The small details can be very important in forming first impressions. My first impression of You Look Great (YLG), the Bangalore-based personal care services offering from R&R Salons which has just picked up Rs 20 crore from Helion Venture Partners, is that they are weak with spellings. According to their website, they offer a service called ‘Personlisation’. A couple of services they offer though are pretty interesting — waxing that doesn’t hurt, for instance.
So what makes this company different from the dozens of other large and small beauty and spa service providers already around in the market? Looking at the services that they offer (after downloading the rather cumbersome Acrobat document), not much. It’s a regular beauty salon with attached spa-like facilities. A Mint post post says that personalized services and technology-aided processes would be YLG’s differentiators. That might work. I like the fact that the company will have a centralized database that will store customer details such as skin and hair profile, preferences in service providers, etc. and you can walk into any YGL salon in any city and get consistent service based on the information available on the database. However, how well this actually plays out on the ground we will know when things start to roll. Mint talks about 100 outlets in three years.
There’s no doubt that the beauty and personal care business in India holds great untapped potential. And because it is still a largely unorganized business, there’s a lot of room for growth. There’s not much detail available on the website on tariffs and so it is difficult to ascertain the customer profile that YLG has on its radar.
Helion makes this investment from its second fund, the $210 million kitty it raised last year. Just prior to YLG, the firm invested in Hummingbird Suites, which is a Bangalore-based company that operates a chain of high-end service apartments. I think that was a more superior deal — it solves a clear and pertinent problem in cities like Bangalore, Mumbai and Pune. Not sure what problem YLG solves. Helion is one of several early stage venture capital firms in India right now who are trying to spread themselves into safer, more mature, brick-and-mortar investments. It is a strategy that many have adopted to balance the slew of investments made in the past couple of years in areas such as mobile VAS, consumer Internet, niche outsourcing and so on.
What others are saying about the deal
As a side note, I believe,
Investments in serviced apartments are much riskier, especially in this downturn and in Bangalore, where there is no significant demand- supply gap.
Hospitality sector requires a longer time frame to break even and it’s highly sensitive to occupancy rates, which in turn depend on the world economy as most of the “guests” are expatriates.
As such, multinational firms would be more comfortable with global chains like Oakwood or Frasers/Frazers etc who are their partners in other locations as well.
Hi Snigdha,
I wonder why this difference between “z” and “s” should bother you- given you are an editor and would know it’s simply British vs. US style. Though the “z” of US is more prevalent these days, but “s” continues to be accepted
(http://www.reference.com/search?q=Personalisation).
Coming to the more relevant points,
I visited the Airport Road salon today and was enough intrigued to find more about it on the net after the visit. Let me list out my findings in (+) and (-) format, as I see them..
First the pluses
1. Waxing IS different. Although the pricing is on the higher side, but it does take care of my concern that the usual method of using common wax and knives is not risk free (germs, AIDS??). It Is probably less painful, and the products used do inspire confidence (I have a sensitive skin which gets sore post waxing, but this time it didn’t).
2. Variety of Services- Quite comprehensive. Pricing includes taxes (as of now atleast) which I think is a better way to quote prices. These are also comparable to other salons in the same category.
3. The hair treatment service being offered with every hair service. If it is beneficial (perceived), then it should do well.
4. The IT systems- Giving feedback is mandatory. It is simple and a good control measure. I wasn’t happy with one service, and instead of verbally articulating it, found it easier to score it on a scale of 5. The personalisation service is also something I would give thumbs up to.- I travel to various cities and know it’s a pain to explain your requirements over and over again.
5. This one is for Satsheel too. They DO have memberships and annual packages. And are offering promotional packages too.
6. Good marketing through free samples and gift your friend vouchers.
The Minuses
1. Too much staff in one salon.
2. The level of skill is not consistent. They should place smarter/quicker on feet staff at atleast their main office. I found some of them slow and lacking in energy. Although the menu gives ideal time taken for a service, it can vary to quite some extent in practical situations.
3. Atmosphere should be more vibrant. Reiterates point 2. However nothing to do with unfinished interiors.
4. IT systems should be constantly maintained. The touch screen wasn’t working properly.
5. The packages are not very consumer friendly. They should work on the pricing and product mix. It clearly looks a tool designed to raise finances for the company. Only jobless housewives (no offence to anyone, I am one currently!!), living nearby would get the most out of them.
6. Sometimes, a process need not be improved. No need to jazz it up.:-). For my head massage, the oil was being warmed up in a plastic container kept in a plastic bowl full of hot water. Even a kid would do better!
Finally, I think it’s okay to start out when small finishes to the interiors are left. However, not so okay if they are not done even after 4 months of operations.
All in all, in my opinion it should do well if they improve upon staff training and pricing vs. product mix in packages.
Hope this made sense.
Websites don’t give as much information as actual visits might.
Alls well , but to sustain , i guess ,YLG has to gear up …i understand that they have just started .but they have started services before completing the interiors .
the one in airport road has gaps in the doors..not a comfi feeling … and iam not sure if they will be equiped to handle more customers at one time …
No doubt, this is a great space to buy-into. I agree with your comment that this one looks like less-differentiated. It may have been interesting to see a buffet-like model, where one could pay annual/monthly fees for unlimited service. May just do the trick during times of uncertain economic times on cost-to-customer basis and could go really long way in increasing customer loyalty.
Also, this is interesting against the backdrop of your earlier “Tech Startups, Get Used to Competing with the Kirana” post. It kinda confirms the hypothesis. At the end this is beauty-services kirana, what else?
While the ‘beta’ part of the investment is understandable, I’m curious to know, where is alpha coming from!