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Sep, 10 2012

A rich triad: WOMEN, BEAUTY & WELLNESS

Like other aspiring womenpreneurs, if you also have a passion for beauty or wellness, hop on to the beauty and wellness sector as it has witnessed a growth hard to ignore, and that too at a good pace, throughout half a decade. Also, find out why franchiso

ARE you looking forward to cashing in on a business that has the ability to drive huge profits? The one sector that can never be afflicted with slackening demand is the business of beauty, wellness and fitness, that's offering an exhilarating business opportunity to women franchisees passionate about doing business in the beauty sector.

As time goes by, one can compromise on anything but beauty, as when it comes to enhancing one's looks no one shies away from splurging on it. After education, India's beauty, wellness and fitness sector is much sought after and reckoned to be the second most preferred business choice of womenpreneurs who are scouting to invest in businesses that are not only low-cost but are also recession resistant. As Indian consumers are turning out to be more beauty conscious and embarking on various fitness regimes, the industry of beauty, fitness and wellness is getting not only trendy but also becoming a profitable business boulevard for making safer investments.

Thanks to the promotional activities of brands through print media and e-commerce sites, the availability of services at reasonable prices and the franchise model have brought the growth back on charts allowing established as well as new players to reach beyond their defined boundaries. Other factors that have triggered the industry's growth include increasing urbanisation, rising middle class incomes, focus on preventive care, dynamic changes in awareness levels, readiness to invest in beauty services and varying consumer lifestyle. That's truly making the business of beauty and wellness more exciting for women franchisees as compared with any other business.

The sector of beauty, fitness and wellness is currently doing a roaring business among its various segments, as slimming or fitness centres, salons, spas and wellness chains are springing up all over. Currently, Birla wellness & Healthcare Pvt Lt, Lakme, Jawed Habib Hair & Beauty Salon, IOSIS Media Spa, Blossom Kochhar, VLCC, Tress Lounge, Vivafit, b:blunt, Contours International, Looks Beauty Salon, Leena Mogre, Naturals and many more brands are gearing up to establish their nationwide footprints through the franchise route.

Market potential

According to a recent FICCI-PwC study, the wellness market in India is about Rs 490 billion and wellness services account for 40% of the 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. The alternative therapy market is estimated to be Rs 110-120 billion. Currently, the Indian beauty products and services industry is pegged at Rs 13,200 crore. As of now, the salon industry is largely unorganised and is expected to grow at an average rate of 30 per cent over the next decade.

Franchising, the hottest pick

Franchising has made it possible to fulfil almost every franchisor's dream of reaching out to the masses. As the overall beauty, fitness and wellness industry is moving towards the next level by launching organised formats and newer concepts, the industry's big-shots are ready to diversify into other lucrative segments to make the most of them.

Besides reaching out via franchising, franchisors are also making effective use of franchisee's knowledge about the market and related trends; they are expanding to unknown territories to make a stronger position and thereby catching the consumer's attention. On targeting women franchisees, Shahnaz Husain, Chairperson & Managing Director, The Shahnaz Husain Group of Companies, says: “We actually started franchising by encouraging ordinary housewives to open salons in their own homes. Today, most of our franchisees are women. Yes, we would like to add more women franchisees.” She adds: “The franchise route has helped us to establish ayurvedic beauty care and take the Indian herbal heritage to every corner of the globe. It has also helped us to promote our concept of herbal beauty care and cures as well as the specialised treatments, for which we have become renowned worldwide.”

On his take on tapping franchise partners, Rohit Arora, Executive Director, Jawed Habib Hair & Beauty Salon Ltd, says: “Our franchise business model is for everyone; all you need is passion and drive. Currently, we have a good mix of franchisees of both genders. It does not matter who owns or runs a franchise, since our salons are unisex. However, there are special government schemes for assisting women in funding our franchise model.” Talking about the gender ratio of franchisees they own, Rohit says: “Ratio can't be defined, as even if our franchise model is owned by male entrepreneurs, they are mostly run by women, either as partners or centre managers.”

Training & support

However, franchising is not every investor's cup of tea. The one who ventures into the franchise business has to follow certain guidelines provided by the franchisor. To evade any brand inconsistency, especially at the franchise premises, franchisors make it mandatory for franchisees to run their brand's store premises according to the standard operating procedures (SOPs).

With regard to providing support to franchisees, Nelabhotla Venkateswarlu, Managing Director and CEO, Birla Wellness & Healthcare Pvt Ltd, says: “We have SOPs on various facets of running the centre and we provide regular training programmes to our franchisees. The company does regular audits to ensure system and quality standards are maintained.” Birla Kerala Vaidyashala (BKV) offers to its franchisees the opportunity to run ayurvedic day care treatment centres under the franchisee-owned, franchisee-operated (FoFo) model. “Our franchisees, along with their business partners, centre managers and counsellors, are trained to be proficient in all aspects of salon management,” says Rohit.

Turning hurdles into opportunity

Just like every industry, the beauty and wellness industry too goes through its share of challenges. As it's mainly a service-based business, finding skilled professionals and recruiting them is a key challenge for most of the franchisors. Says Venkat: “Difficulty in scaling up rapidly and uncertain regulatory framework are major concerns facing the wellness industry. We are expanding BKV, which is a chain of day care ayurvedic treatment centres, through franchise route.”

Doubling the brand's network

As of today, Jawed Habibs' Hair and Beauty Salon is operating 322 outlets across all formats pan-India. On extending their brand's portfolio, Rohit says: “Our business model is a scalable one and hence generates a good amount of interest among prospective franchisees. We would like to populate tier II and III cities primarily, along with the metros.” Birla Kerala Vaidyashala is currently operating 14 company-owned and 13 franchise stores. In terms of spreading their reach, the brand is mainly looking for new franchisees under the FoFo model and is targeting 10 centres, in addition to the current 27 centres in Mumbai, Bengaluru, Pune, Chennai and Kerala. Regarding scaling up their brand to the next level, Shahnaz Husain is quite aggressively pursuing it for her brand's network across the globe. “We will be increasing our footprints across the globe and see to it that ayurvedic beauty care rules the international market trends. We also intend to extend our salons, beauty academies and shops in India, including in small cities and towns. We will extend our ventures through the franchise system,” adds Husain.

The road ahead!

India's beauty, wellness and fitness industry is set to take off to a new level, as many established beauty salons, spas and fitness chains have joined the unisex bandwagon to target more consumer footfalls and become the beneficiaries of more profits. Diversification into other segments and consolidation of existing stores is another strategy that brands have begun to act on. Besides this, the industry's colossal size has a great growth potential that can be easily tapped, and tier II and III cities have already experienced a sudden surge, with the opening of beauty salons, wellness and fitness centres, in every nook and cranny. By maintaining consistency in offering manifold services all under one roof, the industry is becoming more mature, and that's the differentiating factor between the organised and unorganised sector. By the look of things, the beauty and wellness sector is the next target business option offering safer opportunity to housewives and working women.

Company Investment Area Break-even

(in lakh) (sq ft)

Birla Kerala Vaidyashala Rs 15-30 800-2,000 18 months

Shahnaz Husain Rs 20-30 1,500-2,500 2 years

Jawed Habib Rs 10-18 100-500 3-4 months

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