Writankar Mukherjee, The Economic Times
Kolkata, April 23, 2012
Hair stylist Jawed Habib, who runs a chain of more than 300 salons across India, plans to take his venture global in a strategic partnership with Procter & Gamble, the world’s largest consumer goods company.
Procter & Gamble will not pick up equity in the venture, but will provide bridge financing and help identify locations as well as the kind of services to offer and how, said Habib who has finalised plans to set up three salons in London and one in Singapore.
"Our initial thrust will be Europe and we want a big presence in London and Paris," the chairman and managing director of Jawed Habib Hair & Beauty Ltd said. He said the company plans to open more than 50 salons abroad over the next two years. An email sent to P&G India regarding its business plans in this partnership remained unanswered.
But why would the maker of Pantene shampoo and Gillette razors support Habib’s global foray? Because his salons use P&G’s Wella brand hair colour and hair care products-a practice that his international salons will follow.
Experts feel it’s a good branding opportunity for P&G since consumers tend to show allegiance to brands that good salons use.
"For P&G, reaching out to consumers through Habib, who has attained an influential status among consumers, can be a smart way of building the brand," Devangshu Dutta, CEO of retail and brand consultancy Third Eyesight, said.
Habib plans to invest in his first set of salons abroad. He will use the franchisee route to expand. Habib says each salon will need an investment of Rs. 50-60 lakh.
Other Indian salons brands such as VLCC, Shahnaz Hussain, Blossom Kochhar and Naturals Beauty Salon too are expanding their business overseas. VLCC, for instance, recently announced plans to invest Rs. 50 crore to set up salons across Africa, the Middle East and Asia.
"The potential is much more in overseas markets, since consumers in matured markets like Europe spend almost 20-25% of their earning on grooming and beauty as compared to some 5% in urban India," said Habib whose salon chain reported a Rs. 50-crore turnover last year.
Habib is also launching a range of hair care products that he plans to roll out in the global salons. There will be 20 products, manufactured under third-party arrangement.