Sample of indian salon industry report (Extracts)


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Sample of indian salon industry report (Extracts)

  1. 1. Reevolv Advisory Services Private Limited Indian Salon Industry Report For any queries or detailed information contact us on +91 – 22 – 6002 2001 / +91 – 22 – 2436 3161 E-Mail at September 2015
  2. 2. Indian Salon Industry Report 2 Table of Contents Particulars Page Nos. 1. Executive Summary 5 2. Wellness Industry Overview 6 2.1. Background 6 2.2. The Wellness Cluster 7 3. Indian Salon Industry Overview 8 3.1. Market Opportunity 8 3.2. Growth Drivers 12 3.3. Nature of Industry 14 3.4. Porters Five Force Analysis 16 3.5. Key Challenges of the Industry 19 3.6. Business Model 21 3.7. Key Success Factors 24 3.8. Unit Economics 27 4. Geographic Overview 28 4.1. City-Wise Market Size, Key Players and Number of Outlets 28 4.2. Pricing Analysis 30
  3. 3. Indian Salon Industry Report 3 Particulars Page Nos. 5. Private Equity Interest in the Industry 31 5.1. YLG Salons (R&R Salons Pvt. Ltd) 31 5.2. VLCC (VLCC Health Care Ltd.) 32 5.3. Enrich (Enrich Hair and Skin Solutions Pvt. Ltd.) 33 5.4. B;blunt (Bhabani Blunt Hairdressing Private Limited) 34 5.5. Jean-Claude Bigiune (JCB Salon Private Limited) 35 6. Player Profiles 38 6.1. Summary 38 6.2. Affinity 40 6.3. b:blunt 46 6.4. Belleza 50 6.5. Enrich 54 6.6. Green Trends 60 6.7. Jawed Habib 64 6.8. Juice 68 6.9. Lakmé 72 6.10.Looks 76 6.11.Naturals 79 6.12.Strands 83
  4. 4. Indian Salon Industry Report 4 Particulars Page Nos. 6.13.VLCC 87 6.14.YLG 92 6.15.JCB Salons 96 6.16.Belita India 100 6.17.International Players in India 103 7. Annexure 104
  5. 5. Indian Salon Industry Report 5 1. Executive Summary Beauty consciousness has dawned due to rising affluence of consumers. With an increase in the number of households upgrading to a higher consumption lifestyle, there is an accelerated growth in the Indian beauty space. Branded salons have emerged as a key growth constituent. Growing affluence has resulted in increased experimentation and the desire to look better. This has accelerated the growth of beauty products and services. Salons are at the centre of that growth. With this industry perspective salon chains like ________, _______ etc. are establishing their presence across the country. In addition to home grown players, foreign chains like _____________ etc. are also setting up salons to groom the Indian consumer. Clearly, the predominantly unorganized locally run beauty salon market is at an inflection point. The mushrooming of branded chains is expected to completely change the landscape a few years down the line, ushering in a new era of trained salon personnel, offering services based on global insights and professional products with the latest international technologies. Also there is a lot of activity happening in the on-demand home beauty services platform market with many new players like ______________ etc. starting operations. The total size of salon and allied services market in India was around Rs. XXX billion in 2012, which has grown from ~Rs. XXX billion in 2005 at a CAGR of XX% p.a. The urban and rural market has been growing at a pace of XX% p.a. and XX% p.a. respectively. As per our estimates, the industry is currently at Rs. XXX billion in 2012 will grow at a CAGR of XX% p.a. to reach ~Rs. XXX billion in 2020. The urban market is estimated to grow at a CAGR of XX% (2015- 2020E) to reach Rs. XXX billion in 2020E from ~Rs. XX billion in 2012 and rural market is estimated to grow at CAGR of XX% (2015-2020E) to reach ~Rs. XXX billion from Rs. XXX billion in 2012. The size of the organised market was approximately Rs. XX billion in FY2010 which has increased to ~Rs. XX billion by 2015 growing at a CAGR of ~XX% p.a. At this rate, organised market has potential to reach Rs. XX billion by 2020. In terms of geographies, southern region seems to be more organised as compared to other regions with major salon chains like ______________ etc. However, as with any other industry, it is not without challenges. The scarcity of trained professionals is the biggest challenge in the industry due to the less number of training institutions. This supply-demand gap is leading to an upward salary cost for trained professionals coupled with higher attrition. Industry players find it extremely difficult to scale up because of lack of bank funding. The higher rentals in cities are acting as an impediment to growth.
  6. 6. Indian Salon Industry Report 6 2. Wellness Industry Overview 2.1. Background 2.2. The Wellness Industry Cluster Fig 1: The Wellness Industry Cluster Pictorial Representaton
  7. 7. Indian Salon Industry Report 7 3. Salon Industry Overview 3.1. Market Opportunity Total Market Market Size Rs. 2005 2012 2015E 2020E CAGR% (2005–12) CAGR% (2015–20E) Total (Rs. In billion) Urban (Rs. In billion) Rural (Rs. In billion) Urban Market % Rural Market % Urban & Rural Market Share Share of Urban and Rural Market (2005-2020E) Source — Reevolv estimates, NSS Reports 0 1 2 3 4 5 6 7 8
  8. 8. Indian Salon Industry Report 8 Urban Market (Tier 1, 2 and 3 Cities) Total Market Size – Tier 1, 2 and 3 cities (2012) Cities No. of Cities Rs. million Tier 1 Tier 2 Tier 3 Total Source : Tier 1 Urban Market Break up Tier 1 Market Size (2012) in Rs. Million Tier 1: Delhi-NCR, Greater Mumbai, Kolkata, Bangalore, Chennai, Hyderabad, Pune, Ahmadabad (cities with population of more than 5 million). Tier 2: Agra, Allahabad, Amritsar, Asansol, Aurangabad, Bhopal, Coimbatore, Chandigarh, Dhanbad, Durg-Bhilainagar, Vishakhapatnam (GVMC), Ghaziabad, Gwalior, Indore, Jabalpur, Jaipur, Jamshedpur, Jodhpur, Kannur, Kochi, Kanpur, Kota, Kozhikode, Ludhiana, Madurai, Malappuram, Mysore, Lucknow, Meerut, Nashik, Patna, Nagpur, Raipur, Rajkot, Ranchi, Srinagar, Surat, Thiruvananthapuram, Thrissur, Tiruchirappali, Vadodara, Varanasi, Vasai Virar City and Vijaywada. (Cities with population of 1 to 5 million). Tier 3: Ajmer, Aligarh, Amravati, Bareilly, Belgaum, Bhavnagar, Bhiwandi, Bhubaneswar, Bikaner, Bokaro, Cuttack, Dehradun, Durgapur, Erode, Firozabad, Gorakhpur, Gulbarga, Guntur, Guwahati, Hubli-Dharwad, Jalandhar, Jammu, Jamnagar, Jhansi, Kollam, Kolhapur, Malegaon, Mangalore, Moradabad, Nanded, Nellore, Puducherry, Rourkela, Saharanpur, Salem, Sangli, Siliguri, Solapur, Tiruppur, Ujjain, Warangal (cities with population of 0.5 to 1 million).
  9. 9. Indian Salon Industry Report 9 State wise Urban and Rural Market State wise - Urban Market State wise Urban Market Share (2012) in Rs. Million Total Urban Market – Key states and per capita expenditure (2012) State Per Capita Expenditure in Rs. Urban Population (2012) in Mn Urban Market (2012) in Rs. Mn Market Share as a Percentage of Total Urban Market Source : Reevolv estimates, NSS Reports
  10. 10. Indian Salon Industry Report 10 State wise - Rural Market State wise Rural Market Share (2012) in Rs. Million Total Rural Market – Key states and per capita expenditure (2012) State Per Capita Expenditure in Rs. Rural Population (2012) in Mn Rural Market (2012) in Rs. Mn Market Share as a Percentage of Total Rural Market Source : Reevolv estimates, NSS Reports
  11. 11. Indian Salon Industry Report 11 3.2. Growth Drivers Fig 8: Fig 9: 0 1 2 3 4 5 6 7 8 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Category 1 Category 2 Category 3 Category 4
  12. 12. Indian Salon Industry Report 12 Fig 10: Source — 3.3. Nature of Industry 3.3.1 Unorganised 0 1 2 3 4 5 6 7 8
  13. 13. Indian Salon Industry Report 13 3.3.2 Organised Fig 11: Comparison of Unorganised and Organised Salons Parameter Unorganised Organised
  14. 14. Indian Salon Industry Report 14 3.4. Porters Five Force Analysis Fig 12:
  15. 15. Indian Salon Industry Report 15 3.5. Key Challenges of the Industry 3.6. Business Model Fig 13: Typical Salon Business model Pictorial Representation
  16. 16. Indian Salon Industry Report 16 3.7. Key Success Factors Fig 15: Critical Success Factors Pictorial Representation
  17. 17. Indian Salon Industry Report 17 3.8. Typical Unit Economics
  18. 18. Indian Salon Industry Report 18 4. Geographic Overview 4.1. City-Wise Market Size, Key Players and Number of Outlets Source — Reevolv Research 4.2. Pricing Analysis – Tier 1 Male Haircut Female Haircut Source — Reevolv Research
  19. 19. Indian Salon Industry Report 19 5. Private Equity Interest in the Industry
  20. 20. Indian Salon Industry Report 20 5.1. Player Profile 6.2.1 Overview Parameter Description Company Name Profile • Wellness Segments Owned by/ Key shareholders No. of Outlets Business Model Products Target Customer Segment Brands Source: Company Website and Reevolv Research 6.2.2 Locations North Total No. of Cities No. of Outlets Tier1 No. of Outlets Tier2 No. of Outlets Tier3 and below Total – Outlets Major States/Cities Source — Company website
  21. 21. Indian Salon Industry Report 21 6.2.3 Pricing Cities Tier I Source — Reevolv Research 6.2.4 Talent Sourcing
  22. 22. Indian Salon Industry Report 22 6.2.5 Financials Profit & Loss Account for the year ended 31st March (Rs. Mn) FY2012 FY2013 FY2014 Balance Sheet as at 31st March (Rs. Mn) FY2012 FY2013 FY2014 Source: Company Filings, Totals may not tally due to rounding off errors Key Ratios FY2012 FY2013 FY2014
  23. 23. Indian Salon Industry Report 23 6.16. International Players in India Name Description
  24. 24. Indian Salon Industry Report 24 7. Annexure 7.1. Ratios Key Ratios Cost of Material Consumed % Cost of Material Consumed Total Revenues X 100 Employee Expenses % Employee Expenses Total Revenues X 100 Selling & Distribution Expenses % Selling & Distribution Expenses Total Revenues X 100 Administrative Expenses % Administrative Expenses Total Revenues X 100 EBITDA % EBITDA Total Revenues X 100 EBIT % EBIT Total Revenues X 100 PBT % PBT Total Revenues X 100 PAT % PAT Total Revenues X 100 ROCE % EBIT Capital Employed X 100 ROE % PAT Net Worth X 100 Capital Employed Total of Asset / Liabilities (Liabilities = Shareholders funds + Loan Funds + Deferred Tax + Minority Interest) Working Capital Turnover Ratio Total Revenues Net Current Assets excl Cash Bank Net Fixed Assets Turnover Ratio Total Revenues (Net Fixed Assets excl Capital Work in Progress) Inventory Days Inventory (Cost of Material Consumed) X 365 Debtors Days Debtors Total Revenues X 365
  25. 25. Indian Salon Industry Report 25 7.2. Abbreviations Description Bn Billon CAGR Compound Annual Growth Rate CCD Compulsory Convertible Debentures CCPS Compulsory Convertible Preference Shares CECO Company owned E-Commerce portal CY Calendar Year EBIT Earnings before interest and tax EBITDA Earnings before interest, tax, depreciation and amortisation EBO Exclusive Brand Outlet EV Enterprise value FY Financial year L Luxury LFR Large Format Retail M Mass segment MBO Multi Brand Outlet MMR Mumbai Metropolitan Region Mn Million NA Not available NCR National Capital Region NM Not meaningful NR Not relevant NS Not specific OEC Other e-commerce portal P Premium P/E Price to earnings PAT Profit after tax PBT Profit before tax ROCE Return on capital employed ROE Return on equity SP Semi-premium TC Traditional channel
  26. 26. Indian Salon Industry Report 26 About Reevolv Reevolv is a boutique consulting and investment banking company offering a "One Stop Shop" in the areas of business strategy, financial advisory and operations consulting to corporates and private equity funds. We service our clients in their constant re-evolution process through our in-depth industry research, domain understanding, our timely and superior execution capabilities and strong network to provide customized solutions to our clients. With a host of implementation focused services spanning across functions, we ensure that our clients reach the desired goals and objectives in most efficient manner. We achieve sustainability of our initiatives by an all round involvement of the client resources. This approach of an integrated improvement helps build a strong foundation for the forward leap of our clients. Reevolv understands and acts upon the Strategic, Financial and Operational needs of the clients on a regular basis to ensure adaptability and flexibility to suit the market and industry dynamics. Founded in 2008, Reevolv is a team of CAs, MBAs and Engineers with functional and industry expertise and diverse background of investment banking and management consulting. Disclaimer This report is published for information only. Reevolv Advisory Services Private Limited or any of its affiliates, group companies, directors, employees, agents or representatives shall not be liable for any loss or damages whether direct or indirectthat may arise from or in connection with the use of the information in this document. This document is the sole property of Reevolv Advisory Services Private Limitedand prior permission is required for full or part reproduction.This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. Contact Details For any queries or detailed information contact us on +91 22 – 6002 2001 +91 - 22 – 2436 3161 or email at Address: No. B/002,Vision Court Staney Fernandes Wadi Co-operative Housing Society Limited, Final Plot no. 746, OPN 115 T.P.S., M.T.N.L Exchange Lane (College Street), Dadar (West), Mumbai 400 028 You can also email the research analyst at Shilpa Bhattar,