It is the newest stall in Shopper's Stops around the country. For the next two weeks hair stylists like Jawed Habib will be demonstrating their skills in temporary salons that are being set up in 10 branches of Shopper's Stop by top-selling shampoo Sunsilk.
The aim: to boost awareness in the run-up to the Miss World pageant later this month. Sunsilk is 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.
Take a look at HLL's cosmetic arm Lakme which has had four salons for the past 25 years. In the last 18 months it has gone into overdrive and opened 42 outlets in different parts of the country. And it isn't stopping there -- it plans 200 salons by the next two years.
Why are corporates on a beauty binge? For years now, companies which had a range of personal care products have been hardselling their products to hairdressers and beauty salons. Now, some are looking at forward integration and getting into the beauty business themselves.
Says Arvind Mahajan, partner at IBM Business Consulting Services, "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 Rs 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 means 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 a salon. 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 Rs 800 crore (Rs 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.
Just look at the margins in the business. "It is like drinking coffee at home and having it at Barista," says D Shivakumar, business head, haircare at HLL.
While margins in the traditional FMCG business hover in the 8 per cent to 15 per cent band for most companies, the sky is the limit for salons.
For instance, a box of good hair colour retails at around Rs 350. Go in for a cut, wash and colouring, and you shell out anything from Rs 1,500 to Rs 3,000. "It's all in the nature of services offered," says a marketer.
Also, consumer brand loyalty, say companies, is much more for services than products. In an age, where brands of all hues are fighting for shelf space, affiliated salons become an ideal channel to route your products through.
That's why Lakme is trying to make its presence heavily felt in the marketplace. "There are points of time when consumer habits and lifestyles are changing, so you look at opportunities to grow your existing business," says Anil Chopra, managing director of Lakme Lever.
So while Lakme salons not only stock a range of products that go under its brand name, it also showcases part of the HLL portfolio.
In fact, it is this lifestyle change and the need to 'look good,' that has motivated Chennai-based CavinKare Ltd to set up a group company -- Trends in Vogue.
The company is opening three separate chains, catering to assorted wallet sizes, that are all targeted at 20 to 35 year olds. At the lower end is Fyne Cut, a budget salon for men. Positioned as an 'amazing value for money' offering, it competes with the friendly neighbourhood barber.
Green Trends will have a range of men's and women's salons aimed at the middle class.
The recently launched Limelite is the premium brand targeting upper crust men, women and kids. To ensure that it offers 'an international standard beauty care', CavinKare has tied up with German hair major Wella of Germany and Beaubelle of Switzerland.
Says Sanjay Gupta, general manager, Trends in Vogue, "We realised that there was a need gap in the grooming industry. We use various brands of products at these salons, including those that do not belong to us. The objective is to give the consumer a service suitable for him."
That's why, even HLL is bonding with consumers through the Sunsilk salons. "The objective is to build the event and the association of giving customised answers to Sunsilk users. Consumers are moving from product to experience," says HLL's Shivakumar.
He denies that his company is making yet another attempt to bond with consumers, but industry experts say that HLL would never invest in anything which didn't have a long term potential. So to woo customers, on offer are free hair cuts and beauty treatments by Habib and beauty specialist Samantha Kochhar.
Marico's Kaya trip is more an attempt to lessen its reliance on cash cows Saffola and Parachute. Over the years, the brands which have gained market share have also been milked dry with various extensions, many of which have failed.
In fact, unlike other players where the service foray has synergies with their brand portfolio, Kaya is absolutely out of sync with Marico's platter.
For Wella, it has been a year of 'reinventing the wheel' according to Sebastian Zachariah, head, creatives and communication at European Haircosmetics, the wholly owned subsidiary of Wella AG. After calling off its two-year-old marketing tie-up with J L Morrison of Nivea fame last February, it is looking at the salon business with enthusiasm.
Wella, which has no retail division and sells only through the parlour route, has plans to open 150 salons by this fiscal end. "We have to evolve given the scenario. That's the only way to penetrate the market," says Zachariah.
"For us, it is a perfect extension," says Vismay Sharma, general manager, professional products division at L'Oreal. Having tied up with parlours three years ago to call them Prestige outlets, its recent foray into HFX is a completely new initiative. "Salons as a channel are by far the most interesting," he adds.
All the players echo similar views. But it could be slightly unfamiliar territory.
Powered by 
© 2024 Rediff.com -