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Planning 30 Sep 2014

Adding Beauty to Franchisees Platter

Since time immemorial, beauty has played an intrinsic role in an individual’s life. With the present youth increasingly becoming beauty conscious, abundant opportunities have arisen in this sector.

Beauty is just skin deep, but undoubtedly it holds an important place in our minds. It is not just women, but men also want to look at their best today. Considering this increased consciousness lot of Indian and international cosmetic brand are planning rapid expansion and the best way to do it is via franchise route. Let us take a look

Since time immemorial, beauty has played an intrinsic role in an individual’s life. With the present youth increasingly becoming beauty conscious, abundant opportunities have arisen in this sector.

The beauty product business is estimated to be over Rs 3000 crore, which is growing at an average rate of almost 20 per cent annually. According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), it is expected to grow by 36 per cent in the coming years. India, along with China, is one of Asia's largest cosmetics markets. This can be predicted keeping in mind that these days, the Indian consumers do not mind being spendthrift in buying various cosmetic and make-up products.

Shift from unorganised market to organised sector

Few years back, Indian market was flooded with local cosmetic brands that were the cheap imitation of the original products available at some of the exclusive outlets. However, with rising awareness of the benefits of the branded cosmetics, consumers have changed their focus from local to branded products. Moreover, the increasing availability of domestic and international brands at affordable prices has provided an added impetus for consumers to make a shift to branded products. To meet the needs, some of the companies became more accessible to the consumers by taking the franchise route. According to Shahnaz Husain, Founder and Managing Director, Shahnaz Group, “It is said that the average Indian is spending around Rs1,500 per month on personal care products. India is considered to have tremendous growth potential and is one of the largest markets in the world for personal-care products.”

Boosting factors

Increased beauty awareness and personal grooming, along with rising disposable income has helped the cosmetic industry reach to its current stature. Few other factors which have helped the sector to rise are:

Increase in working women: The rapid increase in the number of working women has led to the lift in the usage of these products. Working women can spend a part of their salary on buying beauty products for themselves.

Bollywood effect: Another impetus for this sector is an increased exposure to international splendour, fashion and lifestyle trends on the Indian consumers. Bollywood has been the driving force behind its growth. Actors and actresses are the youth style icons and various companies have roped them in as brand ambassadors to promote their products.

Extension to men: A prominent trend during the last few years has been the steady growth of men’s personal care products business, which includes skin and hair care products.

Innovations and aspirations have led to a rise in the men’s grooming market, which is said to be perched at about Rs 1,000 crore. Though the product range for men is not as elaborate as available for women but it also has its share in it. The men section includes shaving creams, aftershaves, fragrances and products for hair styling and skin care. The latest in the market are face washes and fairness creams.

Key players

The franchising in cosmetics industry is dominated by the key players who have a strong hold in the market. There are a number of players franchising in the cosmetic industry such as Revlon, H2O, L’Occitane, Nature’s Essence, Lotus Herbals, VLCC cosmetic products, The Body Shop, Shahnaz Husain Group, and many more. Shahnaz Husain not only has franchised beauty salons but she has ventured into franchising of the beauty products as well.

Franchising benefits

The cosmetic retailing sector can offer many benefits for aspiring entrepreneurs. These entrepreneurs can enjoy the association with a well recognised and established brand. Moreover, they are provided with an adequate guidance and all necessary guidelines for running a successful business.

Having a franchise outlet of a branded company offers more of leverages as all the cosmetics are tried and tested. Aspiring franchisees, interested in the beauty sector do not have to bother about the quality of products as in the case of unbranded product retailing. Moreover, inexperienced entrepreneurs can also start their successful retail outlet through franchising. As informed by Husain, “Our decision on giving franchise rights is based on stringent selection criteria. There should be a sound financial background. The eligibility of the franchisee is discussed and decided after a personal interview, where several aspects are taken into consideration, like the city / town, training, location, etc. A franchisee can set up a Shahnaz Husain lifestyle shop and sell the Shahnaz Husain products. The shop has to be set up according to a personalised style and décor.” She further shared, “The franchisee or the beauty advisors in the shops have to be specially trained, in order to recommend products to customers, since the products also include therapeutic formulations for specific skin and hair problems.”

Furthermore, the herbal cosmetic products pose good franchising opportunity as the sector is observing worldwide demands for natural products. Looking at the benefits of franchising, new entrants are coming up with their range of products. Husain states, “Herbal beauty business is growing at a faster rate as compared to the chemically made cosmetics. There is a growth of 40 percent.”

Bettys Holistic and Skin Care, herbal cosmetics company has recently ventured into the franchise arena. Betty Nangia, Founder, Bettys Holistic & Skin Care says, “The demand for herbal cosmetic is growing at an amazing rate. Demand is superseding the supply at the moment. From business point of view, it is the right time to capture the market. I believe such huge market can only be tapped through franchising.”

To conclude, it can be aptly said that time is just right to opt for a franchise of a cosmetic brand as the industry has a lot of scope for the aspiring franchisees. Interested entrepreneurs looking for a career in franchising can consider it as a profitable business opportunity. 

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