Unlike many startup stories introduced on Shark Tank Vietnam, Mr. Chu Van Nam, from Vung Ang (Ha Tinh), founder and CEO of Nada Oils, "fell in love" and built the Nada essential oil business with 74 points of sale by working for hire and was transferred to 2 essential oil stores by the owner.
Thinking that he would be content with two stores from the previous owner, when he "stepped in" to manage, Mr. Nam realized that the old model would not be able to grow. After that, he sold two stores to create a more systematic system. "Accordingly, Nada Oils was born in December 2017, from one store (counter, sales location), over time there was a system of 74 stores distributed in 45 provinces nationwide" - Mr. Nam shared.
Mr. Chu Van Nam, founder and CEO of Nada Oils, introduced the Nada essential oil business model on the recent Shark Tank program. Photo: Shark Tank
Mr. Nam said that Nada's revenue from 2019 to 2022 was quite high, averaging 8 billion VND per month. Then, due to the impact of the pandemic as well as the economic situation, the number of Nada Oils counters has currently decreased to 36. Of which, 20 counters are directly owned by Mr. Nam, the remaining 16 counters are owned by agents and franchisees. The special thing is that all counters are profitable.
Realizing that the direct sales model to customers at the counter was no longer effective, Mr. Nam expanded his business to the B2B model, targeting corporate customers, specifically focusing on products used for hotels, restaurants, and spas along with products for homes, cars, etc. before.
From the beginning of the year to August 2024, Mr. Nam said that revenue reached 3.7 billion VND/month for both channels, after-tax profit reached 12% because of the new switch to the B2B model, having to invest in machines for customers to borrow. In 2023, Nada's total annual revenue reached nearly 40 billion VND; in the first 6 months of 2024, total revenue was 27 billion VND, each store's average revenue was about 60 to 80 million/month. Profit in 2024 up to August was 3 billion VND, the whole year is expected to reach 6 billion VND.
Nada Oils' core essential oil products.
Introducing to the investors at Shark Tank, Mr. Nam said: “I want to use these counters as warehouses, to display products, advertise, and communicate. Having a store means you don’t have to rent additional space, offices, or warehouses. The store is also the place to provide warranty and maintenance services to customers in the fastest way.”
The startup from Vung Ang (Ha Tinh) said that Nada Oils wants to raise VND8 billion for 20% of shares. Regarding how to use the capital, Mr. Nam said it will be used to develop the D2C online channel, buy machines to sponsor customers to use and develop raw material areas. Currently, Nada has proactively sourced 30% of raw materials with 2 factories in Dak Lak and Dak Nong, the main products are lemongrass, ginger, oranges, grapefruit, the rest are imported raw materials. Nada Oils essential oils have been certified to Quatest 3 standards (quality measurement standards by the Technical Center for Standards and Quality Measurement 3).
Shark Binh commented that the essential oil market is still very large, it can be considered a "blue ocean" for businesses to exploit.
Shark Binh shared that his family is using Nada Oils products and loves them because of the pleasant scent. This "shark" also asked about how Nada Oils takes care of B2B customers. Responding to Shark, the Founder said that he is currently using software, calculated by capacity, and will periodically check every 15 days. Specifically, an average spa will have 4-30 rooms, for each room Nada Oils will sell one machine. At the headquarters, Nada Oils will place machines in toilets and elevator lobbies.
Shark Binh commented that the essential oil market can be considered a “blue ocean” - meaning that the demand for scent solutions in offices is still very large. Even if there are many competitors, as long as businesses sell well and take good care of customers, they will increase their market share.
To decide whether to invest in this essential oil startup or not, Shark Tillman Schulz (a German businessman) asked why the startup convinced the Sharks to invest. Answering the Sharks, Mr. Nam said: First, I have a special love for essential oils. I eat and sleep with it 18 hours a day and without essential oils, I would not be able to go to school and would not have the opportunity to meet the Sharks. Second, Vietnam is a "green gold mine" of essential oils with many precious medicinal herbs and plants, so I always want to bring Vietnamese essential oils to the world, export essential oil materials, and believe there is a way.
However, the CEO of MDS Group (Germany) believes that startups have little chance of exporting to Western countries as well as other Asian countries, so Mr. Tillman Schulz advises startups to focus on the domestic market.
Listening to the story of CEO Chu Van Nam, Shark Minh Beta said that the Founder had a very proud entrepreneurial journey, from a boy with a difficult childhood, working as a buffalo herder and doing many jobs, striving to build a chain of stores, although not yet large. He also said that he appreciated the Founder's flexibility and adaptability in grasping the market's shifts and promised to become a customer of Nada Oils because testing the scent of Nada Oils was really pleasant and comfortable.
At the end of the capital call session, the Founder agreed to Shark Binh's deal of 8 billion VND for 35% of shares.
Shark Binh believes that this is an inspirational story about disadvantaged young people who have successfully started their own businesses, are very dynamic, creative, and constantly turn around the situation to overcome difficulties to bring the business to where it is today. He also suggests marketing methods suitable for startups such as selling on both exchanges and social networks. For offices, they can run a "toilet rescue" program...
Although Shark Binh's valuation was low, the Founder finally agreed to Shark Binh's deal of 8 billion VND for 35% of shares because Shark Binh has a strong online sales ecosystem and has invested in many successful startups.
Source: https://danviet.vn/tu-cau-be-chan-trau-chang-trai-ha-tinh-co-doanh-thu-hang-chuc-ty-dong-nho-khai-thac-mo-vang-nay-20241007234855571.htm
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