Franchising and the Wellness Industry Opportunity

Consider this: Hyderabad-based O2 Spas, which has set up shop at the Delhi and Mumbai airports, is now delivering spa therapies to offices. Weight loss and beauty specialists Vandana Luthra Curls and Curves (VLCC) is developing a residential medical spa in Gurgaon at an investment of Rs 100 crore. Delhi-based Spas India Private Limited, a subsidiary of Canadian Spas Worldwide, wants to expand from its single spa in Delhi to 10 more cities, Bangalore and Mumbai among them. First off the expansion block is Guwahati, on which Spas India is spending nearly Rs 10 crore.

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Meanwhile, Vallée de Vin Private Limited, is planning a unique “wine spa” by next year. And, Bharat Hotels’ Lalit Resort and Spas in Kerala, will invest Rs 70 crore in a 40-cottage spa. Recently opened in Pune, Mumbai’s Rudra Spa, whose cash registers ring up Rs 15 lakh to Rs 20 lakh every month, has plans to expand to Mumbai’s suburbs through a franchise model.

What’s prompting all this healthy activity is sheer demand. Although there are no industry figures, it is clear that expanding incomes are encouraging affluent Indians to explore more expensive health solutions. A study by the Federation of Indian Chambers of Commerce and Industry (Ficci) suggests that the wellness industry is growing at close to 20 per cent annually and currently stands at Rs 1,500 crore. According to O2’s founder and CEO, Ritesh Mastipur, India has 200 registered good-quality spas. “By the end of this year there will be 2,200 spas in India,” predicts Rajesh Sharma, president, Spas India.

O2 Spas is a case in point. Mastipur says his airport spas in Delhi and Mumbai get close to 30 customers a day. “It’s all about convenience,” he explains. His mobile spa, which offers services to companies, is also getting a good response, says he. The companies have to tie up with the spa and Rs 2,000 is the charge per “chair” for a 10- to 15-minute treatment. O2 Mobile Spas provide basic spa services like massages such as foot reflexology, head-neck-shoulder and so on to employees at their work places.

Vallée de Vin, which recently launched its wines in the Indian market under the brand name Zampa, is looking at an early 2011 opening of its novel wine spa on top of a hill in Sanjegaon, Nasik in Maharashtra at an investment of Rs 7 crore. Ravi Jain, director, says, “Nothing is on paper so far but we have started work on it. We have the wine so we thought why not the wine spa? Different kinds of therapies using wine will be offered to our customers.”

Given the rate at which the spa industry is expanding, the Spa Association of India is planning two academies, one each in Delhi and Guwahati, to tackle the biggest problem the industry faces today: lack of trained staff. “Ranging between six months and one year, the academies will have international and local staff,” adds Rajesh, whose spa is also the founder member of the association.

Apart from this, the association, which does not want to disclose its membership, plans to ask the government for accreditation facilities that will require all spas to be listed and certified by it based on a set of regulations. “Since skill sets is a problem, we have started hiring support staff like nurses from the health industry as that’s the closest we can get to wellness,” says Mastipur. “They are hospitable and sensitive towards others. We hire them and train them to become skilled masseuses. It is a win-win.” Nine-year-old Lees Beauty Center and Spa in Pune, run by Leena Khandekar, has started hiring trained professionals to conduct in-house training sessions. “This is a competitive niche area where well-trained staff is important. Like guest lecturers, skilled people come over to train my staff and keep them abreast of new trends,” she says. Lees is planning to open in Mumbai soon.

Given its growth, it is natural for the industry to require IT support. India’s largest IT services firm Tata Consultancy Services (TCS) has plunged in with a spa management solution and brought its IT offering for players to manage spas better. Says Venguswamy Ramaswamy, SMB global head, TCS, “The wellness industry is growing at 18 per cent year on year in terms of IT spends and that’s why we have entered this sector. We have supported global ayurvedic spa chain Kairali Spas to manage their systems more efficiently. Our software helps clients store and retrieve customer data, make a pattern from customer therapy history, suggest therapies and help them come up with better promotional offers.”