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Spa 27 Sep 2014

Spa industry: A storehouse of opportunities

Being a storehouse of opportunities, the spa industry is attracting a lot of entrepreneurs. They are now betting on this business and making profits.

Being a storehouse of opportunities, the spa industry is attracting a lot of entrepreneurs. They are now betting on this business and making profits.

 

The days are gone when spas were limited to the big cities only. Today, they have crossed the nascent stage and connected to the adjacent industries like Ayurveda, healthcare, tourism, retail and hospitality. The sector is presenting a number of opportunities for entrepreneurs who want to grow swiftly by providing relaxation and rejuvenation therapies for customers.

 

A Growing Market

 

As per the report by FICCI and PricewaterhouseCoopers, the wellness industry is at Rs 49,000-crore mark in India. The Global Summit released the figures about the Indian spa industry, which says, “The spa segment is around Rs 11,000 crore and will grow at the rate of 20 per cent in the coming years. In India, there are more than 2,300 spas that generate around $400 million annual revenue. The report predicts that in coming years, there will over 700 new spas in India. To organise this sector, Spa Association of India is putting in all its efforts. Rajesh Sharma, Founder & President, Spa Association of India, says, “We are working for the development of the spa industry in India. We use resources for the development of industry and professionals.”

 

Many local and international players have already become popular in this segment and gaining huge profit. Few of them like Iosis Medi Spa, Aura Thai Spa, Tuscany Spa, The Four Fountains Spa, Mystic Spa, Body Spa, Aroma Thai Foot Spa, Zazen Spa, The Palms Spa, Tatha, Uni Spa, Deep Ayurveda, Spalon, Kaasha, The Thai Spa and many more have followed the franchise model for the expansion of their network.

 

Growth Factors

 

Spending power of Indian households has increased in the past few years. They are comfortable with spending extra money on beauty and wellness services. With the global and media exposure, for many youngsters today looking good equals feeling good. So they equally prefer spa therapies for feeling good. The other key factors that have contributed to the growth of Indian spa industry are:

 

Rise in Stress Levels: The fact that the stress levels in urban India are increasing every day.

 

Customer Education: The education level about spa therapies increases with the efforts of spa firms as Four Fountains spa spends a considerable amount of time and effort in helping customers understand the benefits of massages and spa services. Anurag Kedia, Co-founder, Four Fountain Spa, says, “This lead to a change in the perception about spas from being a place of pampering to a place of wellness and healing.”

 

Right Pricing: Spas are now available at different price points. Market players are positioning themselves at affordable prices and offering services to attract a large segment of non users.

 

Media Engagement: The media attention on spas has been unusually high in the past few years, and this has led to generate a lot of consumer awareness about spas.

 

There are several macro and micro trends that are offering potential opportunities for entrepreneurs. Especially, the influence of western culture with the IT industry boom has increased the awareness of heath and luxurious living. Teens, young and old people – all are giving more attention to their looks, and it has become prime factor in both personnel and business growth. Some of the key trends are highlighted below:

 

• An equal mix of services for men and women customers.

• People are willing to spend more on beauty and luxury products.

• Teenagers are come out to try relaxing services.

• Men are taking up beauty services apart from therapies for de-stressing and relaxation.

• Corporate houses are encouraging employees to use spas.

• Mobile spas are becoming popular for parties, events and other occasions.

• Spa vouchers have emerged as a preferred gifting option.

• Rise in demand for day spas.

 

First Step of Entrepreneurship

 

Today, wellness is becoming a part of life in India and anywhere in the world. Anurag Kedia, Saurabh and Sunil were employed with MNCs and were in fairly stressful jobs. However, despite being getting well-paid, they could not afford a relaxing massage at the hotel spas due to the exorbitant prices. Kedia says, “During our visits, we realised that for stress-free India, spa therapies should be made more affordable. That common thought inspired us to launch the Four Fountain Spa in 2007. We started to work on an ‘affordable spa chain’ to put spas within the reach of different sections of Indian society.” For Rawal, his visit to a spa in Singapore had inspired him to start Zazen Spa in India. He shares, “After the study of this industry, we launched our first two day spas at the same day in Pune in 2011. Since then, we are opening an outlet within six months and now we are there in Pune and Mumbai with three and two outlets respectively.” But for Dr Baldeep Kour, Chief Medical Director, Deep Ayurveda, the launch of Deep Ayurveda was a mission of creating a happier and healthier society by reviving the Vedic Indian sciences through the use of traditional Ayurveda science. She uses authentic Ayurveda and Panchkarma Therapy for the treatment of chronic disease. She offers all panchkarma therapies like vaman, virechan, vasti, netra vasti, nasya, ayurvedic massage, potli massage, steam bath, beauty and spa services and all other Keralite therapies through well expert Panchkarma Therapist under the guidance of Ayurveda and Panchkarma specialist doctors.

  

New Practices

 

Body scrubbing, Kerala massages and body wraps are becoming popular. There are many practices that are inspired from the western traditions and mixed with Indian therapies. Serena Spa has also started a new concept of stand-alone urban spas with the first one opening in Powai, Mumbai. Today, every standardised hotel have spa services centre. Destinations spas have already come a long way as Dr Manish Patwardhan, Founder, CEO, Spa Consultants, says, “Small spas services like foot spa is becoming popular. Consumers prefer to avail international services nearby their residences. So the trend of having spas within residential projects and clubs is popping up in India.”

 

Expansion via Franchising

As the spa industry is covering different aspects of wellness and health sector, franchising is emerging as a popular option for entrepreneurs. It is the most preferable way for budding entrepreneurs to reach their consumers. Big players are also looking for their expansion via franchising route and propose business opportunities for burgeoning entrepreneurs. Since the time Four Fountain Spas was launched, a conscious decision was made to expand through franchise business model. Kedia says, “When we launched our first spa, we realised that franchise business model was the best option to expand further as the franchisees would bring in their money, time and passion into the business. Moreover, this business model helped us expand at a much faster rate than other options.” Kedia also says that they are planning to launch 300 spas by 2016 across the top 50 towns (including Tier I and II cities) across India. A majority of these spas will be franchised while a few might be company-owned. Explaining about the advantages of franchisees business model, Darshan Rawal, Director, Zazen Spa, says, “The lack of skilled labour to perform the therapies and manage each outlet created a need to tie up with like-minded people who had a keen desire to be a part of the service industry. So we started looking for potential people who could replicate the same under our guidance.”

 

Similarly, a Dubai-based spa and wellness brand Aura Thai Spa has made an entry into the Indian market by appointed its master franchise in different states across India. It is ready to open a massive network of 300 spas by 2015 worldwide. Another international player Serena Spa has succeeded to build a strong niche of hotel and resort spa expertise and expects to expand both in India and abroad. In the same way, Iosis Medi Spa a famous spa chain by Shilpa Shetty Kundra is all set to strengthen its franchise network. The budding Kaasha spa is also looking for potential franchisees to expand its network. Vallari Shah, Founder, Kaasha Spa, says, “The great responses from our customers for balinese from Bali, Hawaiian gea therapy from Hawaii and morrocan from Turkey made us to extend our services. We found franchising a good model for further expansion through which we could add a number of centres in our network and reach more customers.” Whereas Sabrina FB Hougaard, Operational Director, Aristo Spa, Grand Mercure Hotel, Bengaluru, says, “This year, we will open four new spas under both Serena Spa and Aristo Spa brands in India in various luxury hotels and resorts.”

 

Watch Out for Challenges

 

Entrepreneurs must understand that this business can offers a minimum of 30 per cent returns only if the business is well understood and personal attention is given. Highlighting the factors that resist the growth of spa industry Patwardhan says, “The sector is unorganised and lack of Industry status, registration and licensing, and trained manpower.”So entrepreneurs need to consider the following factors:

 

- Proper training curriculum of the manpower

- Licensing of the spas and registration of the spas

- Industry status to spa business

 

Including all these challenges, Sabrina says, “The main hurdle is the lack of training so even before one can start the operation a major expense is training of spa therapists, spa attendants and spa managers. But many choose not to spend on trained staff, so most such spas do not survive for long, even while promoting low price offers.”

 

The Future Ahead

 

Entrepreneurs can make big in fusion spas, including both Indian and western therapies. They can opt for Thai and Swedish massage therapies, which are popular massages and can be rendered by any proper trained therapists. In the coming years, many other revolutions would happen to make the segment more lucrative and profit making. So, if you want to be in spa business this is the right time to be in it.

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