Health and beauty Aug, 27 2012

Hair raising profits

There has been a huge shift in the market for haircare and the CAGR for hair-care is expected to grow by at least 10 per cent, making India one of the fastest growing haircare markets. Franchising is playing a dominant role in the growth of the market. Re

By Mehak Rampal
Feature Writer
Hair raising profits

From granny’s tips and tricks to transplants, haircare has come a long way in India. Today, men are equally focused on having a head full of hair, as women are about a healthy mane. Rising consciousness about looks and increasing disposable incomes are contributors to this growth.

The public today demands more than shampoos and conditioners. Hair colours, styling products, hair repair treatment, hair spa treatment, transplants, hair weaves have gained popularity and have increasing demand as well.

Shampoos and conditioners, which collectively accounted for around two-thirds of all new launches in 2009, are the mainstay of the market but categories such as styling agents and hair colorants are now beginning to gain traction. India ranks amongst the top 10 markets for hair care products and due to this, there is a huge scope for retail investments and franchising.

Trends in haircare in India

  • Haircare has become a regime as opposed to being an occasional activity. To add to this, people are willing to experiment and are not apprehensive in paying for expensive products. Hence opportunity has increased manifold and a lot of brands are making their way into the market.
  • Another major factor is the market opting for organic and natural products. Most of these products are priced steeper than products using chemicals.
  • To add to these, there is a lot of segmentation in haircare products. Firstly, there is the difference between products for men and women. Further on, there are products and treatments for different kinds of hair ailments. So the options one has are endless.

Franchising in haircare

Considering the growing demand for haircare a number of brands have opted for franchise route for expansion. Franchising is experiencing vigorous increase in the salon and beauty services industry because it is a skill-based business concept offering easy learning. Another factors for taking up franchise route is that it does not involve giving away equity. Also with franchising brand building and market penetration can be done at no additional cost. Franchising also offers home grown brands an opportunity to expand internationally.

Some of the prominent companies that have carved a niche for themselves despite increasing competition are discussed here.

Jawed Habib: Jawed Habib has been franchising since 1992 and have over 225 centres across 21 states in India. A Jawed Habib franchisee need to invest Rs 10 to 20 lakh and should have an area of around 100 sq. ft for the express salons. For a specialty salon, an area over 350 sq. ft. is required.There are currently 148 franchised outlets of Jawed Habib.

Vcare Hair: Vcare provides a low cost franchise opportunity in south India. The brand commenced franchising in 2009 and with an investment of Rs 2-5 lakh over an area of 600 sq. ft., one can own a franchise of Vcare Hair. The science of hair and scalp was founded in London in 1902 and Carolin Praba Reddy was the first South Indian certified trichologist from the International Association of Trichologists (IAT), Australia, who started Praba’s VCare Hair Clinic in 2001 in Chennai. With a strong network of over 100 professionals in clinics at Andhra Pradesh and Tamil Nadu, VCare caters to the hair care needs of people with a mix of scientific approach and ancient wisdom.

Wig-O-Mania: Headquartered in the United Kingdom, Wig-O-Mania are the manufacturers and promoters of Wigs and Hair pieces without the need of a chain of distributors and middlemen. A potential franchisee will require an area of 500-600 sq. ft along with an investment of Rs 24 to 30 lakh to associate with Wig-O-Mania. Elaborating on brand’s India expansion Hasnain Mohamedali, CEO, Wig-O-Mania says: “We wisely appointed Franchise India to become our core marketing partners. Presently, we have concluded an exclusive tie-up with Naturals for South India that boasts of 150 salons and another 45 coming up in the next two months. We have offered a similar exclusive agency to JCKRC Spa Destination for North India. In the Western Zone we are working with Enrich Salon that boasts of 50+ salons to-date and a few other high end salons along with JCRKC.”

Dr A’s Clinic: Dr A’s Clinic is a leading centre specialising in hair transplant repair surgeries in Delhi, India. It enjoys commendable reputation with over 13 years of operations. They have signed up with Franchise India to help expand their business. An area of 250-1,500 sq. ft with an investment of Rs 5 lakh-1 crore is needed for this franchise. The company intends to increase its presence by opening five clinics across India in the span of one year.

ADHI Clinic: An area of 1,200 sq. ft with an investment of Rs 50lakh to 1 crore would be needed for a franchise of ADHI. Dr Santosh Katekari, Founder and Promoter of ADHI-India said; "We provide a complete hair solution with Mesotherapy for hair re-growth and hair fall control, medical for prevention and recently launched follicular hair transplantation. We are geared up to announce our growth plans, through our franchise and retail model, across India and are optimistic to associate with Francorp to utilise their expertise in the expansion of our clinics.”

Strands:  Strands Salon and Spa, a premium hair and spa salon, has engaged the expertise of Franchise India Brands Limited (FIBL), a part of Franchise India Group, for its strategic nationwide expansion. Naunihal Singh, Co-Founder and Managing Director, Strands Group Pvt. Ltd, said, “Franchising is an apt business model to expand, especially in a country like India. Expanding through franchisees will keep us updated of the competition, changes in market trends and new opportunities specific to the market we are targeting.” Presently, Strands is successfully running in places like Delhi, Chandigarh, Panchkula, Mohali, Ludhiana, Yamunanagar, Panipat, Patiala and Trivandrum. Now, the company is looking at expanding overseas and is already exploring the European markets.

Outlook for the future

The Indian haircare market is driven by urban consumers. And with rising disposable income, the haircare market is looking upward. Consumers are becoming more conscious about global trends and are willing to spend more on haircare treatments. Haircare is seen today as an indulgence and both men and women are opting for various haircare services increasingly. Under such scenario future seems to be quite bright for the industry. Thus, an aspiring entrepreneurs looking for a lucrative business opportunity can opt for franchise of a hair care brand that suits his pocket as well his interest.

Related: Associate to get your biz in a profitable shape

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