The beauty industry in India is undergoing a significant transformation, and it's a battle for survival as traditional salon chains face fierce competition from tech-driven home service platforms and dermatology clinics.
Imagine stepping into a salon, expecting a relaxing experience, only to be met with a careless pair of hands that leave you with a burn or a nick. Well, it's time for salon chains to brace themselves for a similar fate, but this time, the competition is slow and deliberate.
The rise of on-demand home beauty services, such as Urban Company, GetLooks, and Yes Madam, is disrupting the market. These platforms capitalize on the convenience of home-based grooming, catering to the growing demand for instant gratification. Urban Company, in particular, has emerged as a leader in India's at-home beauty space, with its consumer services vertical clocking impressive growth.
But here's where it gets controversial: Urban Company's revenue from consumer services in Q2FY26 was ₹262 crore, surpassing the total business of salon chain Lakmé for FY25, which was ₹366.9 crore. And this is the part most people miss - Urban Company is only 11 years old, while Lakmé has been around for 73 years!
Urban Company's story is far from over. The overall beauty and wellness services market in India is estimated to be a massive ₹56,500-58,500 crore in 2024, with a projected 9-10% compound annual growth rate until 2029. Despite this size, online penetration remains below 1%, leaving a huge opportunity for digital expansion.
Urban Company offers a range of personal services, from women's skincare and hair grooming to men's haircuts and massages. To replicate salon-like experiences, they standardize services by training professionals, grading them, and providing branded, single-use products from premium brands. Yes Madam, another home service platform, also witnessed record growth during the festive season, with its popular Sokora Korean Glow Facial crossing 30,000 bookings in a single month.
Smaller rival GetLooks experienced similar momentum during the festival season, but managing scale remains a challenge. The founder, Gaurav Maheshwari, explained that supply is limited and can't be boosted instantly.
Leaders from the salon chain business argue that the rise of home services is just one aspect of the evolving market. Pushkaraj Shenai, former CEO of Lakmé Salons, believes the market is catering to three distinct consumer needs: convenience, experience, and expertise. He argues that convenience is more important for basic hygiene services, while expertise is sought for more specialized treatments.
However, smaller salon chains like YLG Salons question the sustainability of the home services model. Rahul Balachandran, CEO of YLG Salons, believes that certain experiences, like haircuts, are best enjoyed in a salon, where customers can relax and feel rejuvenated.
The demand for highly specialized services is shifting towards dermatology clinics. Brands like Kaya Skin Clinic offer clinical-grade treatments, attracting repeat customers and contributing significantly to the premium beauty landscape. The Indian aesthetics and dermatology market is projected to nearly double by FY29, growing at a rapid rate.
So, what does the future hold for salon chains? Pushkaraj Shenai believes that everything will coexist, just like AI won't take away jobs but will create opportunities for those who embrace it. The bigger challenge for salons lies in attracting, training, and retaining skilled professionals.
As the beauty industry evolves, it's clear that salon chains need to adapt and focus on expertise and talent to stay relevant. The battle for market share is intense, and only those who can provide exceptional experiences will thrive.
What's your take on this transformation? Do you think salon chains can survive and thrive in this new landscape? Share your thoughts in the comments below!
