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Makeover of India’s grooming industry

The grooming industry in India is getting a welcome makeover. A couple of years ago, if a man wanted a haircut, he would go to the local barber shop and women who wanted their tresses snipped or eyebrows done, would head to a nearby beauty parlour. The beauty parlour would be ladies only and would also be run by women. But the rise of unisex salons is changing the scenario.

Industry professionals are changing from traditional barber shops to unisex salons which offer better services and have a vibrant interior. Men account for more than 35% of footfall in unisex salons and generate 40% of the revenues. The Mumbai based salon chain, Enrich, expects sales of Rs.55 crore in the financial year and also intends to take the salon count from 28 to 40 by next year. Established chains are also hopping on the unisex bandwagon. Brands like Lakme Level already have 170 salons across the nation and it launched the first unisex salon in July 2011. Men are now going beyond haircuts and getting themselves pedicures, facials and manicures.

In the older days, a salon would take 12 months in order to break even. Now it only takes four months for the same. A recent report by PwC and the Federation of Indian Chambers of Commerce and Industry pegged the size of salon business at Rs.7,000 crore. The industry could double in size in the next three years. The chains use franchising as an option to scale up or move to the Tier-II and Tier-III towns. Small town India has a huge potential for salon chains but some like B: Blunt, are sticking only to big cities. Going beyond big cities might mean lowering the prices which they are not willing to do. B:Blunt has two formats, the flagship where haircut costs between Rs.850 to Rs.4000 and a B:Blunt mini where the charges are halved.

Besides Indian salon chains, global ones like Toni&Guy and Saks are also making a strong presence felt. While demand is not a problem in India, what could stand in the way of salon chains is the lack of skilled stylists. To deal with this, they have their own academies whose graduates earn salaries of Rs.10,000 to Rs.20,000 a month in addition to the tips and commission. The growth of a salon chain is not possible without skilled stylists. Even companies like L’Oreal play a significant role in skill development. They train the staff on using the products before supplying the same to them.

Another hurdle for salon chains is the financing. Funding through internal accruals is not ideal for rapid growth. In 2010, Enrich raised $10 million from JM Financial India Fund. There are various investors who are taking interest in investing into the grooming industry. It will be interesting to see how the entrepreneurs take up their salon chains to a whole new level. Remarkably, the growth of this industry is something nobody doubts.

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