Tier II and III are emerging locations for Salons

on Sep 07, 2020 | 3277 views

The hair-care salon industry is a $75 billion-a-year industry that is growing at about 8% a year. In good times and bad, hair grows.

In the new emerging India, the growth opportunities have increased in untapped markets primarily due to the gigantic gap between availability and demand. The potential for the Salon industry has increased manifold in these areas due to various reasons such as the ample availability of real estate, better amenities, good infrastructure and skilled labour. These cities pose cost advantages, lesser salary expectations and lesser price fluctuations to many businesses which are initiating a shift to these smaller cities. Also the youth is taking this step to become financially independent even faster than currently estimated.

More over Real estate firms, Manufacturing, Service, E commerce and IT companies are observing a shift to these cities and hence increasing the per capita income and people’s spending power. Tier II and III cities mitigate the disadvantages that are associated with metros - of a reduced quality of life, high cost of living, expensive transportation, huge traffic and travel time, expensive house rent and education. The overcrowding in Tier I cities have compelled people to move out to open spaces with wider infrastructure, and nature-friendly ways.

In a recent study of Top 10 emerging business destinations in India, conducted by Cushman & Wakefield, global real estate solution providers, the growth in Tier II and Tier III cities is aided by 'the increasing disposable income of the people that has created immense opportunities for companies looking out for new markets to grow'. The study identifies the cities of Ahmedabad, Bhubaneswar, Chandigarh, Coimbatore, Jaipur, Kochi, Indore, Nagpur, Vadodara and Visakhapatnam as the top 10 emerging cities of India. With good hotels, good roads, good leisure and places for entertainment, people are now moving to these places where they can get everything.

In certain emerging cities like Mysore and Mangalore where lesser rentals are complimented with good infrastructure, even pre-schools have been growing at an incredible 120% per annum. Chandigarh, Coimbatore, Vadodara, Jamshedpur have become the hub of e-commerce and feature as the top four small cities for online shopping. Towns of Gujarat like Ahmedabad, Surat and Vadodara have made huge progress industrially. Metros are on the way for Jaipur, Kochi, Pune, Chandigarh, Ahmedabad, Kanpur, Ludhiana, Bhopal, Indore, and Faridabad. The government has shown strong support to these cities by trying to upgrade the urban infrastructure by upgrading the MRTS, airports; introducing SEZs etc. Most people are accepting that it is majorly due to the State Government's efforts that these cities are growing so well and will continue to grow.

Juice Salon has outlets in Vijaywada in South, Nashik and Kolhapur in the West that we have opened in the last few years. In the first year we built 5055 unique customers in Vijawada, Nashik built 3774 unique clients in the year they started and a small city like Kolhapur 3347 unique clients in the year.

Our average billing in Vijaywada is Rs. 1,954, Nashik is 1,726 and Kolhapur is 1302. This shows the potential of salons in these cities and makes it a great business to invest your hard earned money.

Year 2017-18, India's wellness and beauty market will clock close to 85,000 Crore mark out of which 30% is marked for Salon industry coupled with a 27-30% CAGR – Salon business is the business to be in.

Then the question remains where will you choose to open your Salon?

 

 

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