Beauty secrets

After honing their skills at Kishore Biyani’s Future Group, Rahul Bhalchandra and Rajeev Bopaiah bit the entrepreneurial bullet in 2008 and ventured into the beauty services industry. Backed by Rs 20 crore in venture funding from Helion Ventures, the duo’s firm—YLG (You Look Great) Salon and Spa—has opened eight units last year and plans to launch one new salon every month in 2009.

Growth driver The beauty services market is pegged at Rs 5,070 crore It is growing at an estimated 25 per cent annually Domestic and foreign companies are expanding their networks VCs such as Helion Ventures are now investing in this industry Only 5 per cent of the industry is organised Lower rents and attrition are helping companies

A recent L’Oreal study says the industry was worth Rs 5,070 crore in 2008 and growing at 25-30 per cent annually. “It costs us Rs 2,000 per sq. ft to set up an unit of 1,500 sq. ft,” says Bopaiah. While the company started its operations from Bangalore, it is set to expand nationally over the next two years.

YLG is not the only salon on a launch drive. Chennai-based CavinKare’s group company In Vogue has two brands—Limelite and Green Trends—both planning new launches. “We will expand by 25 to 30 per cent over the next couple of years,” says C.K. Ranganathan, CEO of CavinKare. Kaya Skin Clinic, which has 76 salons in India, has announced plans to add another 15 in the next quarter. “People like to look good during all seasons,” reasons Rakesh Pandey, CEO of Kaya.

The boom has also helped beauty product makers such as Schwarzkopf Professional grow by 80 per cent in the last four years. Jean-Claude Biguine, the well-known French chain, too, plans to invest Rs 100 crore in a 50-outlet chain in India. L’Oreal—one of the biggest players—has seen its business touch the Rs 600-crore mark here, growing at 40 per cent annually.

However, some bottlenecks such as shortage of trained manpower remain. To solve the crisis, many chains now have their own academies to train employees. “Around 600-700 trainees go through our programme annually,” says Kaya’s Pandey. At YLG, too, no one is allowed to tend to a customer before completing a 10-week rigorous training programme.

—Rahul Sachitanand