Brian Ng, 43; Bernard Ng, 41; and Samuel Pei, 41; first met each other when they were pursuing a degree in accountancy at Nanyang Technological University (NTU).
Being in business school, it’s no surprise that the three made a move to dive into the entrepreneurship world together.
In their first year of university in 2003, they launched their first business — an advertising and printing company called Bideas. Still operational today, it was inspired by students’ frequent need to print banners, posters and other collateral for their projects.
A decade later, the trio embarked on yet another business venture, this time dipping their toes in the hair and beauty industry.
Founded in 2013, KC Group — initially named after the acronyms ‘Korean Concept Group’ — has since grown to become one of Singapore’s fastest-growing hair and beauty group, helming a team of more than 300 creative hairstylists and beauty professionals.
They started out with Kcuts, a quick-cuts chain
Venturing into the beauty space had never crossed their minds, but a simple chat over coffee changed things up for them.
Back in 2012, they were leisurely having coffee in a mall while waiting for their wives — who had also gone into business together, running enrichment centres — when they noticed a vacant shop lot at Fusionopolis.
The 300 sq ft space inspired us to brainstorm ideas for our next business. It had to satisfy four criteria: It should be a cash business, be scalable, have good profit margins, and be in trend.
– Samuel Pei, co-founder and director of KC Group
The Singapore market was on the cusp of undergoing a retail K-transformation, and Korean concepts were steadily going mainstream. Riding on the rising Korean beauty (K-beauty) trend then, they came up with the idea of Kcuts, a no-frills quick-cuts hair salon chain that offers affordable Korean-style haircuts in just 10 minutes.
To help achieve this vision, they hired a South Korean hair stylist to train their staff, who is now the chief director-stylist in the Group.
In 2013, they opened the first Kcuts outlet in Fusionopolis, before going on to open a string of other outlets in heartland malls in the following years.
In the last year alone, they opened 12 outlets. “Many money changers and laundry shops had folded during the pandemic, making more spaces available,” explained Samuel.
The pandemic has also emphasised the need for digitalisation, which prompted them to launch a mobile app for Kcuts, which is progressively being rolled out across all its outlets now. Through the ‘kcutsGo’ app, users can skip the queue, go cashless, and enjoy flash deals and loyalty benefits, among other things, with a few simple taps on their phone.
Besides Kcuts, KC Group founded new hair concepts every year. This includes Apgujeong Hair Studio, a full-service Korean hair salon; Myeongdong Hair Studio and Kerluxe Hair Studio, another full-service hair salon brands that dominate neighbourhoods and office areas; Aoyama Hair Studio, a Japanese hair salon; and James Barker Barber as well as Clippers Barber, which are both based on English gentlemen barbering concepts.
New concepts were created to address the needs of different target audiences in our market. By positioning our brands to cater to the different price and age segments of the market, we effectively enlarged our market share. … By expanding into new concepts, it also creates diversification of risks so that our group becomes more resilient in any stage of the economic cycle.
– Samuel Pei, co-founder and director of KC Group
For instance, during an economic downturn, some segments of the market may change their spending habits and switch to the more affordable brands under KC Group’s umbrella.
Similarly, during an economic upswing, their spending pattern could reverse, in which consumers may be more willing to splurge on experiential treatments instead of being overly price sensitive.
Expanding their quick-service concepts to facials
Later on in 2016, a business trip to South Korea to research the hair industry opened their eyes to the lucrativeness of the beauty industry.
We opened Hanbang Skin Solutions in 2018, our first facial brand with a focus on Korean facial contour therapy. It was a costly endeavour that took almost S$300,000 to set up, yet it was hard to scale.
We were very naive. Only after we got into the beauty business did we realise how it actually works. We thought we could bank on customers coming in each day for a S$150 facial to cover our rent, but we realised the beauty market is very package-driven.
Sales consultants were under pressure to get people to sign five-figure packages, and it bred discontent and wariness among customers who simply wanted to get a facial done.
– Samuel Pei, co-founder and director of KC Group
When the founders went undercover to check out other facial salons, they felt “stressed” going for free trials. This was what prompted them to come up with the idea of Kskin, an express facials service sans the hard-sell packages.
After a slight delay to the circuit breaker period, the first Kskin outlet was eventually launched at Clementi Mall in August 2020. It aims to disrupt the traditional beauty industry with its unique “no appointment, no package” 15-minute express facial services.
“We want to help people enjoy a decent, stress-free facial service and spend what they want to spend. It’s [about] going back to the original business model of facials ‘times’ number of customers,” shared Samuel.
Beyond eliminating aggressive sales tactics, KC Group also makes it a point to have the outlets of their two beauty brands strategically located in MRT-connected shopping malls and HDB commercial estates across Singapore.
Aggressive expansion for greater brand awareness
Although the trio are not first-time entrepreneurs, Samuel expressed that it’s never easy starting up a new brand.
At the start, KC Group strongly pushed for their brands to “do good” and actively took part in campaigns with positive social impact.
Through partnerships with organisations driving social causes such as Children Cancer Foundation via their signature annual ‘Hair For Hope’ fundraising events, as well as Focus on the Family to promote strong family values, the public became more familiar with their brands and were able to trust them more.
“It takes courage and faith to step into the unknown,” he said, adding that it was challenging to get people to trust a new brand since they tend to go for tried-and-tested brands.
“It was only when we scale Kcuts beyond 20 outlets [did] people start to take notice of us, and began to treat us as a serious entrant into the hair and beauty industry.”
However, with the ambition to rapidly expand, manpower soon became a problem for them. They eventually turned to franchising as a means of expansion, which allowed them to leverage on the network of their franchise partners to continue growing, even in a tight labour market.
That said, KC Group takes great pride in taking care of its employees. They adopt a pro-family policy, offering employees with families a high degree of flexibility in their work arrangements; as well as offer ITE scholarship awards to encourage eligible staff to pursue their education and up-skill during their tenures with the company.
Now they have 120 outlets across all brands
According to Samuel, their startup capital was “minimal”. The co-founders invested about S$1 million and managed to break even in less than three years. They did not have the backing of any investors, nor did they rely on any bank loans and external financing.
When COVID-19 first hit Singapore back in 2020, they had to quickly adapt to the constantly evolving safe management measures and implement them across all their local outlets.
The cost of business operations also surged during the pandemic phase, with frequent shop closures due to deep cleaning and sanitisation whenever COVID cases were reported.
“High rates of medical leave and sudden staff absentees were also factored into operating costs whenever there are COVID infections or close contact cases occurring on a regular basis, making manpower planning a nightmare for business operations,” said Samuel.
“The bright side of the pandemic is that many more retail spaces suddenly became available, and we were able to seize the opportunity to further expand our retail footprints.”
Today, KC Group has 120 outlets in Singapore across all brands, racking up group sales of S$20 million. In particular, Kcuts and Kskin have 68 and 22 outlets respectively.
With such a strong physical presence islandwide, Samuel admitted that rapidly growing the number of outlets is indeed part of their business strategy to acquire market share.
When it comes to the Singapore market, consumers are spoilt for choices and the need for accessibility and convenience for the customer is paramount if we are keen to capture the mindshare and consumption dollars of our target customers, thus the need for more retail outlet presence and improved reach to our customers.
Having said that, the ability of our brands to retain and cultivate loyal repeat customers is an equally important strategy in order to build brands with longevity.
– Samuel Pei, co-founder and director of KC Group
Sharing future plans, Samuel revealed that they will continue to launch new hair and beauty-related brands.
In fact, they are currently in the midst of launching a new brand of hair removal service in the fourth quarter of this year. Called Smoovee Skin, it uses an advanced form of light therapy, promising a pain-free with no downtime hair removal experience.
Ultimately, KC Group aims to grow to a local presence of more than 200 outlets, and eventually bring its brands overseas as part of its expansion plan.
“Despite the common conception that the market is small and saturated, we firmly believe there are great opportunities for our brands to continue to grow in Singapore. Our brands are well-positioned with unique selling points to differentiate ourselves from the existing competitors,” summed up Samuel.
Featured Image Credit: KC Group