In today’s world, everyone desires to be groomed and pampered, particularly urban citizens and women. The salon industry has evolved into a multi-million dollar business, and post-COVID-19, there has been a significant boost in home salon services. Many of us have seen family members or relatives calling the local ‘parlour didi’ for quick beauty services, but the professionalism often fell short. This gap has led to the rise of home salon service platforms that offer standardised services and a professional salon-like experience at home. In India, there are only a handful of these platforms, with just two-three major players, including YesMadam. The company gained significant attention earlier this year after being featured on Shark Tank India.
The company’s revenue from operations rose 25.8% to Rs 27.04 crore in FY23 from Rs 21.48 crore in FY22. It reported a net loss of Rs 63.62 lakh in FY23 from a net profit of Rs 27.30 lakh in FY22.
In a conversation with BrandWagon Online, Mayank Arya, CEO and co-founder, YesMadam, talks about company’s differentiators, foray into offline space, making different revenue streams, among others. (Edited Excerpts)
How does your brand differentiate itself from competitors like Urban Company and other players in the home salon services industry? What key factors set you apart?
We don’t consider Urban Company a direct competitor because they operate across multiple verticals, whereas we focus specifically on the beauty niche. We’re going deeper into this space by expanding into offline services, launching our own private label products, and continuously innovating with new offerings. Unlike Urban Company, which doesn’t seem to have this in their DNA, our major differentiator is our deep focus on beauty. We’ve introduced services like LED treatments, which other online players don’t offer. Additionally, we’re known for providing a combination of services that are unique in the market, along with offering luxury at the best price.
What is your pricing strategy? How do you maintain affordability while ensuring high-quality services? How do you strike a balance between the two?
Our pricing is based on a simple per-minute calculation. For example, if a facial takes 60 minutes, we charge Rs 6 per minute, so the service cost would be Rs 360. If you prefer to use your own products, you can still book a professional for just Rs 360. Additionally, if you use YesMadam’s products or any available products on our platform, you have the flexibility to uncheck the product in your next service and still get the service at Rs 360. This ensures both affordability and transparency in pricing.
It’s reported that your company has lowered its commission to eight percent. What is the rationale behind this decision, and how does it impact overall profitability and partner engagement?
Partner engagement is a fundamental building block for our growth, which is why we reduced our commission to 8% to show our commitment to our partners. Despite this reduction, overall profitability hasn’t been impacted, as we generate margins from other sources. One of our key revenue streams comes from our in-house private label products. These products are exclusively available on our platform, ensuring that only our professionals can purchase them. This strategy helps us maintain control, prevent duplication, and build a protective moat around our offerings. We’re even aiming to reduce commissions to 0% in the near future.
Your products don’t seem as popular or well-known as your services. How are you planning to market them effectively?
Yes, our products are still in the early stages, but the acceptance has been very positive. Even without active marketing, around 70% of the products used on our platform are our own white-label products under the Organic Aroma brand.
How was FY24 for you in terms of revenue and profit or sales? And what are your expectations for FY25 and what are the strategies to achieve the targets?
FY24 has been very successful for us. We closed the year with a revenue of Rs 45 crore. For FY25, we expect to reach around Rs 100 crore, with an adjusted profit before tax projected to be between Rs 7 crore and Rs 8 crore.
We are already operating at a revenue and EBITDA run rate of Rs 7 crore- 8 crore. Our strategies focus on a tenfold customer obsession, continuous innovation, and delivering high-quality services. We prioritise our consumers, take escalations seriously, and view our partners as integral to our business because they directly serve our customers. We aim to keep them motivated and help them earn a good income on our platform. These cultural values have enabled us to maintain profitability without raising funds over the past seven years.
How many cities are you currently operate and what are your plans for expansion?
We currently operate in 56 cities, but 90% of our business comes from four major cities: Delhi NCR, Mumbai, Bengaluru, and Hyderabad. While we are not expanding into tier-2 and tier-3 cities at the moment, we are looking to expand into Kolkata and Chennai. Our strategy focuses on offline expansion to leverage our brand and address the larger problems faced by our consumers. Online services have limitations, particularly regarding hair treatments. Recently, we launched Korean skin treatments, which have a high ticket size and are exclusively available in our salons. In fact, we are one of the first salons in India to offer Korean hair spas and Korean facials in the offline space.
What is the current number of partners, what are your expansion plans, and what is the gender ratio among them?
We currently have 3,000 partners on board, and we are onboarding aggressively, with plans to double this number in the next year. We are very woman-centric, with 99% of our partners being women.
What are your overall marketing strategies for YesMadam, particularly in leveraging social media for user-generated content and utilising traditional and digital media, such as television and print?
Currently, we are not focusing on print media; our emphasis is on digital reach through platforms like Meta and UGC (user-generated content) and OTT platforms. We are particularly inclined toward content marketing, which fosters a connection with consumers. Nowadays, you can’t simply sell a product directly; it requires an emotional connection for consumers to relate to the brand. Therefore, our strategy is heavily driven by content marketing.
Can you tell me more about your collaboration with Shraddha Kapoor and how
you plan to utilise her to reach a wider audience?
We consider it a stroke of luck that the moment Shraddha Kapoor signed with YesMadam, she became the second most followed celebrity on Instagram. When you do things right, everything falls into place, and we believe we chose the right strategy at the right time. We didn’t just see her as a celebrity; her natural persona resonates with people, building trust among consumers who feel they can get a professional at home from YesMadam.
We also brought in Shakti Kapoor, who humorously portrayed his discomfort with professionals coming to homes, creating a mix of drama and humour that connected well with the audience. Additionally, we have a few more campaigns planned for the festive season.
What are your sales targets for this festive season, and how do you plan to make a significant impact?
For the festive season, we aim to achieve a revenue run rate of around Rs 8 crore, and we are targeting to increase that by 1.5 times in October and November. We understand that many consumers request professionals at home during the festivities, but timing can be challenging as our female professionals also want to celebrate with their families. Our goal is to build trust with our customers and ensure we don’t disappoint them. Ultimately, sales are just a number; the focus is on how well we can serve our customers.
You secured Rs 1.5 crore in funding from Shark Tank in February 2024. How has this funding impacted your growth plans, and where are you investing these resources?
To be honest, we did not raise the money from the sharks, although they brought a lot of value to the table. We are still in talks with them. Thankfully, we are currently profitable.
What are your plans to leverage technology, including AI and other innovative solutions, to improve both customer and partner experiences, especially considering you have over 1 million downloads on the Play Store?
AI is a parallel process for us, and we are continually integrating it into our app. We aim to leverage technology to allow consumers to book a facial at home or at a salon, addressing a gap currently present in the salon ecosystem. Our goal is to bridge the online and offline experiences, enabling users to book salon appointments through our app, select their preferred professionals, and receive the same services they enjoy at home.
What are the long-term plans for YesMadam?
Our long-term plan is to focus on bridging the existing limitations to provide services that address consumer needs. We aim to offer high-quality treatments and luxury facials at affordable prices through our app, which we believe will be a game changer for the beauty industry in India. We find that prices in the offline space are often expensive, and while we will continue to grow our online presence, we also want to establish ourselves in the offline space. Our goal is to be recognised as the number one salon brand in the country.