Urban Company, formerly Urban Clap, has been beefing up its services to cater to the cautious customer – from tapping more markets to offering luxury services. Varun Khaitan, in a conversation with Devika Singh, talks about expanding the company’s beauty and grooming business, offering services across price points, launching private labels, and more.
The beauty services segment has been a big contributor to your business pre-Covid. Has that changed in the past few months?
Both the categories on our platform, beauty and home services, have seen growth in the last few months. And the mix between beauty and home services continues to be broadly even. We were doubtful if consumers would continue to avail cleaning services after domestic helpers returned to work. But we continue to see demand for these services, along with beauty and grooming. While our cleaning business has doubled, on the beauty side, the men’s grooming segment has risen sixfold, compared to the pre-Covid period. Seasonal services like home painting, too, have seen a rise in demand — more than double compared to the last festive season. Even for categories like spa and massage, we are back to 75% of the pre-pandemic level.
What changes or additions did you make to your beauty and grooming segment in the past few months?
During the lockdown months, we realised that we have a large opportunity ahead of us as consumers would be unsure of visiting salons after they reopened, due to fear of infection. Hence, we started expanding some of our services. Men’s grooming, which was present in eight cities, is now present across 18 cities. We have also recently launched haircut services for women in Gurugram, and plan to launch that in all our cities next year. We also now offer luxury salon services for women. Over the last five years, we have been building the beauty portfolio, but the Covid-19 pandemic has accelerated our plans. Over time, we want to cover the entire men’s and women’s grooming portfolio.
Is there a demand for men’s grooming services beyond haircuts?
We had introduced men’s grooming services about a year ago, and have seen a strong uptake. Since the beginning, about 30% of the bookings were for services other than haircuts, such as pedicure and facial. However, we had paused these services post lockdown, as we knew there would be a huge demand for haircuts. In the last five months, we have onboarded about 1,000 hairdressers every month to cater to this demand. We are now beginning to resume our non-haircut services.
Given that consumers are less inclined to splurge in these times, why launch a luxury beauty service offering?
We are accelerating our expansion during the pandemic because we see tailwinds. Consumers want to trust e-commerce brands and get services at home. Also, there are consumers across price tiers, and we want to service the entire spectrum. For instance, five years ago, we had five options for facials available on our platform, in the Rs 1,100-1,800 range. But we received feedback from customers that they were getting this service at Rs 600 offline. On the other hand, some are used to spending Rs 3,000 on a facial treatment. We knew we were addressing the sweet spot of the market, but we now want to cater to other segments, too. We have segregated our offerings into three segments based on the service quality — salon classic, salon prime and salon luxury. We have started this segmentation with beauty, as it is our single largest category; we will introduce services at different price points in other categories, too.
About one-fourth of your revenue in FY19 came from product sales. Are private labels on the cards?
We source and provide products to almost all of our service partners, except to those in appliance repair services. This helps our service providers save money, we get good margins and can pass on the price benefit to consumers.
Products play an important role as they help us ensure top-notch service quality. We have also realised that we can bring in better products in some categories in the market at lower price points, in comparison to what is available currently. And hence we are planning to launch products in partnership with brands, as well as our own private labels. We are also looking at selling these directly to the consumers.
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