{"id":4342,"date":"2022-07-24T04:42:00","date_gmt":"2022-07-24T04:42:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=4342"},"modified":"2023-11-19T12:45:11","modified_gmt":"2023-11-19T07:15:11","slug":"beauty-on-demand-ironing-out-the-wrinkles","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/beauty-on-demand-ironing-out-the-wrinkles\/","title":{"rendered":"Beauty on-demand: Ironing out the wrinkles"},"content":{"rendered":"\n

Written By Akanksha Nagar<\/a><\/p>\n\n

Urban Company aims to bring quality, innovation and affordability to the unorganised beauty services market<\/i><\/p>\n

\n

As the pandemic started hammering the business, a sizeable number of beauty professionals who worked at salons jumped onto the up and coming tech-enabled home services marketplaces.<\/p><\/div>\n

\n

The bulk of the Indian beauty services industry remains unorganised and fragmented, dominated by expensive salon brands or small players that offer dubious products, inconsistent service and unsolicited advice. With a push from the pandemic-led restrictions, there has been a sudden rise of a clutch of organised, on-demand players that offer professional beauty care services in situ. Urban Company, for one, has witnessed a big rise in service calls in recent months, driven by rising aspiration levels and disposable income, and the growing demand for standardised and safe in-home services. The segment contributes over 40% of the total revenue for the company already. As per published documents, the firm posted a 13.8% increase in revenue from operations to `239 crore in FY21 compared to `210 crore in FY20.<\/p><\/div><\/div>\n

According to Expert Market Research report, the Indian beauty and personal care industry attained a value of `54,558 crore in 2020, and is set to grow at a CAGR of 11% in the 2022-27 period. Of this, the Indian salon market, which stood at `55,000 crore in FY20, is expected to touch a whopping `2 trillion in FY25, at a CAGR of 28%.<\/p>\n\n

Numbers aside, the spread of the Covid pandemic forced the industry to switch to reverse gear as many salons shut down permanently or closed down unviable outlets just to stay afloat. Enrich Beauty which had salons in cities like Mumbai, Delhi, Bangalore and Ahmedabad, for instance, shut down five salons since 2020, bringing the total count down to 83.<\/p>\n\n

As the pandemic started hammering the business, a sizeable number of beauty professionals who worked at salons jumped onto the up and coming tech-enabled home services marketplaces. Says Anand Ramanathan, partner, Deloitte India, \u201cService aggregator marketplaces have helped increase organisation and bring standardisation in delivery.\u201d It was a win-win for both the customer and the brand. Brands could directly engage with the end consumers and the customer was assured quality\u2014of both the products used and the services rendered.<\/p>\n\n\n

Mukund Kulashekaran, chief business officer, Urban Company, says the fundamental shift in the beauty service market has been in terms of improved quality. As long as the market remained fragmented, there was zero investment in training or upgradation of services, or in product innovation. None of the small regional players really had the wherewithal to take that leap.<\/p>\n\n

Focus on quality<\/b><\/p>\n\n\n

Urban Company devoted a lot of time and attention to training the service providers while also pursuing innovations to raise the standard of the products on offer. While it uses a number of high-end brands, it has also begun to develop its own to make its services more accessible and compete on a larger scale. It operates three levels of salons: the luxury (average ticket size `2,500), the mid-mass premium (`1,200), and the classic, which is at the economy end of the spectrum (`750) and uses proprietary products for the classic and mid-mass premium segments.<\/p>\n\n

Quality is assured by continuous testing and keeping a sharp eye on customer feedback. There is also significant investment in training and automation. It currently has an in-house team of over 200 full-time trainers across 50 cities. It is stepping up investments in technology to both improve product quality and to act promptly on feedback.<\/p>\n\n

The firm had introduced in-home hair and nail services for women amid the pandemic, which, Kulashekaran says, has scaled quite well. Demand for men\u2019s salon services, launched right before the pandemic, has increased from 20,000 transactions pre-pandemic to as high as 150,000 transactions per month. It launched a Skin Clinic for laser and advanced facials in seven cities and has signed on more than two million clients already.<\/p>\n\n

In terms of geographical spread, while the top ten cities account for more than 80% of its revenue, non-metros are rising fast in terms of revenue share.<\/p>\n\n

Long haul<\/b><\/p>\n\n\n

The company prioritises brand-related communication rather than performance-related. The focus is more on the video medium than the click-through media. So the focus area is TV, but YouTube in case of a targeted campaign.<\/p>\n\n\n

In the next stage of expansion its communication strategy will be key. Jagdeep Kapoor, founder, chairman and MD, Samsika Marketing Consultants, says that while expanding beyond metros the brand has to be less urban in terms of perception and imagery and take into account the culture and taboos, and the differing definition of beauty.<\/p>\n\n

Samit Sinha, managing partner, Alchemist Brand Consulting, says to keep up the pace of growth the brand has to invest in its service providers, and not just its customers. This is a business model that will not be difficult to replicate. The trick will be to incentivise the beauty care technicians so that they are able to offer high-quality services to the customer and have little reason to join a rival brand. The thing to remember: Like most other service businesses, beauticians too can bypass the company and establish direct relationships with customers \u2014 a phenomenon that has plagued the ride hailing and ride share services in India.<\/p>\n\n

BOX: Staying on track (Insights from Devangshu Dutta, CEO, Third Eyesight)<\/b><\/p>\n

Three factors that will determine success\n

• The customer sees the aggregation platform as the \u201cprovider\u201d of service, rather than a listing agency. So the company needs to totally own the customer experience, end-to-end.\n

• Ensuring quality of service consistently is the biggest enabler for growth.\n

• Over time, UC has moved to this \u201cownership\u201d of the experience, which does mean additional investment, but also pays off in the end.<\/b><\/p>\n\n

Three factors that might undo the good work:

\n

• If it doesn\u2019t keep working on customer experience ownership, it could slip<\/p>\n

• Margins\/commissions need to be reasonable, otherwise, service professionals may abandon the platform<\/p>\n

• Given the high customer acquisition costs, it has to drive repeats rather than one-time or low-frequency purchases.<\/b><\/p>\n\n

Source: financialexpress<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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