangalore has the job of analysing the efficacy of a number of ayurvedic ingredients. Mr Pradier is especially interested in working with traditional products like henna to create ‘bridge products’ that deliver better results while using these familiar ingredients.
“Expect to hear some breakthough announcements from me in two years,” he says. “We will use all the knowledge of L’Oreal world-wide research to develop something for the Indian consumer. We will also create totally new formulations in our laboratories in India from scratch.”
Model Citizen
Beauty, they say, is only skin deep. Who would know that letter than a skin care specialist like L’Oreal? Which is why managing director Jean-Christophe Letellier is seeing to it that the organisation gains inner radiance to go with its good looks.
“India is part of our universalisation strategy. We want to leave a footprint here as a socially responsible company,” he says. A visible symbol of L’Oreal commitment to being a model corporate citizen is Emmanuel Lulin.
A Masters in law from the University of Chicago, Mr Lulin has been with L’Oreal for 14 years, seven of which have been as global chief ethics officer. When we meet him, he’s preparing a talk he’s going to give the 300 employees at the company’s Mumbai headquarters.
“My message is going to be: speak up. We are a very transparent organisation where nobody needs to hold back on anything. We have many new hires and they need to know about the L’Oreal culture,” he says. Mr Lulin defines ethics very broadly as practising correct behaviour, as individuals and as an organisation. “Ethics starts where legal compliance stops,” he says.
“Ethics is about discretionary decisions and it touches every activity in the organisation.” As global corporates expand into emerging markets that sometimes have a poor record in human rights and corruption, the issue of ethics has gained importance – hence Mr Lulin.
“We have to be extremely attentive to the local environment, whether it is Brazil, Argentina, Russia or India. Business practises may be different here, but we have to send a message that L’Oreal has zero tolerance for any kind of unethical behaviour,” he says.
Bribery, discrimination, inadequate safety, conflict of interest, sexual harassment – these have always been problematic issues. The difference now is that information travels much faster nothing stays hidden for long. “If society believes an organisation is unethical, it will sooner or later lose its licence to operate. In today’s world, it will happen much sooner,” says Mr Lulin.
It has taken a huge effort at ground level. Education is at the heart of our operation. You need a lot of patience, resilience and staying power to succeed.
Source:The Economic Times
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