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Nov, 08 2010

Thriving consumer services sector

The consumer services industry is all set for a revolution with consumerism on a high. As brand awareness catches up fast among consumers, consumer services sector is growing by leaps and bounds. It's just the right opportunity for you, if you are dreamin

The consumer services industry is all set for a revolution with consumerism on a high. As brand awareness catches up fast among consumers, consumer services sector is growing by leaps and bounds. It's just the right opportunity for you, if you are dreaming big.

THE consumer services industry gratifies the consumer's needs by rendering consumer-centric services. There are many segments in this sector which offer low-cost opportunities and high returns to the prospective franchisees such as travel, water purifying, matrimonial, laundry or dry cleaning and car cleaning.

Business potential

Travel industry is segregated into online and offline avenues and the market is glutted with bigwigs like Cox & Kings, Prime Travels, Thomas Cook, East Trip Planners, Raj Travels and Tours, Makemytrip, Club Mahindra Holidays, Travelport, Kuoni, Via and Bharatonline.com. As water crisis and growing water-borne diseases are turning out to be major concerns of tomorrow, water purification business segment is coming to the fore. The water purification industry has players like Eureka Forbes and Kent Ro who are all set to get into franchising and offer after-sales services to consumers. Wedding industry is another burgeoning market. Online players like Bharat Matrimony and Shaadi.com are scaling up their businesses by venturing into offline space through franchising. Dry cleaning sector is transforming with the arrival of organised laundry barons such as Wardrobe, White Tiger, Pressto (Spanish multinational express dry cleaning chain) and Four Seasons Dry Cleaning into the fragmented sector to render their exclusive services to take advantage from this distinctive opportunity. Car cleaning industry is in a nascent stage, as the sector is highly dominated by local car wash garages. Only Carz Spa, based in Bangalore, is there in the car grooming service

Flip side

The travel industry is undergoing many challenges, including presence of unorganised players offering services at cheap fares. Arun Varma, Director, Prime Travels, informs, “Till recently, most of the clients, even when demanding exceptional levels of services, were not willing to pay for them and expected them gratis. Finding trained people to understand the concept of services takes time and unfortunately, there is shortage of qualified people in our industry.” Talking about the challenges in the water purifying industry, Vikas Kapoor, National Business Head, Eureka Forbes Limited, part of the Shapoorji Pallonji Group, feels, “The three biggest challenges in franchising business is having the right kind of feet on street (FOS), deriving right productivity from each of them and lastly, competition from both organised and unorganised players.”

Offering quality cleaning at reasonable prices is one of the major challenges in the dry cleaning industry. Atul Maheshwari, Executive Director, Wardrobe, believes, “Investments in retail space and working capital required is comparatively higher owing to long gestation period. As it is a relationship-based business and takes time to grow, it is important to educate customers regarding the significance of need-based laundry and dry cleaning services.” He says these challenges can be overcome by a mix of right efforts. Low start-up costs and relatively less use of technology and expertise is a threat, as it provides easy entry to mom and pop stores. Retaining trained labour is again a major issue, he adds.

Nilesh Borgharkar, National Sales Head, Shaadi.com, a matrimonial services provider, adds, “Our main challenge is to create a distinct identity for ourselves that will set us apart from a number of other players.”

Franchisability

Franchising along with company-owned store is the right way to grow in India, says Varma. “The market is very large and fragmented and franchising helps us to reach across the towns that we would not have been able to do on our own. The business is highly people and process-driven and relationships play a huge role in business generation.

On maintaining standardisation, Karan Anand, Head, Relationships and Supplier Management, Cox & Kings Ltd, says, “Cox & Kings provides in-depth training to all our franchisees along with a 24x7 call centre for any emergencies. Besides this, we have a pro-active franchisee support team that is dedicated to help the franchise increase sales and profits.”

Expansion

Carz Spa has 30 centres. Anckur N. Sama, Managing Director, Carz Spa, a division of Fortune Multiple Services Pvt. Ltd, informs, “We are looking at 50 centres by end of 2011, mainly across the country. We prefer location near residential area with catchement of middle and upper middle class.” For owning a Carz Spa franchise, the franchisee would require an area of 750-1,000 sq.ft and an investment of Rs 10 lakh.

For opening Kent Ro franchised outlet, Mahesh Gupta, Chairman, KENT RO Systems Ltd, suggests, “The franchisee is required to bear the entire cost of interior designing, the cost is expected to be Rs 1200/- per sq. ft. amounting to around Rs 5 lakh.” Kent RO is planning to open 200 centres all over India. Affirms Maheshwari, “We plan to open 1000 outlets with 60 per cent of them through franchisee route in next 3 years in over 30 cities in India.”  Says Kapoor, “The plan is to have more than 1,000 franchisees across 734 towns of India in the coming five years.

Exit option

The franchisee can easily go for an exit option or can speak directly to the franchisor. Maheshwari discloses, “Franchisee can sell their business after certain lock-in period. Wardrobe provides assistance to them, depending on the reasons to sell and help them find potential buyers through the prospective database.”

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