How VLCC Has Been Able To Grow Consistently In The Highly Competitive Market
How VLCC Has Been Able To Grow Consistently In The Highly Competitive Market

In the increasingly competitive field of beauty and personal care (BPC), 30-year old brand VLCC has been able to continuously hold a significant market share in the BPC segment. With 216 beauty clinics across 10 countries, it is one of the top players in the industry. The company is now set to open IPO by the end of this quarter.        

For IPO, the company is going to offer two components: primary – the fresh issue of Rs 300 crore and secondary – sale of shares by existing shareholders comprising 23.69 percent of the pre-issue paid-up capital. The issue size will depend on the pricing of the shares being issued and will be decided closer to the date of the issue. 

As of March 31, 2021, VLCC serves customers across 310 locations in 143 cities and across 12 countries in South Asia, South East Asia, the Gulf Cooperation Council Region (“GCC Region”), and East Africa. The company had a total income of Rs. 5,652.42 million and profit/(loss) for the year after tax of Rs. 62.42 million, with an EBITDA of Rs. 1,501.19 million in Fiscal 2021.

Core Business Model

Founded by Vandana Luthra as a beauty and weight management services center in 1989, incorporated in 1996, the company presently has three verticals as their core businesses: a) VLCC Wellness & Beauty Clinics (‘Wellness Clinics”), b) Personal Care Products, and c) VLCC Institutes of Beauty & Nutrition. 

The total revenue of our Wellness Clinics business has been Rs. 5,441.63 million in fiscal 2019, Rs. 4,806.25 million in fiscal 2020 and Rs. 3,416.29 million in fiscal 2021.  The total revenue from the products business has been Rs. 2,499.53 million in fiscal 2019, Rs. 2,269.71 million in fiscal 2020 and Rs. 1,825.39 million in fiscal 2021. 

The company has grown the retail reach for their personal care products business in India in the general trade and modern trade channels through a weighted distribution strategy to cover over 110,000 stores. As for the institutes, between fiscal 2019 to fiscal 2021, the company trained ~10,000 students annually on an average at their Institutes as well as through participation in the Government of India’s 'Skill India Mission'.

“Due to Covid-19 pandemic, unfortunately, lots of small unorganized sector businesses in the wellness services and skills domain have shut or are shutting their operations. The wellness and beauty industry is getting consolidated and becoming more organized than ever before,” said Mukesh Luthra, Chairman, VLCC Health Care. 

“For organized players like VLCC, there exists clear opportunity to get multi-fold new customers making business even more predictable,” he added.

In fact, another famous beauty brand Nykaa has announced its IPO too in October 2021. A proper analysis is needed to understand what is contributing to the growth in the beauty industry. 

Understanding Beauty Industry

Globally, the beauty industry amounts to $511 billion and is set to reach $716.6 billion by 2025. The US and Canada are the largest markets at $62.46 billion and $69.4 billion. The Indian beauty industry, which has been growing rapidly in the last couple of years, maybe catch up, with currently at around $10 billion in 2021, expected to reach $30 billion by 2025. 

The Indian beauty industry, which has been growing rapidly in the last couple of years, maybe catch up with currently at around $ 10 billion in 2021, expected to reach $30 billion by 2025. 

The top players in India’s BPC market which also have an international presence are Hindustan Unilever, L'Oréal India, and Colgate-Palmolive India, together capturing 38 percent of the market. Dabur India, Marico, Godrej Consumer Products, Emami and Patanjali Ayurved, etc. are top domestic players enjoying a strong presence in the Indian market. Many beauty start-ups are also expected to enter the market. Several prominent international players Gillette India, Johnson & Johnson (India), Reckitt Benckiser (India), and Procter & Gamble have also found their own customer base in the Indian market. Despite the saturation, the market still shows strong potential for further growth. The question arises of how this potential will be exploited. 

One of the factors, for instance, that is driving the growth, particularly in the rural markets, is growing consciousness about grooming and increased brand awareness. Even though the conversions through e-commerce channels have been low, because of increased awareness through social media the rural consumers have started mirroring urban aspirations and lifestyles.   

In the urban space, we have seen the growth of specialist channels such as chemists, beauty stores, modern trade that are adding to the buzz in the beauty sector. Such experience outlets which provide an uncluttered product spread in a clean environment are only going to grow in the next few years. 

Scope In The E-commerce

Even though the sale of beauty products still majorly happens through retail channels, e-commerce holds a lot of opportunities. The success of the brands like Nykaa and Purplle is indicative of the same. 

VLCC over the last several years has successfully extended the brand from just a services company to a services and products brand in the overall wellness & beauty domain and is currently working towards making the transition from a brick-and-mortar to an omnichannel presence. 

VLCC products through e-commerce channels have increased from 6.4 percent to 9.6 percent to 26.4 percent of the total product sales in India between fiscal 2019, fiscal 2020, and fiscal 2021, respectively. Such sales have increased by 129.1 percent, from Rs 167.44 million in fiscal 2020 to Rs 383.59 million in fiscal 2021.

Luthra stated, “We plan to differentiate ourselves by being solutions and experience provider of packages of products and services that fully address the customer’s everyday health, wellness and beauty needs, through this omnichannel approach which would encompass both brick-and-mortar operations as well as a significant digital and online presence for our wellness services, personal care products, and skill development offerings.”

The company has launched a mobile app for wellness & beauty services, through which the company is working towards tracking the customer’s case history on diagnosis, clinical data, fitness data, health risk assessment, with artificial intelligence to provide insights like behavioral health risks monitoring customer progress. The VLCC also has a skill development mobile app that was launched recently and is in the process of up-gradation will ensure that we digitize the end-to-end learning process for the students. 

Given the growth in the beauty industry, with top players like VLCC and Nykaa opening their IPOs, major developments are expected in the days ahead.  

 
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Top 15 Technology Trends Reshaping Fashion Retail in 2024: Dress for the Future
Top 15 Technology Trends Reshaping Fashion Retail in 2024: Dress for the Future
 

The fashion industry is in the midst of a digital revolution, with technology weaving its way into every aspect of retail, from design and production to marketing and customer experience. As we step into 2024, the pace of innovation continues to accelerate, presenting exciting opportunities for both established brands and emerging players. To stay ahead of the curve, understanding the key technology trends reshaping fashion retail is crucial.

This article dives deep into the top 15 trends that will have a significant impact in the coming year, providing insights and examples to help you leverage them for success. Whether you're a fashion designer, retailer, or simply an avid consumer, buckle up for a journey into the future of fashion.

1. Immersive Shopping Experiences:

Gone are the days of static images and basic product descriptions. Consumers crave engaging and interactive experiences, and technology is delivering. Here are the key drivers:

  • Augmented Reality (AR): Imagine virtually trying on clothes before buying them. AR superimposes digital clothing models onto users, allowing them to see how garments fit and look on their specific body type. This reduces returns and boosts customer satisfaction. (Source: The AR/VR Headset Market is Expected to Reach $20.4 Billion by 2024, Statista)
  • Virtual Reality (VR): Take things a step further by stepping into immersive, 3D virtual showrooms. Brands like Rebecca Minkoff and Tommy Hilfiger are already offering VR experiences, allowing customers to explore collections and interact with products in a realistic setting.
  • 3D Product Visualization: High-quality 3D models give a detailed view of products from all angles, zoom levels, and even in different lighting conditions. This enhances online shopping experiences and increases conversion rates. (Source: 3D Modeling Market to Reach $3.8 Billion by 2027, 3D Printing Industry)

2. Personalization at its Peak:

One-size-fits-all is a relic of the past. Consumers expect personalized experiences, and technology is making it possible:

  • AI-powered Recommendations: Leverage customer data and purchase history to suggest relevant products, predict styles they'll love, and offer personalized styling advice. (Source: 80% of consumers are more likely to do business with companies that offer personalized experiences, Epsilon)
  • Chatbots and Virtual Assistants: These AI-powered tools provide real-time customer support, answer product inquiries, and offer personalized recommendations, 24/7.
  • Dynamic Content: Showcasing products and offers tailored to individual preferences based on demographics, browsing behavior, and past purchases creates a more relevant and engaging experience.

3. Livestream Shopping Takes Center Stage:

Livestream shopping blends entertainment and real-time commerce, allowing brands to connect with audiences directly and generate instant sales. Expect to see:

  • Interactive Livestreaming: Viewers can ask questions, interact with hosts, and purchase products in real-time, creating a dynamic and engaging shopping experience.
  • Influencer Collaborations: Partnering with relevant influencers for livestream shopping events leverages their audience trust and drives sales.
  • Shoppable Livestreams: Products featured in the livestream are tagged and instantly purchasable, removing friction from the buying journey.

4. Omnichannel Integration Seamlessly Blends Online and Offline:

The lines between physical and digital retail are blurring. Here's how:

  • Click-and-Collect: Customers order online and pick up in-store, offering convenience and flexibility.
  • Buy Online, Return In-Store (BORIS): Allow customers to return online purchases to physical stores for added convenience.
  • Mobile Point-of-Sale (mPOS): Empower store associates with mobile devices to assist customers anywhere on the shop floor, enhancing the in-store experience.

5. Sustainability Takes Center Stage:

Consumers are increasingly conscious of the environmental impact of fashion. Technology is helping brands become more sustainable:

  • Transparency through Blockchain: Blockchain technology enables tracking the origin and journey of materials, ensuring ethical sourcing and responsible production.
  • Sustainable Materials and Production Processes: Utilizing recycled materials, organic fibers, and low-impact dyeing techniques is becoming increasingly important.
  • Circular Economy Initiatives: Resale platforms and rental services encourage clothing reuse and extend the life cycle of garments.

6. Voice Commerce Emerges as a Powerful Tool:

Voice assistants like Alexa and Google Assistant are changing how we interact with technology, and fashion is no exception. Expect to see:

  • Voice-activated Shopping: Purchase clothes hands-free using voice commands, ideal for multitasking or busy consumers.
  • Product Information and Reviews: Ask voice assistants for product details, size recommendations, and customer reviews for informed decision-making.

7. Artificial Intelligence (AI) Streamlines Operations:

AI is automating tasks and boosting efficiency across the fashion value chain:

  • Demand Forecasting: AI algorithms analyze sales data and trends to predict future demand, optimizing inventory management and reducing stockouts.
  • Automated Design and Production: AI can generate design ideas, personalize patterns, and even optimize production processes.
  • Fraud Detection and Prevention: AI helps identify and prevent fraudulent transactions, protecting both brands and customers.

8. The Rise of Social Commerce:

Social media platforms are evolving into powerful shopping destinations:

  • Shoppable Posts and Stories: Allow customers to purchase products directly through social media posts, eliminating the need to switch platforms.
  • Social Proof and Influencer Marketing: Leverage user-generated content and influencer partnerships to build trust and drive sales.
  • Social Gifting: Social media platforms are introducing gifting features, making it easier to purchase and send fashion items to friends and family.

9. The Metaverse Beckons:

The metaverse, a virtual world where people can interact, shop, and socialize, is still in its early stages, but fashion brands are already experimenting.

  • Virtual Fashion: Design and sell digital clothing items specifically for avatars within the metaverse.
  • Virtual Showrooms and Experiences: Create immersive virtual spaces where customers can explore collections and interact with brands.
  • NFTs and Digital Ownership: Offer unique, limited-edition digital fashion items secured through NFTs (Non-Fungible Tokens).

10. Data-Driven Decision Making:

Data is king, and fashion brands are leveraging it to gain insights and make informed decisions:

  • Customer Analytics: Analyze customer behavior, preferences, and purchase history to understand their needs and personalize offerings.
  • Marketing Attribution: Measure the effectiveness of marketing campaigns across different channels and optimize advertising spend.
  • Trend Forecasting: Identify emerging trends and styles based on social media data, search trends, and sales patterns.

11. Robotics and Automation Take Over Repetitive Tasks:

Robots are taking over repetitive tasks in warehouses and factories, improving efficiency and accuracy:

  • Automated Picking and Packing: Robots can speed up order fulfillment and reduce errors.
  • Quality Control and Inspection: Robots can inspect garments for defects with greater precision than humans.
  • Automated Customer Service: Chatbots powered by AI can handle basic customer inquiries, freeing up human agents for complex issues.

12. The Power of Community and Co-Creation:

Brands are building stronger relationships with customers by fostering a sense of community and co-creation:

  • User-Generated Content (UGC) Campaigns: Encourage customers to share photos and videos wearing your clothes, leveraging their authenticity and reach.
  • Crowdfunding and Collaborative Design: Allow customers to contribute to product design and development through crowdfunding platforms.
  • Loyalty Programs and Exclusive Experiences: Reward loyal customers with exclusive access to products, events, and experiences.

13. Cybersecurity Becomes Paramount:

As technology advancements create new opportunities, cybersecurity threats also evolve. Brands need robust security measures:

  • Data Protection: Implement strong data encryption and access controls to protect customer information.
  • Payment Security: Ensure secure payment gateways and transaction processing to prevent fraud.
  • Cybersecurity Awareness and Training: Educate employees about cybersecurity best practices to minimize risks.

14. The Future of Retail is Phygital:

The physical and digital worlds will converge further, creating seamless and engaging experiences.

  • Interactive In-Store Displays: Interactive displays with AR features and product information enrich the shopping experience.
  • Personalized In-Store Recommendations: Utilize customer data to offer personalized product recommendations while they shop in-store.
  • Frictionless Checkout: Implement self-checkout options and mobile payment solutions for faster and more convenient transactions.

15. Continuous Innovation is Key:

The fashion industry is constantly evolving, and staying ahead of the curve requires embracing continuous innovation. Here are some key strategies:

  • Invest in Research and Development: Allocate resources to explore emerging technologies and experiment with new solutions.
  • Partner with Tech Companies: Collaborate with technology providers to develop innovative solutions and access expertise.
  • Adopt an Agile Mindset: Be open to change, experiment quickly, and learn from failures to continuously improve.

By embracing these top 15 technology trends, fashion brands can unlock new opportunities, enhance customer experiences, and thrive in the ever-evolving retail landscape. Remember, this is just the beginning. The future of fashion is brimming with possibilities, and those who embrace technology will be the ones shaping it.

 

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