India's beauty salons hit by Covid revive business on Urban Company

The pandemic has accelerated the services of the tech-enabled home service marketplace which will be hiring over 15000 partners across categories in 2021

Sheelu, a beauty professional used to work at a salon in Delhi. Last year, just before the devastating coronavirus pandemic hit the country, Sheelu had joined as a service professional at Urban Company, India and UAE’s largest tech-enabled home services marketplace. This decision to join the online marketplace turned out to be good for her as soon the pandemic pounded the business of beauty salons across the country.

“I am happy that I made that decision on my friend’s recommendation,” said Sheelu, 28, who lives in Indirapuram in Delhi NCR. Her income increased considerably, which is 2-3x of her previous salary. She also got support from the company during the lockdown such as monetary assistance and vaccination. “My husband was unemployed for 6 months during that time. I was able to support the household comfortably while paying off existing loans and also managed to save money.”

Sheelu is among thousands of beauty professionals who are now increasingly joining Urban Company to provide their services at home after the pandemic hit the salon businesses in the country. In fact, the men’s grooming segment, which was launched on Urban Company right before India announced nationwide lockdown in March 2020 has grown by about 7x during the pandemic. It is seeing nearly 200,000 transactions per month. The firm’s spa business is seeing monthly deliveries or services close to 100,000.

Meanwhile, Urban Company’s salon-for-women business has grown at the same pace. The firm is also testing out several new services such as nail art and advanced treatments like laser hair removal — to add to its platform. Its hair services for women category, which includes haircuts, hair colour and hairstyling, is also growing rapidly and is currently present in eight cities in India. The firm plans to scale up such new services in the beauty category across the country.

“Many of these partners (beauty professionals) who joined us either had taken pause for their services due to the pandemic or used to even run their own salons,” said Mukund Kulashekaran, senior vice president, business, Urban Company, in an interview. “With respect to the salon, the market has shrunk quite sharply due to the pandemic.”

In the next six months, with markets opening and people returning to the office, Urban Company is expecting a huge increase in demand for such services. This is because the pandemic has accelerated the adoption of online services by the consumers who are not only finding it safe but convenient also.

“You want a haircut on Monday night at 8:00 p.m., we would be able to come to your house and provide the service,” said Kulashekaran. 

Urban Company has more than 35,000 service partners across 35 cities in India, the UAE, Singapore, Australia and Saudi Arabia. The marketplace offers a variety of home services to consumers, including beauty treatments, haircuts, deep cleaning, plumbing, carpentry and appliance repairs. Despite the pandemic, Urban Company has crossed 30-40 per cent of the pre covid levels for its beauty business because of its safety measures and new initiatives.

The firm plans to expand its presence to the top 100 cities in India. The company said it has been witnessing an overwhelming response from the cities it recently launched in. It will also be hiring over 15000 partners across categories in 2021.

“Beauty vertical accounts for 45-50 per cent of the business revenues,” said Kulashekaran. “We expect the business to grow multifold in the next 1 year given the way we are scaling and expanding services.”

Major demand in the salon category is from Delhi NCR, Bengaluru, Mumbai, Pune, Hyderabad and Kolkata. However, other cities are catching up. These include small cities and towns such as Nagpur,  Indore, Vizag, Coimbatore, Madurai, Dehradun and Chandigarh. At present, over 14000 service professionals work in the beauty category on Urban Company.

“The thought of physically going out risking the health of my daughter was making me extremely uncomfortable,” said Anamika Saini, 31, a teacher in New Delhi and a customer of Urban Company. “Also, working from home, I was hardly getting any time to go out at all. Urban Company’s safety and hygiene protocols and their well-trained service professionals and convenience have made it my preferred choice for not only salon but all kinds of services,” said Saini. She has also started booking salon services including haircuts and head massages for her 61-year-old father living in Mumbai.

Despite the setback from the coronavirus (Covid-19) pandemic and subsequent decline in demand, the Indian beauty and personal care industry is slowly but steadily recovering, according to data platform Statista. There is also a clear transition towards products that are more ethically sourced and naturally made. 

The overall market is worth $26.85 billion and is expected to grow at a compound annual rate of 8.5 per cent from 2021 to 2025, according to Statista. The largest segment is personal care at $12.26 billion. In global comparison, the US beauty and personal care market is generating $82.3 billion a year.

“We are also witnessing a huge demand for massage service, especially after the outbreak of covid as a lot of people are stressed,” said Kulashekaran. “They are sitting at home and working for long hours in front of the computer.”

The company is also now betting big on making its own private label beauty and grooming products. Besides that, it is tying up with international and local beauty brands for its services.

This year in June, Urban Company raised $ 255 million in a Series F round from investors such as Prosus Ventures and Tiger Global at $2.1 billion valuation. It is utilising the new investment towards innovation, training, product development, enhanced quality control and safety measures for both partners and consumers. The company aims to increase its geographic footprint by entering the top 100 cities in India and further expanding into international markets.