The beauty, health and wellness segment has not been singed by the slowing economy if the sales figures of fast moving consumer goods (FMCG) beauty and wellness services formats like that of Marico’s Kaya Skin Care and Hindustan Unilever Ltd’s (HUL’s) Lakme beauty salons and Ayush therapy centres provide any indication.
Figures are hard to come by for this segment, which is in its infancy. However, the market for beauty and wellness services was pegged at around Rs 1,500 crore in 2007, of which the organised market is at Rs 440 crore and is estimated to be growing 25 per cent per annum. A bulk of this market is controlled by the unorganised sector with organised/branded retail outlets accounting for just under 10 per cent of total industry sales.
Despite this, Marico’s Kaya has grown more than 50 per cent in Q4 FY09 over the same quarter in FY08. Rakesh Pandey, CEO, Kaya Ltd (Marico), says: “The beauty and wellness segment, like FMCG, has been relatively less affected, with an increasing number of people becoming more aware of health and beauty care.”
Services offered by the beauty and wellness segments of FMCG companies help them sell products while the sale of products helps promote related services as a value-add. For Kaya, for instance, its skin care solutions, encompassing products and services, have helped it continue its growth — both in terms of revenue and number of clinics. The company recorded a revenue of Rs 41 crore in Q3 of FY09, growing 59 per cent over Q3 of FY08. It currently accounts for about 6 per cent of the group’s turnover. Kaya offers skin care solutions through 84 clinics, with 73 clinics operational across 20 cities in India and 11 clinics in the West Asia.
Harminder Sahni, MD, Technopak India, reasons: “Kaya is old in the business. Initially, it incurred huge losses. Now. after establishing itself into the market, it has the brand loyalty to clock healthy sales.”
The case is no different for HUL. Rakshit Hargave, business head, Beauty and Wellness Services, HUL, reasons: “Beauty and wellness today is not a luxury but all about looking good, feeling good and getting more out of life everyday. The Indian consumers are definitely now more willing to spend on themselves.”
HUL, however, didn’t disclose any numbers and declined to throw much light on the impact of the recession.
Its Lakme Salon business, meanwhile, grew in excess of 30 per cent in 2007 and added 24 new salons. There are 127 Lakme salons spread across more than 40 cities (both, company and franchisee owned), while Ayush has 38 therapy centres in five cities. In January, HUL licensed Lakme and Lever Ayush brands to a new subsidiary, Lakme Lever Private Ltd.
Even newer formats like newu (multi-brand beauty and wellness products retail format of Dabur) are confident of a fast turnaround. Manish V Asthana, Head-North, H&B Stores Ltd (a wholly-owned subsidiary of Dabur India Ltd), concurs: “The beauty, health and wellness retail market in India is still at a very nascent stage, but it’s one of the fastest growing segments within retail, reporting high double-digit growths.”
“We are confident that with our concerted efforts, the organised players will be able to considerably increase their share of the pie in the years to come,” adds Asthana. newu has now introduced private label products in babycare and fashion jewellery.
Unperturbed by the recession, the players are going ahead with their expansion plans. H&B Stores today has 9 newu outlets operational in Delhi-NCR, Hyderabad and Bangalore and plans to add another 12-15 stores over the next one year. Kaya will add 15 new clinics each year and will cross 100 outlets in 2009. The meltdown in retail rentals has also come to their aid. Both H&B Stores and Kaya have renegotiated rentals, wherever applicable.
