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Jul, 10 2012

Bountiful benefits in health & beauty biz

The salon industry has doubled in the last five years, and the steep growth in health and wellness sectors has also given a room to franchisors for extensive network growth. Growth, profits and brand recognition are all results of expanding via the franc

THE franchise 'facial' has proved to be really beneficial for the health and wellness, and beauty industries as there is an instant glow over these industries in terms of growth and business. Leading the pack is still the salon industry. The health sector, wellness sector and other beauty businesses are all picking up pace. Franchising in the beauty industry started a long time back. But now with the increasing demand, it has become the backbone of the health and wellness, and beauty industries.

According to a recent FICCI-PwC study, the wellness market in India is about Rs 490 billion and wellness services account for 40% of this market. However, it is still less than two per cent of the global wellness industry. Of the Rs 40 billion fitness and slimming market, services (fitness and slimming centres) account for over 65% of the market.

As franchising is the preferred business expansion model adopted by a majority of players because of its exclusive features which drive growth, a trade-off exists between rapid scale-up and the risk of diluting brand equity. Besides, it helps the franchisor gain access to local market knowledge and also the talent pool that exists there. The salon industry has doubled in the last five years, and the steep growth in the health and wellness sector has also given a room to franchisors for extensive network growth. As the market is progressing towards organised formats, the health, beauty and wellness industries are taking up franchising as a mode of expansion into both the existing as well as the untapped markets. According to an expert, the beauty sector right now has the potential for 5,000 more franchised salons from the organised sector. It is estimated that from 18 per cent franchised salons today, franchising in salons will grow to 20 per cent of the organised sector by 2015 and will become a staggering Rs 4,500 crore salon franchising industry by 2020.

In the articles we have done in the following pages, we have covered minute details of each business opportunity across health, beauty and wellness sectors with precision to make it easier for the investor to cherry pick the business one wishes to invest in. We have also mentioned in detail about the investment break for an investor to set up a salon, spa or a healthcare centre.

After talking to hundreds of brands we noticed that an opportunity is being created both by changes in the healthcare industry itself and with changes in consumer beliefs about well-being, and the result is a rise in spending on healthcare, beauty products and services of all kinds. Entrepreneurs are recognising the shift towards a more modern and holistic healthcare industry, and profitable franchise opportunities have emerged to cover every angle to which they are responding by finding better solutions to old problems and by launching new businesses to meet the needs of a young and increasingly health-conscious population. ???, Birla Kerala Vaidyashala (BKV), who runs a chain of day care ayurvedic treatment centres through the franchise route says: “Franchisees have the opportunity to run ayurvedic day care treatment centres under the BKV brand via the FoFo model. The initial investment is in the range of 15-30 lakh.”

Another sector which is witnessing a tremendous growth is the spa industry. Beauty salons and spa formats have witnessed maximum rigour as far as franchising is concerned. According to a recent research report, the Indian spa industry is growing at the rate of about 20-30 per cent annually. In five years, it has shown a tremendous growth in terms of numbers, varieties and specialities. Presently, 60-70 per cent of the business models are nationally-based brands. Not only this, the market is also attracting foreign beauty and spa players from Asian countries, such as Malaysia, Thailand, etc., via the franchise business model. A study undertaken by the Federation of Indian Chambers of Commerce and Industry suggests that the wellness industry in the country is growing at close to 20 per cent annually and currently it stands at Rs 1,500 crore.

After talking about apt business beauty packages across health and beauty sectors, we have in store for our readers a special section on “Dealer and Distributorship”through which potential dealers and distributors of beauty products can associate with renowned international and national brands.

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