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Salon Revenue May Fall By 40-50% compared to 2019: Shahnaz Husain
The Chairperson and MD of Rs 850 crore Shahnaz Husain Group, Shahnaz Husain shares with Ashish Sinha the adverse impact of Covid-19 on the sector and how the group is tackling it without laying off any of its employees.
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The Beauty & Wellness sector has been one of the worst hit because of the pandemic. While product sales may dip by around 30 per cent, and the salon revenue by 40-50 per cent, the online sales have more than doubled. The Group has around 650 Franchise and associated ventures in India and abroad, which include franchise salons, retail outlets / counters and beauty training academies. The Chairperson and MD of Rs 850 crore Shahnaz Husain Group, Shahnaz Husain shares with Ashish Sinha the adverse impact of Covid-19 on the sector and how the group is tackling it without laying off any of its employees. Excerpts:
How has the pandemic impacted the beauty salon business?
Like all businesses, the Beauty & Wellness business has also been negatively impacted. In fact, the negative effects are more pronounced where the beauty salon business is concerned. In salon treatments, touch is inevitable, for treatments like facials, massage, threading, waxing and so on. Therefore, we knew that business would have to re-open in a very controlled environment. Now the salons are open and are following strict protocols. There is a “new normal” that is being followed because this pandemic has taught us new methods of working and interacting with our customers and clients. The business is picking up slowly as customers are still wary of going to salons. The footfalls are down by 40 per cent to 50 per cent, as few customers are being allowed at a time, in order to maintain social distancing. Therefore, costs are higher and salons have to recover costs by pricing their services higher than before.
How was it for your company? Did you pay them salaries during the lockdown, or did you retrench any? What protocols are you following in your salons?
Salons were closed for almost four months and naturally, there were no revenue from our salons during that time. We expect total salon revenue for 2020 to fall by 40 per cent to 50 per cent during 2020, as compared to 2019.We did not retrench anybody and we continued to pay salaries to our salon employees during this time.
We had to adopt rigid protocols and safety measures to ensure safety for clients as well as employees. We were already following a clinical system, where we use disposable items and sterilize instruments. Temperature screening is being done. Clients have to wear masks, use hand sanitizers and the Aarogya Setu App installed on their phones so that their safety status may be confirmed.
How big is the beauty salon industry in India? How many are employed in it?
In India, the beauty business is booming. According to reports, the Indian beauty salon industry is estimated to be around Rs 10,000 crore. Over the last two years, the beauty service industry not only continued to thrive, but the demand grew. Indians were spending much more on beauty than they did before. This was expected to double within the next 5 years, according to estimates. However, there is now be a setback in figures due to Covid-19 and the lockdown. Beauty salons in India were keen to re-open, as the jobs of nearly a crore of professionals were at risk According to the Ministry of Skill Development, it has been estimated that the beauty salon segment would create around 7 million jobs in India.
How many are in the organized segment and how is it growing?
About 30 per cent of beauty salons are in the organized sector and this sector is expected to grow at a higher rate of about 20 per cent. According to industry estimates, the number of salons in India were 65 lakhs, but only 30 per cent are registered. The branded high-end sector or organized sector comprised of Rs 2500 crore. It is also estimated that the salon and spa business together account for 31 per cent of the total size of the beauty and wellness market.
How has the beauty products business been impacted? What about retail of beauty products?
The effect of the coronavirus pandemic on beauty brands and retailers will be far greater than during recession. Before we were hit by the Coronavirus pandemic, the beauty business in India continued to thrive. During 2018-2019, our revenue closed with a turnover of Rs 850 crore on the back of a large retail expansion that took our franchises to nearly 100 towns across the country. Indians were spending much more on beauty products than they did before. According to estimates, this was expected to double within the next 5 years. However, now there is a setback in figures due to Covid-19 and the lockdown. Earlier, the beauty industry was among the few industries that survived recessionary trends and proved to be resilient. But, the lockdown and Covid-19 have certainly impacted the beauty industry negatively, especially in categories like skin and hair care products, colour cosmetics and fragrances. Make-up cosmetics and perfumes command a 15 per cent share of the total market. The changes are also reflected in the fact that supply chains of several make-up items were disrupted. Lipstick sales and even foundations are showing a downward trend. With half the face covered by a mask, the use of lipstick and foundations has decreased. However, sales of eye make-up products are better. Consumers are also spending less on make-up and beauty products, due to anxiety over job losses and salary cuts. It is estimated that during 2020, revenues from sales of products may fall by 30 per cent. This is due to the fact the e-commerce sales of cosmetic products have grown, as compared to the 2019 figures. Imports of beauty products have also been negatively impacted. This has also affected the beauty business in India.
Are there any new trends in manufacture of beauty products? Have you launched any new products post Covid-19?
We have launched a new Germ Fight series of herbal products, from hand sanitizers, hand washes and body washes, to hand creams, gadget sprays, surface sprays, floor and toilet cleaners and so on. Consumers also prefer products that are reputed to be organic and hygienic. In fact, we concentrated on the sales of our skin and hair care Kits and different facial kits, which can be used at home easily, because they come with step-by-step procedures.
Is there any growth in e-commerce and online sales of cosmetic products?
During the pandemic and its effects, the only bright side was e-commerce and online sales of products. Online sales of cosmetic products, post Covid, are said to be twice as much as the pre-Covid sales. Experts feel that there should be an increase of 20 per cent to 30 per cent in e-commerce sales. Actually, it is becoming a digital world. In fact, one can even find one’s skin profile online and select products accordingly. This actually suits a business like ours, which is based on customized beauty care. In fact, we have managed to keep in touch with customers through content marketing, on our website, on social media and our online regular columns. Most brands are concentrating on promotions and even offering discounts on products for sales to pick up. As malls re-open, cosmetic products sales in stores are bound to pick up, although slowly.
With people wearing masks for several hours, are there any skin-related issues to watch out for?
With the spread of the Covid-19 pandemic, the wearing of masks is not only life-saving, but also mandatory. It is absolutely necessary for protection. But, it is also essential to keep in mind that even if you are wearing a mask, you still have to follow all the other protocols strictly. Constant wearing of masks can also cause some problems. The mask may trap oil and sweat deposits from the skin, or cause a collection of stale breath in the mask. Cotton material is considered to be best for masks, as it allows proper ventilation and traps less moisture that builds up from breathing and sweating. Synthetic materials should not be used to make masks. The mask should also fit properly, so that it provides adequate protection and should not be too tight. With cotton masks, you can wash them easily and dry them in the sun. Constant wearing of masks can also lead to skin irritation, due to collection of stale air, even saliva and mucous inside the masks. It can even lead to a kind of dermatitis, which will need medical attention. Yet another problem is that the mask trapping oil and sweat deposits from the skin can lead to an acne condition. For rashes and allergic reactions, it is better to consult a dermatologist. Apply a sun block cream or gel on the exposed area before going out in the sun.