Beauty salons are big business

Three years ago, Deepa Apte used to drop in at a beauty salon once a fortnight or once in three weeks. Apte, 26, a sales executive at a leading company here, says she does so regularly now because it's important to look good.

Hundreds of others like Apte are visiting beauty salons pretty frequently - and business is booming. Lending credence to this, virtually every big company that has a presence in the salon business is on an expansion drive.

Hindustan Lever Ltd, the country's largest consumer goods company, is looking at doubling the number of its Lakme Beauty Salons in a year, from the current 60.

Baccarose, the company that distributes and markets premium lifestyle brands like Elizabeth Arden, Escade, Nina Ricci and Siedo, is planning to open Clarins beauty studios in Bangalore, Delhi and Chennai over the next two years. At present it has only one studio in Mumbai.

Meanwhile, several companies that run beauty salons are setting up training institutes. HLL is setting up a Lakme Beauty Training academy in Mumbai, Chennai and New Delhi.

L'Oreal Professional, a division of L'Oreal, has invested in four technical centres (in Mumbai, Delhi, Kolkata and Bangalore). Schwarzkopf Professional, a division of Henkel Spic, has a training academy in Delhi.

"Beauticians trained by the academy will get absorbed both in Lakme beauty salons and in the industry in general," a Lever spokesman says, explaining: "The future growth of the industry will require more trained beauticians." Agrees Shekhar Sethu, general manager at Schwarzkopf Professional: "Technical and service standards have been improving rapidly with companies investing in technical education."

If the big boys are expanding, it's because business is growing at impressive rates. Lakme's beauty salons in Mumbai clocked 28 per cent growth in revenue, 21 per cent growth in Chennai and a hefty 60 per cent or so growth rate in Bangalore.

The Marico Industries-promoted Kaya Skin Clinic (which the company says is a skin treatment business) started in the third quarter of 2002-2003, but now has over 10 clinics in India and abroad. Kaya's turnover crossed Rs 1 crore (Rs 10 million) during the third quarter of 2003-2004. The clinics have started breaking even.

Furthermore, companies like Henkel, L'Oreal and Wella, the German hair care company, are seeing the offtake of their products from beauty salons climb. According to industry sources, the salons generate over Rs 200 crore (Rs 2 billion) in product sales.

The statistics tell a fuller story. According to ValueNotes Database, the Pune-based research firm, India has over 61,000 beauty salons in towns that have a population of over one million.

The beauty salon industry's estimated turnover is over Rs 2,000 crore (Rs 20 billion), with the metros accounting for about 60 per cent of this. The large beauty salons take up over 27 per cent of the revenue in the towns.

So why is the beauty salon business booming? Explains Dipali Prasad, brand manager, retail, House of Baccarose: "As 'feel good' is becoming very important in today's high stress urban environment, beauty treatments at salons, gyms, massages, the spa experience and so on have become a part of people's lifestyles. Owing to the increasing demand the salon segment is experiencing a high growth rate. Salons are coming out of their 5-star environment and making an appearance in stand-alone formats."

The business itself is rapidly changing. A few years ago, beauty salons used to offer regular services (waxing, threading, bleaching, facials). Now they offer specialised services like visible radiance lightening facials, intense glow facials, skin toning facials, hair reviving, hair revitalising and scalp conditioning programmes, among other things.

Strikingly too, men are flocking to beauty salons in ever increasing numbers. Says Vismay Sharma, director, L'Oreal Professional India: "Men are getting more and more enthusiastic about beauty services. Business in men's' salons is growing slightly faster than in women's salons as men are getting more conscious about their looks." Adds Prasad: "Men comprise 25-30 per cent of the customers at the Clarins beauty studios."

Sums up a consultant at Jacques Dessang, the Paris-based unisex beauty salon that fashion house Ravissant introduced into India and which has a presence at Mumbai's Taj Mahal Hotel: "The image of the beauty salon has changed. It is now known for its infrastructure, ambience and service. Consumers today are willing to pay much more for a better experience." No doubt, HLL and Baccarose will bear testimony to that.