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The salon touch-up

Looking good probably never made more business sense than now in India. Beauty and grooming salon chains will surely vouch for that even as they expand across major cities quickly, with some of them even extending to day spa services.

business Updated: Nov 07, 2010 20:35 IST
Anita Sharan

Looking good probably never made more business sense than now in India. Beauty and grooming salon chains will surely vouch for that even as they expand across major cities quickly, with some of them even extending to day spa services.

“Our bridal services have grown big in two years. Not just the brides, but even grooms, and families and friends of both want beauty services for the wedding,” said Suvodeep Das, marketing head of the seven-year-old, R180 crore Kaya Skin Clinic.

It’s not just the bridal services that are in huge demand. Hair, beauty and grooming salons have seen rapid growth in urban India as consumers — men and women — have begun to view ‘looking good’ as an essential part of their changing lifestyles.

“The consumer today is very evolved and, in tune with the global trends, knows what he/she wants. Our research shows that men and women are now increasingly conscious of their appearance and grooming, both in their professional and personal lives,” said Sandeep Ahuja, MD VLCC Health Care.

As Shahnaz Hussain, who owns Shahnaz Hussain Salons, observed: “Today’s Indian woman is aware of the benefits of beauty care. She is financially independent, has personal disposable income and is willing to spend on salon treatments.” Most chains say their male clientele has also climbed to 20-35% of total clientele.

Salon chains, big and small, are scaling up their presence. A recent L’Oreal study found that of the R5,070 crore beauty care market, beauty services dominate with an 87% share, of which organised beauty services hold a five per cent share. Industry experts estimate that the organised services are growing at 30-35% currently. To reach out to more consumers, many salon chains have cut prices.

Salon chains mostly target urban SEC A and B consumers. While more of a metro and large city phenomenon, some chains are also beginning to look at smaller towns. Shahnaz Hussain Salons has extended its presence to Bhatinda, Jabalpur, Faridabad and Dehra Doon, among others. Kaya has extended its clinics to Guwahati, Vishakhapatnam and Bhopal.

Lakme Beauty Salons has 110 franchised salons in 35 cities, offering beauty and grooming services. It recently also launched its premium format, Lakme Studio, in Mumbai, Delhi, Bangalore, Chennai and Hyderabad.

Kaya Skin Clinics has 81 company-owned clinics across 26 cities. “We created the concept of cosmetic dermatology in India. With such services, consumers look for efficacy and safety, professional service and ambience, and expertise and guidance. Owning the clinics gives us better control on quality and delivery,” Das said.

Shahnaz Hussain Salons has 212 salons in India, five of them company-owned and the rest franchised. “We have become known for specialised treatments for skin and hair and our therapeutic products. We have also established brand loyalty and identity in the high end and the middle segments of the market,” said Hussain.

VLCC Health Care has 150 salons in 90 cities in India, 90% of which are company-owned. “Besides slimming and beauty services, our proprietary cosme-dermat skin treatments are very popular,” said Ahuja. VLCC plans to expand its day spas — it has four already — and enter the medi-spa space.

Newer salon chains are also expanding. Jawed Habib Studios (200 salons); YLG (You Look Good) Salon & Spa (eight salons; 100 by end-2011); premium hair salon chain Juice, which tied up with Channel [V] in July to launch [V] Juice Lite salons for lower priced services; and Mumbai-based Enrich, with 15 salons are some examples. Naturals, with 67 franchised and eight company-owned salons, plans on 1,000 by 2015. In 2007, salon brand Jean Claude Biguine entered India with five salons, with plans for 50 by end-2010.

Trends In Vogue, owned by CavinKare, opened premium beauty salon Limelite in Bangalore and plans four in Chennai. Limelite is CavinKare’s third salon format, after Green Trends and Fyne Cut. Talwalkars, in a 50:50 JV with Pantaloon Retail, has announced the acquisition of Star and Sitara, a hair and beauty salon chain.

There’s growing interest in salon chains. Helion Venture Partners invested Rs 20 crore in YLG last year. VLCC raised private equity funding from CLSA Capital Partners and Everstone Capital's Indivision fund.

Philip Giles – director, professionel products division, L’Oreal India, said, “The Indian professional hair and beauty market is already one of the fastest, if not the fastest growing markets worldwide.”