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Future of retail lies in smaller cities

The future of the retailing industry lies in the smaller towns and even gradually in rural areas believes Shahnaz Husain Founder and CMD Shahnaz Husain Group of Companies In an exclusive interaction with Rural Marketing Husain shares the challenges opportunities and right strategy to tap these markets

Shahnaz Husain
CMD, Shahnaz Husain Group of Companies
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Cosmetic companies are tapping smaller cities in a big way. What’s your take on this?
In tier II cities, the beauty and wellness industry is growing; while in tier III, it is seen as having great potential. Over the past few years, the industry has successfully penetrated the smaller cities across India. Be it Baroda, Indore or Jaipur; all of these so-called smaller cities have witnessed the emergence of beauty and wellness. People have become more conscious of their appearance. There is much more interest in fitness. Additionally, the sky rocketing real-estate prices in tier I cities have also prompted companies to invest in tier II cities and beyond.

What are the latest trends that you are witnessing in these markets?
The spa industry, an integral part of the wellness industry in India, has observed a strong growth in the last six to seven years. The sudden surge of the spa industry in these cities has led to a trend and competition. Beauty salons are also offering spa treatments. Fitness and yoga centres have also come up in these areas. Besides, the traditional Ayurvedic centres are also coming up and have been attracting tourists.

What is your marketing strategy for smaller cities?
Since we extend our salons and other ventures through the franchise system, our brand has already moved to the smaller cities due to brand identity and demand for the franchise. The footfall has also increased, leading to a demand for the franchise business. We have introduced spa treatments, traditional Ayurvedic treatments and yoga in our Beauty Academy courses too. We already have beauty kits in smaller packaging for such markets, to popularize our products.

Which products are you offering to these customers?
We have nearly 375 products, for both premium and middle segments. The premium products are in demand in the smaller cities too, along with our specialised salon and spa treatments. Tier II cities in the country have good markets for products and services. In these cities various retail formats are emerging, like malls, multiplexes and supermarkets. It is considered that the future of the retailing industry lies in the smaller towns. People are willing to pay for exclusive treatments and services.

What factors should retailers keep in mind while tapping the rural sector?

According to the Global Retail Development Index, India is positioned as the foremost destination for retail investment and business development; and the rural sector is seen to have much untapped potential. However, there are many challenges. These markets are located at great distances from one another and reaching these rural areas is one of the greatest challenges. The development of products for the rural market is necessary, so that fake products do not read them. The products for the rural areas should be affordable and also according to modern cosmetic needs. Some companies have tried to overcome these problems by making smaller packs, to make them more affordable.

What are your expansion plans for FY 15?
We plan to extend our franchise salons and training academies to smaller towns. We have already opened our salons and shops in towns like Nasik, Pune, Dehradun and Baroda, etc. We have also introduced “Just Shahnaz” franchise retail outlets, to house the Shahnaz Husain products, and we intend to extend these outlets. The buzz has now shifted to smaller cities. Tier II cities in the country have good markets for every products or services. It is considered that the future of the retailing industry lies in the smaller towns and even gradually in rural areas. Our future plans include concentrated branding, strengthening and widening our global chain of franchise ventures and appointing distributors in unrepresented new markets. We have introduced an entire new repertoire of salon and spa treatments, using traditional and exotic ingredients. Product innovation has helped our organization to remain a dynamic one. So, we will continue to launch advanced products in Ayurvedic beauty care in the international markets.

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