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Oct, 12 2010

Wealth in Wellness

THERE has been a distinct shift from beauty salons to spas that offer holistic experience to consumers. With the high level of interest and more awareness, the market right now is in the transitional phase, from being fragmented to organised.

THERE has been a distinct shift from beauty salons to spas that offer holistic experience to consumers. With the high level of interest and more awareness, the market right now is in the transitional phase, from being fragmented to organised. The task of organising this sector has been taken up by the organised international players so that more and more quality services and products can reach discerning consumers. As per industry sources, around 70 per cent of the spa business in India is run by local brands, while the rest is with the international firms. Given its growth, the Indian wellness industry has witnessed influx of several international spa brands. Spa L'Occitane has already ventured into the Indian market in partnership with Devi Resorts and Sanghvi Brands has been given the master franchise to operate the spas by L'Occitane in India.

Guillaume Geslin, General Manager, L'Occitane India, states, “India is the perfect destination to open spas because Indians are very familiar with products using essentials oils and also like to be pampered. Therefore, we intend to open spas in unique locations with partners who share the same values as us.” Informs Darpan Sanghvi, Managing Director, Sanghvi Brands, “L'Occitane is one of the strongest brands in the world in beauty and well being with presence in 100 countries. They offer a fantastic spa experience through their 1,500 stores worldwide and over 3 million VIP customers. There is no other spa company that can give a similar offering and brand recall.”

Christened Devi Spa by L'Occitane, the spa will premier in Devi Garh Palace, Udaipur, and two upcoming properties of Devi Resorts in Jaipur, The Devi Ratn and The Rasa. These will be operational in October this year.

Another brand excited at the prospect is Woodhouse Day Spa, US, which is all set to foray in India in October. Jeni Garrett, its CEO, says, “Recent data has shown that thousands of new spas are likely to establish themselves in India in the next five to 10 years. We see enormous potential for the country's growing spa market. The Woodhouse Day Spa is primed for this arena because there's a lack of US brands in wellness in India.  Presently, there are a lot of destination spas but not day spas, which is our niche.”

Cashing in on the untapped potential, several international spa brands like the Chivalai Thai Spa and XpressSpa are looking forward to foray into the Indian market. Besides, Spaso Zen Spa is also looking forward to making a debut in India in January 2011. Confirming this, Sonia Gomes, CEO, Spaso Zen, stated, “We have almost finished a deal with our master franchise in India. Our priority will be Mumbai, New Delhi and Bangalore.”

Extending the experience

There has been more than one factor that is prompting international spa brands to penetrate the Indian wellness industry. The wellness segment has rolled out a plethora of business opportunities through the franchising route and these brands have already outlined a well charted expansion plan in India. Defining the benefits of franchising, Garrett explains, “We are taking our unique wellness service to new heights by franchising in an ever growing market that is already educated in the industry. We've been watching the spa market for the past five years and noticed that their potential for growth and opportunities for franchising is second to none in India, specifically in the wellness industry.

Sanghvi says, “Franchising in the wellness industry is probably the most nascent of all industries in India. This is the reason why Sanghvi Brands was set up to create India's first and most comprehensive portfolio of international wellness brands.”

The company sources have confirmed that they would open up eight L'Occitane Spas in India in the next 24 to 36 months. The geographic spread would be a healthy mix of tourist destinations such as Rajasthan, Kerala, Goa and metros such as New Delhi, Mumbai and Bengaluru. “We anticipate having standalone L'Occitane Day Spas in metros such as New Delhi, Mumbai and Bengaluru and spas by L'Occitane in luxury hotels in the tourist/resort destinations in India,” adds Sanghvi.

The Woodhouse Day Spa is on a hunt for franchisees. Says Garrett, “We are going across the country in India and looking for franchise partners throughout several regions of India.”

The spas that are there in the Indian market and those willing to make a mark are already expecting to reap rich dividends via the franchising route.

While Sanghvi anticipates annual turnover between $6 million to $8 million within the next 36 months, Garrett has pinned her hopes for a swift break even from the Indian market. “We're expecting to break even, this time faster in India than we did in the US, though our projected revenue and RoI in India is higher than what we've seen domestically,” she elucidates.

Growth amidst challenges

The lack of trained workforce, stigma attached to the profession, narrow base of equipment suppliers, lack of exposure to spa operations of international standards and the fact that India has not been positioned as a wellness destination have been some major bottlenecks for the beauty and wellness industry.

Sanghvi explains, “For a luxury brand like L'Occitane, it is very important that each spa is a visual spectacle. Finding good real estate (which provides that visual spectacle) at a price that makes sense is a challenge. Secondly, there is the problem of limited number of institutes providing qualified therapists and the high attrition rate amongst the limited therapists. And finally, the high import duties on the product consumed in the treatments puts a severe drain on the margins.”

Looking at the shortage of qualified therapists, these international spa brands will be providing world-class training facilities to their staff. Explains Sanghvi, “The entire training for the spa staff in India comes from the L'Occitane team in Hong Kong and Paris. Besides initial set up and training for each spa, team members from Hong Kong will be coming in regularly all year round for refresher courses and audits. In addition to the training and audits from Hong Kong and Paris, we have an internal team set up in India which also conducts internal training checks and audits every month.”

Garrett states, “The training is similar to our US training. There are three phases, the initial is a webinar introducing the Woodhouse Day Spa brand and culture, training is then held at the headquarters in Ludhiana, then an internship in Ludhiana. The last step is onsite training at their spa for the staff. Our training and support is much customised and has proven successful in the US.”

However, these limitations could be turned into opportunities as the market has huge potential and consumers are ready to be a part of this growth story.

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