By Tamara Pupic
For Aly Rahimtoola, founder and managing director of Harmony Cosmetics, that moment when opportunity meets inspiration came a little later in life, but it did not go unnoticed
“This is a surprise,” whispers Aly Rahimtoola, founder and managing director of Harmony Cosmetics, a Dubai-born company behind the popular Herbal Essentials range of natural beauty products.
It was mid November, and the astonished entrepreneur was on stage to receive the SME Leader of the Year Award by Arabian Business StartUp, top prize of the evening.
“I think I’m on the right track,” is how he describes his award-winning business two days after our first encounter.
Arriving ahead of time to talk about the homegrown consumer beauty brand, his approach to business explains the complete lack of self-importance many would have expressed, on stage at least.
“With consumer beauty, you only have one shot at it,” he says at one point.
Rahimtoola prefers taking the slow and steady route to business success. He is part of a cohort of people who, with continuing energy and years of experience behind them, decided to embark on a second career.
The British and US educated Pakistani started his career in the family shipping and commodities business. Towards the end of the industry’s golden era, which he says lasted from 2003 to 2008, Rahimtoola foresaw a slump in global shipping markets and opted to diversify into a more stable industry.
“Shipping had a very good run in terms of the market,” he says. “But I’ve learnt in life that any market that has an extended bull run is probably going to be poised for a correction, where there’ll be an equal and opposite negative run.
“In 2006 and 2007, I started thinking to myself that shipping might be very difficult for the next few years, and that I wouldn’t mind doing a start-up in something that had a little bit more stability in terms of cash flow, that was a bit more defensive.
“To me, consumer beauty is an industry that is inherently defensive because there is always a demand for it. In their daily routine, consumers are always going to be involved in skincare. So, I had this idea that I wanted to create a brand.”
Although a newcomer to the industry, he recognised that modern consumers had become more discriminating in their purchase of cosmetic products, desiring an all-natural approach to their well-being and beauty. Locally, this insight coincided with the growth of holistic yoga and meditation centres across the city due to its residents looking for more ways to balance their increasingly fast-paced lifestyles.
Herbal Essentials offers its customers affordable, paraben, carcinogen, and cruelty-free personal care products created in a process which he describes as “reinventing ancient beauty wisdom from around the world for the modern consumer.” Their first range, known as The Himalayan range, applies the principles of Ayurveda. The Mediterranean range, which will be launched next year, is made with natural ingredients sourced from that region.
Looking at the numbers, there is little doubt why the seasoned entrepreneur chose to break into the skin care market. Globally, it is forecasted to grow to $154 billion by 2021, while in the MENA region the skin care market is estimated to be worth $3.7 billion, representing about two percent of the global market. Its organic personal care segment, which is the market niche Rahimtoola focuses on, is forecasted to reach $13.2 billion by 2021.
However, due to rising image-consciousness amongst consumers the landscape was saturated, with the category full of brands in both the luxury and mass segments. In between these two extremes was a market opportunity Rahimtoola seized.
“As an entrepreneur with just an idea how do you break into a difficult, globally competitive sector which is saturated with wonderful brands?” he explains. “You look at where is fragmentation. To me, the pharmacy sector in the UAE is fragmented because if you walk into a pharmacy now, you will typically see anywhere between probably 40 to 60 different skincare brands. And yes, while some of them are owned by big conglomerates, that was nevertheless an opportunity.”
Today, Herbal Essentials has grown into one of the main derma brands retailed through the pharmacy channel in the UAE, ranking consistently in the top 10 in chains such as Boots and BinSina. However, despite already proven business acumen, shifting gears required Rahimtoola to go through a steep learning curve.
“We made plenty of mistakes related to packaging, pricing, positioning, and similar because I wasn’t coming from a consumer background,” he says. “I used to go to meetings with advertising people who were using terminology that, to be honest, I was too embarrassed to ask what it meant. After the meeting, I had to take my smartphone out to Google what that meant.”
Harmony Cosmetics is the first company in the MENA region to join PETA’s Beauty Without Bunnies programme, a scheme that certifies companies that do not test on animals, and is part of the One Percent for the Planet programme, a global movement of companies donating at least one percent of their annual net revenues to environmental organisations worldwide.
Fast forward a decade, his commitment to learning and being unapologetic to what the brand should stand for has paid off. “What you ultimately have to do is to earn the trust of the consumer,” he says. “The consumer is the only powerful one in this consumer game. They are the ones who have the spend in their wallet and they can buy anything they want.
“So really you have to educate the consumer on what the brand is about, and our brand is about its ancient beauty wisdom. All of this is done not as a marketing story that sounds nice, but with the consumer in mind.
“I recognised early on that if I tried to build this brand in a way that all these other huge conglomerates followed, I would never win. How does a small brand from Dubai with just an idea and a vision become a top shelf product in Boots, which is where we are now, when all other brands are owned by global conglomerates? The only way is by earning the trust of the consumer.”
Outsourcing the most capital intensive parts of the business - manufacturing and distribution - allowed him to focus on building the brand and conveying its message to the right audience. This decision, he explains, stems from his maturity in business. “If you’d asked the 25-year-old Ali, he would have said: ‘I can do everything on my own and I don’t need anyone,”” he says. “The 45-year-old Ali understands that the enormity of the task is huge, but the reward is equally huge, so let’s divide up the responsibilities, let’s find the right partners, and let’s work with them.
“I learnt early on that one person or team cannot do everything. The consumer beauty pie is so big, and as long as you have partners involved in the whole process who share your vision, who can add value, there’s no harm in forging alliances with people.”
In 2016, Herbal Essentials signed a distribution agreement with the Chalhoub Group. His other professional highlights, he explains, are adding Nicky Kinnaird, founder of Space NK, one of the UK’s largest beauty prestige retailers, to his board, and becoming a member of highly-selective Endeavour UAE.
“I think my greatest strength as a business person is my ability to empathise,” he says. ”I try to look at it from the other person’s point of view. I have to look at it from your point of view and it has to make sense for you because it has to be a win-win situation.
“The same way that I’m asking the consumer to develop the trust in my brand by educating them, in order to have a good partnership as a business person, you need to invest time to go meet them.
“I won’t sign a partnership or a new distribution deal with anyone unless I’ve gone myself, I’ve met them, and I’ve spent a day or two or three with them. It is easier because all business is about personal relationships.
“I can’t advocate enough that it’s good for any early stage business to try to find someone who in their industry has done it and to try to meet with them. If they can support you and if they believe in your vision, there’s nothing like it.”
Earning trust and forging lasting partnerships is also what our conversation revolves around when we switched to talking about funding. Despite 2016 being a difficult year for investment globally, Rahimtoola successfully raised a Series A funding round from a European investor, securing a base to grow the brand to the next level.
“I didn’t really care where the investor came from as long as they shared the vision, and had the maturity not to be in a rush, because everyone seems to be in a rush these days, whether it is founders or investors,” he says.
“What I have found is that in this region two types of things often happen. Either there are plenty of people who do what I call micro seeding, which I did not need, or a lot of people who want to be in tech, and we are not a technology player.
“I will even go as far as to say there was a tech investor here who saw the pitch deck and said: “Well, can you put an e-commerce tech spin on it? Because if you can, then it’ll be more attractive to investors.’ It didn’t make sense to change the product, to change the business plan, just to find funding. That didn’t make sense to me.
“There’s only a handful of people here who are actually interested in a consumer business but they are looking for bigger deals, whereas in Europe, because interest rates are so low there, you have a lot of individuals and family offices with liquidity which they don’t know where to invest.”
Herbal Essentials has started exporting to Qatar and Oman, and in just few months the team will start implementing their global expansion plans. In parallel, they continue exploring different parts of our planet in search of plants and products with specific skin healing benefits.
Was this big change of direction in his life worth it? As in the case of many others – Jack Ma founded Alibaba when he was 35, Sam Walton set up WalMart when he was 44, and Henry Ford was 40 when he started Ford Motor Company – clearly yes.
“I think leadership is about holding true to your values and your beliefs,” Rahimtoola says before we part ways.
“It is also about empathy. You have to understand what your team, your business partners, the people in your ecosystem are thinking. So, stick to your values, lead, when times are tough keep the moral up, and work hard.”