Business Practice –II Shahnaz Husain - A Successful Indian Woman Entrepreneur

I do not sell products. I sell an entire civilization in a jar."

- Shahnaz Husain
"She lives, sleeps, breathes her business. She is consumed with building a successful company which she has done."
- Janine Sharell, Correspondent, CNN
Introduction
She captured the markets around the world and now she wants to conquer space. In an innovative move,
Shahnaz Husain has started work on formulations that astronauts could carry with them in their extraterrestrial
sojourns to protect their skin from the ravages of space travel and slow down the ageing process. She has sent
National Aeronautics and Space Administration (NASA) free samples of her moisturizers, hoping that they will
be used on space expeditions. Shahnaz Husain is one of India's most successful women entrepreneurs. Her
company, Shahnaz Husain Herbals is one of the largest manufacturers of herbal products in the world. It
formulates and markets over 400 products for various beauty and health needs and has a strong presence across
the globe, from the USA to Asia.
In 2002, the Shahnaz Husain Group, based in New Delhi, was worth $100 million. It employed about
4200 people in 650 salons spread across 104 countries. The Group has seen a good growth rate in the 25 years
that it has been in business.The average growth rate in the initial years (late 1970s to the early 1980s) was 15-
20%. In the 1990s the average growth rate was 19.4%. A number of awards, both national and international
have been conferred on Shahnaz Husain.Some of them are "The Arch of Europe Gold Star for Quality", "One of
the Leading Women Entrepreneurs of the World", "The 2000 Millennium Medal of Honor", "Rajiv Gandhi
Sadbhavana Award", etc.
The Making of an Entrepreneur
Shahnaz Husain belongs to a royal Muslim family which migrated from Samarkhand to India and later held
high positions in the princely kingdoms of Bhopal and Hyderabad before India's independence. Shahnaz
received her schooling in an Irish convent and because of the influence of her father, Chief Justice N.U. Beg,
she developed a love for poetry and English Literature.She thus had the advantage of growing up in a traditional
family and receiving a modern education. She was married at the age of 15 and was a mother by the next year.
When her husband was posted in Teheran, Iran, she developed an interest in beauty treatments and decided to
study cosmetology. To support the expenses of the training financially, she wrote articles for the Iran Tribune
on various topics under different names.
In the course of her studies, she learnt of the harmful effects of chemicals on the human body.
Consequently, she turned her attention to Ayurveda, which she believed was the ideal alternative to chemical
cosmetics, which not only harmed the human system but also led to the deterioration of the environment in the
long run.After leaving Teheran, she trained extensively in cosmetic therapy for 10 years in some of the leading
institutes of London, Paris, New York and Copenhagen. On her return to India in 1977 she set up her own salon
at her house in Delhi with an initial investment of Rs 35000. In contrast to salons offering chemical treatments,
Shahnaz offered Ayurvedic products.Entrepreneurship-The Shahnaz Husain WayShahnaz Husain uses the
Ayurvedic method of treatment, which uses natural formulations to cure ailments. She is the pioneer and leader
of Ayurvedic beauty products in the world offering "Natural Care and Cure". The Shahnaz Husain Group offers
exclusive salon treatments geared to individual needs as well as a number of commercial formulations for the
treatment of specific problems like acne, pimples, pigmentation, dehydration, alopecia (hair loss), etc.
 According to the Group, ayurvedic products are well suited to human skin and hair as they are non-toxic
and have no harmful side effects. The human body adapts well to the natural treatments of Ayurveda while it
has an inbuilt resistance toward chemical treatments. This makes the system all the more effective.
The Group's sophisticated R&D units develop the products and put them through stringent quality
control tests. These products are environment friendly and no testing is done on animals. All the products
offered by the group are entirely natural and carry the guarantee of purity and safety. Shahnaz offers a wide
variety of over 400 products for all age groups and for a variety of problems She uses natural ingredients -
fruits, flowers, herbs, vegetables, honey, - as the base for most of her products. More complicated and exclusive
treatments using gold and pearls have also been developed. Shahnaz has recently launched the Oxygen Range
with an Oxygen cream, an Oxygen mask and facials using ingredients which breathe life into the skin and
revitalize it. The Shahnaz Husain Group has two R&D units and a herb and flower farm near Delhi. A degree of
quality control is exercised at every stage of the product development, right from the raw material stage to the
end product. Various methods of soil culture and cultivation are followed to improve the quality of the final
product. The extraction of essential oils and decoctions, infusions, powders and tinctures, is carried out using
the latest technology.
All the procedures are carried out in accordance with the Ayurvedic system. Shahnaz believes that high
quality is ensured only by the rigid exercise of control at every stage of production. In spite of the huge size of
her business and the wide variety of products she deals in, Shahnaz Husain has never advertised. She has relied
entirely on word-of-mouth publicity to make her products known to customers.
She believes that a satisfied customer is the best form of advertisement. Before Shahnaz Husain entered
the retail market, her clinics were the only outlets for her products. By the 1990s, the range and popularity of
Shahnaz products had increased so much that her products were carried by most of the big retail stores in India
and abroad.She has been able to achieve growth due to the quality of her products and the result-oriented
treatments she offers. She commented, "I have relied only on clientele feedback, based on clinical treatments
and this is what has made the ranges truly unique and result oriented." In 1977, when she returned to India, she
set up a parlor at her home in New Delhi. She had then put up a banner with her qualifications on it.
Within days she was booked for the next 6 months. She said, "I removed the banner and since then I
have never advertised. I have let my products speak for themselves." Shahnaz was disturbed by the fact that
India was not represented in any of the Global beauty forums of the world beauty congresses. Deciding to
change this situation, she represented the country for the first time in the CIDESCO1 beauty congress in the late
1970s."It was my aim to get India on the world beauty map as I felt terrible about the fact that India was never
represented at any world beauty congress," said Shahnaz. She was appointed President for the day's proceedings
at the congress and she used this opportunity to focus the world's attention on Ayurveda.
The Turning Point
The turning point in her business came when she represented India at the Festival of India in 1980. Her
team was given a counter in the perfumery section of Selfridges in London. She managed to sell her entire
consignment in 3 days and also broke the store's record for cosmetics sales for the year. As a result, she was
offered a permanent counter in Selfridges. Shahnaz was the first Asian whose goods were retailed by the
theGaleries Lafayette in Paris. Although it was not easy to enter the highly competitive western markets and
especially difficult to attract attention to the Indian system of Ayurveda, she was able to gain a firm foothold in
the markets. Shahnaz Husain products are sold at many prestigious stores around the world such as Harrods and
Selfridges in London, the Galeries Lafayette in Paris, Bloomingdales in New York, the Seibu chain in Japan and
Sultan Stores in the Middle East. Her products are also carried by other exclusive outlets in the Middle East,
Asia and Africa. Shahnaz Husain has used the franchising mode to expand her business in India and abroad.
She has a large network of over 600 franchises and associate clinics around the world. All the
franchisees are required to undergo training in specialized treatments at Shahnaz Husain's school of beauty
therapy. All franchisees obtain the right to use the Shahnaz Husain name and her specialized treatments and are
allowed a 30% profit margin on the sale of Shahnaz Husain products. In 2002, the Shahnaz Husain Group
obtained distributor rights for Australia, New Zealand and the Fiji Islands.
Distribution channels were first set up in the major cities of Australia, and later in New Zealand and Fiji.
This was followed by the setting up of herbal clinics, first in Sydney and later in other Australian cities, New
Zealand and Fiji by the first half of 2003.
The Shahnaz Husain Group has about 40 distributors and more than 600 sub distributors all over India.
The Group sells not only in the cities but also in the small towns. In addition, the Group owns about 20 clinics
and outlets in New Delhi. All other outlets are run on the franchise system. The Group does not make any
financial investment in its franchises, nor does it have any share in their profits.
Diversification
The Group has diversified into Ayurvedic centers for Panchkarma, Dhara and Kerala massage. It has
also set up two Shahnaz Husain Ayurvedic Health Resorts, one near Delhi and another in collaboration with the
Hyakumata group of Japan in the US island of Saipan. These resorts which can accommodate about 200 people
at a time, aim at providing urbanites treatments and programs designed to counteract the stress of modern life.
The Group has also been holding discussions with major five star hotels in New Delhi and New York to set up
health spas. Shahnaz Husain products normally cater to the premium end of the market and are rather
expensive. Shahnaz justifies the price citing quality, purity and high excise duties as the reasons. In 2002,
however, she developed a product for the mass market, a Fairness Dream Cream, priced at Rs 68 for 50gms.
This product will not only be advertised (unlike her other products), it will also be made widely
available through all sorts of retail shops and even at railway stations. She claims that she has always wanted to
create a product for the masses and the R&D deparment had been on the job since 1995 to create such a
product.The group has also launched a line of herbal drinks under the brand name Fitness Fiesta Shadrink.
These drinks are low calorie, cooling drinks to be consumed in the summer. The drinks are based on rose and
khus (poppy seeds) extracts and contain essential nutrients, vitamins and minerals which nourish the body and
help purify the blood. Shahnaz's love for animals prompted her to introduce a special range of ayurvedic
products for pets – Shapet.
This range includes hair care balms, anti-tick hair cleansers, talcum powder, anti-scabies skin oil,
antiseptic balm, and anti parasitic lotions Shahnaz believes that chemical products and pesticides destroy the
natural luster and health of the animal's coat. Natural products not only prevent this but also help soothe and
cure infections.
Training Future Entrepreneurs
Seeing the need for internationally recognized institutes that offered professional training in beauty,
Shahnaz Husain set up Woman's World International. This was started at a time when people who wanted to
train in beauty treatments and therapy could only get apprenticeship training. The institute which is affiliated to
ITEC, U.K3 offers training in cosmetic therapy and combines theoretical knowledge with practical training.
Students study physiology and the human anatomy to understand the scientific principles of beauty and become
familiar with the major systems of the human body. They are taught the practical skills of massage and make-up
under the expert guidance of a qualified therapist. They also learn the use of various skin and hair gadgets. In
addition, they study nutrition, weight control and exercise. Students are also given basic training on setting up
and running salons and maintaining hygiene.
In addition, they learn communication skills and general business management skills. The institute has
branches in New Delhi, Mumbai and Noida. Shahnaz later started the Men's World International because of the
demand for men trained in beauty treatments. These institutes offer Diploma Courses and Post Graduate
Courses in beauty and cosmetic therapy. They also offer refresher courses and courses on personal grooming.
The Shahnaz Husain Ayurvedic Centre for Panchkarma, Dhara and Kerala Massage also imparts training in
these traditional disciplines. Students are taught the Ayurvedic system of "Tridosha" for identifying ailments. A
qualified Ayurvedic doctor conducts these classes.
Shahnaz has also started 'Shamute', a free training school in cosmetic therapy for the speech and hearing
impaired. The training they receive in this school helps them lead a self reliant and purposeful life despite their
handicap. Even after they qualify as beauticians, they are offered guidance and advice throughout their career.
Lessons on Entrepreneurship
Shahnaz Husain has acquired worldwide recognition. Her dedication and relentless hard work have paid
off and she heads a Group which is the largest of its kind in the world."It is important to have a dream and to
believe in the magic of your dreams" says Shahnaz, who has been able to convert her own dream into a business
worth millions of dollars.
Shahnaz believes that a true entrepreneur is a person who has independence of spirit. "One should be
innovative, dynamic and willing to try every avenue towards success." She does not look on her work as a
career. It is more like an obsession and the sole purpose of her existence.
Shahnaz says that to succeed, one must never give up and never stop trying. "I always feel I have
another mountain to climb and another frontier to cross. I never rest on my laurels." She puts in 18 hours of
work and diverts all her energies into her company. Her business acumen and untiring efforts combined with
excellent products she creates have made the Shahnaz Husain Group the undisputed leader in the market for
Beauty Products and Natural Remedies.
Discussion
1. Explain the process of birth of an entrepreneurial idea and its development
2. Examine the qualities of Shahnaz Husain as an entrepreneur and their contribution to her success in
business
3. Discuss the reasons for the success of Shahnaz Husain products
4. Examine and analyse the mode of operation of the Shahnaz Husain Group;
5. Study the diversification and expansion strategies .
6. The case presentation will be on a successful entrepreneur of your choice