How Equity Bank CEO James Mwangi inspired this nail-care business
In 2013 Nduta Kinuthia began working at Kenya’s Equity Bank. The group CEO, James Mwangi, a business leader admired by many, gave Kinuthia and other new staff a pep talk, motivating them to work hard. But listening to Mwangi, and interacting with him over the next year, inspired her to take a whole new path, away from the bank.
“He opened up my mind. He told us of how he put his money in Equity Bank while it was a struggling building society, and how people thought of him as a fool for doing that. And today he is a billionaire and respected business leader. His story shook me – that is the kind of level [of business] I would like to do,” says Kinuthia.
“A year later I started feeling discontent on the job so I decided to quit.”
Kinuthia’s parents were not amused by her decision to end a career of nearly 10 years in sales, brand and product management. To make matters worse, she got married, and starting a family was on the cards.
“I got a lot of fire from my parents. They couldn’t understand why I was leaving a good job. They have also been in business for years, so I guess they knew the ups and downs.”
In August 2014, Kinuthia founded nail-care products company EL. The company has a portfolio of six different nail polish products trading under the brand name elsaKim. The products are manufactured in Poland.
“I know nail polish has been around for decades, but I thought there was some room for innovation. For instance, I had never seen polka-dot polish. There are people who are willing to try fun colours, and fun combinations – so I wanted to develop unique products aspirational consumers would want to buy.”
Changing sales strategy
Initially, Kinuthia targeted individual buyers but quickly learnt that customers who applied their polish from home would complain the polish chips after a few days. But those who had their polish applied at salons would have long-lasting results. This was because many people at home do not follow the procedure of using a base coat first and a top coat afterwards, steps which professionals at salons always follow. Currently 70% of elsaKim buyers are corporate salons.
“I want to position elsaKim as a luxury brand. I realised if I sold to individuals for Ksh.850 (about $8.50) a bottle and the polish chips off after a few days – that would ruin my brand. So I tweaked the strategy to instead focus on selling to salons.
“We tried products with 400 salons across Kenya and we have received positive feedback from the beauticians,” explains Kinuthia.
“We have been changing strategy along the way. The initial price was Ksh.850 per bottle, but now because salons are buying many bottles at a time, and doing repeat orders, we have had to change the prices as well.
“The salons are also urging us to produce plain colours. It’s been a learning curve, but the feedback has been positive.”
This year Kinuthia’s target is to make Ksh.300m in sales (about $3m).
“The beauty with polish is that salons don’t wait for products to end before they restock. And they will always buy new colours and new products.”
Although some elsaKim products are sold on e-commerce sites targeted at individual shoppers, Kinuthia is not set on building a wide retail reach.
“We don’t want the brand to be everywhere. If you go to a corporate spa you don’t want them to use a brand you can easily afford and access because you are probably paying Ksh.1,500 (about $15) for a manicure. So we are careful in our distribution. We will be selective in the kind of stores we stock. We want people to brag about using elsaKim products – it should be luxurious and aspirational.”
Expanding the range
The design and initial manufacturing was a tedious and time-consuming process. Kinuthia needed to get approval from local authorities, confirm the Poland-based manufacturer was legitimate before making payments, and ensure the chemical composition of the nail polish is allowed by Kenyan authorities.
She plans to introduce other products such as nail treatments, conditioners, cuticle oil, and therapeutic items for fingers and toes.
“When you think about your nails, fingers or toes, we want elsaKim to be the first brand that comes to mind,” says Kinuthia. “I am not positioning myself just for the Kenyan market. We have sold to some clients to test the products in Switzerland. So we will take the brand wherever there is demand.”
Financing and distribution are some of the challenges she has faced. On management, she draws on lessons acquired while working with and observing her former boss.
“When I look at James Mwangi, I am motivated by his rise. I have removed any form of limitation on my mind.
“I know my vision is huge – and sometimes it scares me. But I don’t waver, I break down the vision so it doesn’t overwhelm me. Taking stock of my accomplishments also helps shield my mind from negative thoughts.”