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.
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)..
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.
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.