THEY ARE COUSINS IN BLOOD, but brothers by nature. Ever since they were kids, Nelson and Terence Loh did everything together, so it was only natural that when they left their respective investment banking jobs in 2008, they would go into business together. Born two years apart, Nelson, 38, and Terence, 40, set up the investment vehicle Dorr Group (named after Danny Ocean and Rusty Ryan - their favourite characters in the heist movie Ocean's Eleven) which manages over US$4 billion in assets.
But their real passion lies in the Novena Global Lifecare Group which they started in 2010 to offer no-frills, affordable aesthetics treatment to a booming middle-class population across Asia. Their disruptive formula worked, as Novena is now the largest medical aesthetic chain in Asia with over 100 clinics treating more than two million patients in Singapore, China, Hong Kong, Taiwan, Korea, Indonesia, India and Malaysia. It currently has 10 clinics in Singapore with a database of 150,000 patients, and recently opened a clinic in Madrid, the first of many planned for Spain to gain a foothold in the Latin American market.
Their success comes despite being hit by a major crisis in 2015 when their Singapore partner - the founding doctor of the PPP Laser Clinic chain - quit. The clinics started shutting down, leaving clients with prepaid packages in the lurch. A lawsuit ensued between the two parties, which the Lohs won.
But the real battle had just begun. The Singapore business was in shambles, and the cousins, who were based in China to focus on overseas markets, decided to come home to repair the damage to its reputation. They renamed the clinics Novu, re-opened them (with some of the original staff) and honoured all the outstanding packages. Within 18 months they had steered the business back on the rapid expansion path that the group is on now.
Novena is also expanding into integrated healthcare, especially with its acquisition of a majority stake in Taiwan's Hexin - a provider of health screening services, and the opening of its first anti-ageing centre in Shanghai this year. It also plans to list on Taiwan's stock exchange to raise US$150 million for its regional expansion.
You started out as investment bankers, managing billions of dollars in assets and investing in consumer, tech and media industries. What made you go into healthcare and specifically, offering S$50 aesthetic treatments when other doctors charge upwards of S$1,000 for a single procedure?
We've always wanted something that we can call our own, that could be started in Singapore and scaled up, in an industry with a rosy outlook, that would not be replaced by the Internet. Healthcare was one of them. In the past, aesthetics was really limited to affluent people. We wanted to be disruptive, taking our inspiration from AirAsia's Tony Fernandes who made flying affordable and completely revolutionised the airline industry.
It's the growing middle-class story of Asia where, after the basic needs are met, people are looking at having better lifestyle experiences, including wanting to look good without going under the knife. We already own a Korean aesthetic equipment manufacturing company, and after seeing the trends and the technology behind it, we felt that it was about stringing all these elements into a nice little package and getting as many people to experience it as possible.
How do you deal with the perception that cheap isn't good, and may not be safe?
We believe the result speaks for itself. This is something new that we're doing which is why we were the only ones in the industry willing to let our patients try out the treatments three times for free. They get to see the results and how it's the science (machines) that's doing the work and we make sure all the safety protocols are in place. So patients have the confidence that everything is well-organised, there's a system, and they see results. That's where the conviction and credibility come in.
How badly did the 2015 setback with the PPP clinics and lawsuit affect you?
When it happened, some of our partners, even our lawyer, asked if it was worth continuing the business. The company had no money. There was S$20 million in liabilities - S$20 million worth of packages sold and the money all taken away. Most of the clinics had closed down and people were let go. It took a lot of conviction for the two of us to say: "Let's move back from China because this is Singapore, and if anything goes wrong in Singapore it affects the branding in the rest of the world." Also, at the time, there were a few similar scandals with other brands. We spent the next 1.5 years really going to the ground, re-opening the clinics and building up the credibility again. For nine months we were just honouring these packages.
Did you lose a lot of money? And how do you make money, giving away so many free treatments?
We wouldn't say lose. The company is profitable now, we're expanding and we were the first Singapore company to win an award for best enterprise in China in 2016. These days, building a business is very different. AirAsia was unprofitable for 10 years. It's about sustainability versus profitability. I can open a shop for 12 months, charge as much as I can and close down. Will I still be around in year two or year three? But if you tell me 20 per cent of Singaporeans - one million people - come to my clinics every month, we may lose some money but it builds our brand and that to us is more valuable. I capture a loyal group of customers who will bring me new customers.
You've been accused of treating people like numbers - databases to be monetised.
We were quoted out of context. We are tech investors first and foremost. It's about taking a social media model and applying it to a traditional business. In the new economy people are sharing rides, sharing accomodation. It's about sharing positive experiences and building a community. That's where we're coming from.
You both come from a very wealthy family. Are you just two rich kids playing with family money?
None of this is family money. Since we started Dorr not a cent came from the family. In fact, Terence turned down the opportunity to run one of the largest car-distribution companies in China. Of course, when growing up we had access to education and resources which gave us an edge and made us want to really create something (big).
Is Novena a long-term goal or like most investors, will you look for an exit strategy?
Our goal is to scale this business up, so we have enough to keep us busy for the next five years or more. A lot of things we are doing have not been tested before. We really need to be in the driver's seat to be steering it. We have family members actively involved so it's almost like a family business. We're still relatively young, so we'll be involved for a very long time.
So what's the ultimate goal?
We want to make Novu a homegrown brand from Singapore that can be global. We can be another Singapore Airlines, another Charles & Keith. That's what our vision of the business is.