Helijia- The World’s Largest Roving Nail Salon
Helijia, a mobile app that provides on-demand manicure services in China, leverages its business and operating models to expand into the largest platform for on-demand services across industries.
Helijia is a mobile app that provides on-demand manicure services in China. It is one of the rising startups in China and recently received $50M Series C funding in February 2015. A customer specifies a time, and the app brings the service to the customer’s home, which is pre-registered into the system. Users can also choose to work with a specific manicurist through the app. There is a user-generated rating system, which benefits both the users and high quality service providers.
Business Model
Helijia was the first significant player in this space in China. Its business model was one-of-a-kind when it first started. As the Uber of the manicure industry, Helijia creates value by scheduling on-demand services. On the demand side, it charges a lower price for manicures by removing the fixed cost of running physical stores.On the supply side, it gives back 100% proceeds back to the manicurists, attracting a large number of manicurists flocking toward the app.
Since it is a startup company, it focuses on the number of manicurists, customers and transactions. Once they hit critical mass, I suspect that Helijia will switch to a profit sharing model with its manicurists, or even charging a booking fee from customers (like AirBnB)..
Operating Model
Large Offline Team. Helijia has a relatively large offline operations team. The main components include User Operations, Service Operations and General Management. User Operations focus on demand. They work on marketing strategy, user acquisition and promotions to make sure more and more people download and use Helijia. Service Operations focus on supply. The manicurists are mostly freelancers and this space is highly fragmented. This team works on reaching out to individual manicurists, convincing them to join, and retaining them. General Management focuses on general operations tasks that brings demand and supply together.
Standardized Procedures. Getting a manicure is rarely a consistent experience. To operate at a large scale, Helijia has to standardize the procedures as much as possible. Helijia Manicurists always show up with a gigantic black toolbox, which the company provides for free to each manicurist. The cost of each toolbox is RMB 10,000 (USD 1557). This means that all Helijia manicurists use the same tools and nail polish, providing consistency in the experience. The company sets up basic operation standards from transit to the application of nail polish, and uses GPS to track the location of manicurists.
Technology. Helijia has an internal engineering team that develops the app. Since revenue is booked through a mobile experience, the app needs to be at least functional and easy to use. According to the historic data on Apple App Store, Helijia’s iOS app has been updating twice every month – in line with the speed Facebook and AirBnB update their apps.
Rating System. Helijia has a user-generated rating system that encourages repeat purchases and retains existing customers. Rating manicurists on the app generates a discount coupon for the next purchase for the customer. This gives high-performing manicurists exposure to more business opportunities. It also retains customer activity, contributing to a large database of services provided on the app. Manicurists remind their customers at the end of each service to “put in a good word” for them in the rating system.
Alignment
Helijia has an ambitious goal of being the largest platform for on-demand services across industries. They have since added pedicure, hair and makeup and body training services to their platform, while charging zero commissions to their service providers (manicurists, pedicurists, etc). This might seem like a misalignment at first. However, many startups focus on hitting the critical mass and taking market share before turning a profit. Their current business model is crucial in acquiring new services providers to join their platform.
Ever since Helijia’s success, a couple of local competitors emerged with the same business model. To differentiate themselves, Helijia focused on improving its operation models to make sure their execution is better than their competition. The competitive advantage shifted from business model to operating model once competition emerged – this is a common character of the Chinese startup scene. Customers will flock where supply is abundant and cheap. This is why maintaining an army of service providers is key to Helijia’s success at this point. Hence the operating model supports the business model, which serves its long term strategy.
Sources
https://www.crunchbase.com/organization/helijia#/entity
http://www.helijia.com/index.html
Super interesting business model and very insightful post. It seems that Helijia is doing anything in its power to remove friction for growth, while maintaining a standard base of quality. Two questions come to mind. How does Helijia ensure safety to its customers? I ask this because I would be a little hesitant of letting a complete stranger inside my house. Also, how does Helijia ensure quality on the other services it provides? I know they use the black box for manicures (and probably pedicures as well), yet I would assume that hair drying, for example, is more dependent on the stylists’ talent than on anything else.
Have you used this service? If so, I would love to hear about your experience using the app.
-Bernardo
Thanks for the questions, Bernardo!
Safety is a valid concern and also the biggest barrier for new customer acquisition. They tackle it in two ways. (1) Helijia allows customers to set the location to anywhere: parks, office buildings, restaurants, as long as it is appropriate and legal. So many working professionally actually invite the manicurist to come to their office lounges and work there. (2) They use GPS location to track all of their manicurists.
In terms of other products, I have not personally used them but I would assume that they give out a standardized kit for each service. They have higher-than-average standards in terms of disposable supplies they use. So my guess is that they have a standardized kit and might allow stylists to add on their own gadgets.
Yes, I have booked manicure and pedicure multiple times with them while living in China. Would love to chat in person.