Page 27 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes 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.
Marketing strategies: The newest stalls in 10 branches of Shopper’s Stops around the
country are temporary salons being set up by top-selling shampoo Sunsilk, a product of
Lakme Lever. Hair stylists like Jawed Habib demonstrate their skills. The aim to boost
awareness in the run-up to the Miss World pageant where Sunsilk was the official sponsor
of the beauty show.

Hindustan Lever, which makes Sunsilk, insists that the salons are only a temporary affair
but it believes they can give tremendous publicity mileage. And it is only following in the
footsteps of other fast moving consumer goods companies – like CavinKare, L’Oreal,
Marico and Wella – which are opening exclusive salons and clinics in a bid to reach out to
end users.
Lakme has had four salons for the past 25 years. In the last 18 months it had gone
into overdrive and opened 42 outlets in different parts of the country. And there is no
stopping – it plans 200 salons by the next two years.
Why are corporate houses on a beauty binge? For years now, companies which had a
range of personal care products have been hard-selling their products to hairdressers and
beauty salons. Now, some are looking at forward integration and getting into the beauty
business themselves. Arvind Mahajan, partner at IBM Business Consulting Services says,
“A lot of value is shifting to services. In that context, it helps them maintain a relationship
with customers and capture value downstream.” Adds Harsh Mariwala, chairman and
managing director of the ` 696-crore Marico Industries: “It is one way of going up the
value chain.”
So let’s look at the industry makeover that is taking place. In August, for the first time
since French cosmetic major L’Oreal entered India a decade ago, it has collaborated with
entrepreneurs to set up an upscale salon – HFX (Hair effects). New business opportunities
for Marico imply setting up Kaya skincare clinics, currently being test-marketed in Mumbai.
CavinKare has a range of salons targeting different wallet sizes. And Wella began this year
tying up with 30 outlets that have been rebranded as Esteem parlours. Similarly, Godrej
Consumer Products, which makes ColourSoft hair colours, has toyed with the idea of
sprucing up in salons. It seems to have abandoned these plans for the moment.
These ambitions are also driven by the fact that tough economic conditions have put
profitability under pressure for many companies. And the growth potential in the service
industry is tremendous. Even though there are no audited numbers, players peg the salon
business at around ` 800 crore (` 8 billion) and say that it is growing at 25 per cent. What’s
more, it is largely unorganised. But with brand awareness and higher purchasing power,
corporates hope to change the complexion of the game.

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