Mélange of beauty and wellness, benefitting the franchisees

Today as the society advances into the realm of modernity, the concept of beauty and wellness has taken a whole new dimension.

In this new world, refined style and appearance have become absolutely critical for a myriad of reasons. With the proliferation of mass media, rapid urbanisation and rising affluence, people are increasingly becoming conscious about their fashion and looks.

As the willingness to experiment with their looks and style, permeates through the mindset of Indian women and men, India is slowly becoming a major consumer of beauty and hair care services. Although at a nascent stage, the organised hair care, beauty styling and wellness segment in India is becoming one of the fastest growing segments in India. The verticals across sectors are witnessing a swift transition from being “Unorganised” to “Organised” and now being recognised as “Specialised chains,” which gives them a tall standing as an expert.

The unprecedented growth of the industry is indicative of the lucrative opportunities through franchising that exists in the current business economics of the country. Indian wellness service market is merely USD 2.2 bn (INR 110 bn) that covers a wide spectrum of services ranging from beauty therapies to ayurvedic and slimming solutions.

 According to a report, the Indian beauty and salon industry is a significant part of the growing wellness business in India and is estimated at INR 35 bn, of which organised segment only stands for 20% of the total value. The organised segment is growing at a CAGR of 30%.

Although franchising in beauty salons is quite a recent phenomenon but this has not limited the brands eyeing expansion only in the metro cities. Rather franchising has contributed in a big way for brands to penetrate the markets deeper with outlets in the tier I and II cities also. Another fostering trend is diversification of service bouquet, which has now become mandatory for majority of franchisors in health, beauty and wellness industry. Big brands are constantly expanding into wider segments to enlarge the consumer base. One such example is the Strands Salon Pvt Ltd which has launched Bourjois Spa as well as Strands Academy and now the Perfect 10, a nail salon. The objective is simple, to capture a larger audience. Jawed Habib and Jawed Habib Xpress and its training academy are synergistic businesses to each other thus extending extra services besides its niche. L’Oreal Professional, a division of L’Oreal, has invested in technical centres in Mumbai, Delhi, Kolkata and Bangalore, along with franchising their branded salon business.

Diversification is a growth strategy for many brands, but it is recommended that companies whilst diversifying should be confident about the diversification being well aligned with company’s core strength. It is a step forward from the company to offer a 360 degree service paradigm to the customer and thus benefiting the franchisee by increasing his target segment as well as the bringing in the extra revenue, thus presenting numerous advantages to both franchisors and franchisees.

The author is a senior consultant with Francorp