WHAT MAKES INDIA THE BEST AND
MOST ATTRACTIVE MARKET?

 

Market size -Treatwell is a
well-established business and online booking platform for hair and beauty which
is available across Europe and operates in 11 countries.

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The brand will be the most lucrative in the Indian market as the market
research shows a very positive result.

With a gigantic population –  having one of
the largest populations of millennials in the world and developing middle
class and more profound cell phone infiltration, India is potentially one of
the greatest markets for world organizations running on innovation. According
to a market research conducted, India is the 3rd biggest smartphone
market where it sold around 100 million handsets in the year 2015.

 

 

Expansion of middle class – The consumer
market in India can be comprehensively separated into rural and urban, it
likewise includes a gigantic working class, accepted to be a moderately rich
class with consumers consumption expenditure expected to show a dramatic increase
by the year 2025 thus, looking at the growth of the middle class and their
incomes per annum, many Indian households will be worldwide citizens who will
demand the best of design, technology and performance. With a rapid change in
the rise of the income of citizens in India, as the society is evolving there
is a noticeable and significant shift in the consumer behavior and attitude and
spending pattern. The biggest desire of many aspirer households in India was to
own a house or a car but today many of the consumers are willing to lavishly
spend on beauty and apparel which makes them look and feel good, gaining more
confidence and self-satisfaction in them. These shifts have a huge implication
on how Treatwell will position themselves in the Indian market. As emphasized
in the paragraph above, the internet is an increasing factor for the rise in
the e-commerce business in India and the influence will only keep expanding.

Social media plays a big role and people want to fit in with their peers and be
socially acceptable.

 

Increased revenue in beauty
business – The beauty market in India is divided into 3 categories. One being
beauty and wellness, second being the slimming and fitness segment and third
and the last one being the rejuvenation segment. Studies have shown the beauty
and wellness segment and the slimming and fitness segment covers 48% each of the
beauty market and the rejuvenation segment covers 4% of the market. This shows that
India has a potential growth and is a great opportunity for Treatwell to
capture the market. Apart from that, in 2012/13 the estimated of the beauty and
wellness market was an estimate of 41,224 crore and it is expected to grow to
80,370 crores in the year 2017/18 which is a massive growth in size. The annual
growth rate in this sector is to grow by 20-23%.

 

First mover – The most important
and attractive reason why India is a great market to invest in is that Treatwell
is the most mover to enter in the Indian market where they will gain a
sustainable competitive advantage by establishing themselves before any
competitors enter the market.

·    
India does not have any specialized and individual
platform for beauty where the consumers can book their appointments anytime in
the day and anywhere as per their convenience and also check reviews of
different saloons all under one roof. This will make a lasting impression on
customers which can lead to brand recognition and brand loyalty. They thus have
more time to refine their processes and perfect their service.

·    
They also have an advantage of controlling resources
where they can get an exclusive contract with premium suppliers.

·    
The buyers switching costs is high and the business is
the first one to be established in the market so it may be inconvenient for
consumers to switch to another new brand as the consumers tend to not want to
invest time in learning about other products and avoid the risk of being
dissatisfied. Thus, the first mover has the opportunity to shape consumer
preferences.

 

CHINA – China is the second-most
attractive market for Treatwell to invest in. There is a lot of potential for Treatwell
to grow in this market however there are significant and unavoidable risks as
well which cannot be ignored.

 

The market share of the beauty and personal care products and services
sold online in China has skyrocketed since the last 6 years. Studies have shown
that it has increased by nearly 6 times. This is an indication of how
profitable the Chinese e-commerce industry is. According to Euro monitor International, skin care
and hair care products accounted for more than half of the market share in
2014.

Just like India, there has been an increase in the spending power of the
Chinese citizens and the middle class is expanding and are willing to splurge
their income on beauty services. The millennials are a new breed of consumers
who are set to shape the future of commerce. Their values are set to become the
norm and they are a global generation. There is a drastic difference in the
mindset and priorities of the millennials from that of the previous generation.

They are conscious however, they want to experience a fun-oriented lifestyle
and are thus redefining consumption. They admire the western lifestyle and
believe it to be more sophisticated.

 

However, China is the second-best market to invest in as there are a few
negative criteria’s for Treatwell to enter the Chinese market.

 

Rise in Competition – China is a huge
market and has a bottle neck competition. There are many players in the
e-commerce beauty industry and services that already exist. The biggest
competition for Treatwell will be Meituan Dianping which is a Beijing based
company. It has a dominant position in the market and is a leader for internet
based services which can be booked via smartphone apps. For local businesses,
it’s the most powerful online partner and is widely used in China in around
2300 cities.

 

Government Intervention – In order to
stimulate the growth of local businesses, the Chinese government intervenes in
the decisions of foreign investment which is a major risk for the foreign
companies to enter the Chinese market. The government steps up the restrictions
in the pricing of capital which ultimately curbs the return on capital. There
are new rules and regulations been formed every now and then which restrict
foreign investors to enter the market.

 

BRAZIL – Brazil, much the
same as any other emerging and developing market seems to be well positioned
for new growth opportunities. Brazil is the 4th largest beauty
market in the world after the United states, Japan and China. According to euro
monitor, the beauty market accounts for 1.8% of the total GDP in Brazil. This
shows that beauty and personal care is very important in brazil. Brazilian
women spend through 11 times a greater amount of their yearly pay as a level of
their aggregate pay on beauty and personal care items than ladies in the UK.

Even though the beauty market is emerging in Brazil there are major
external factors that can challenge Treatwell to grow in this market. The
political and economic environment issues are notably risky.

 

Political environment – The political
system in brazil is very uncertain. The investors need to keep in mind that the
government can change the rules and laws which might harm the business returns.

The economy is unstable and corruption and illegal donations are used to boost
the growth of businesses. This can lead to custodial sentencing which means
that the company might pay a high price for it.

 

Economic environment – The Brazilian
economy has been encountering a constriction in GDP since 2014. However lately,
because of falling product costs, this pattern has turned around. The recession
caused a fall in internal demand that discouraged conceivable business
interests in the nation. Lower pay levels and the diminishment in customers’
confidence were what made up this reduction in demand. Charging high taxes is
another economic challenge for businesses to invest in Brazil. Tax collection
in Brazil can be an eccentric monster, with numerous local firms as of now combating
the authorities over gigantic of tax revenue.

 

 

SUGGESTIONS AND KEY FACTORS
FOR TREATWELL TO BE SUCCESSFUL IN INDIA –

 

·     Investing in consumer education and visibility of the brand – Buyer awareness and trust
assumes a key part in the development of the wellness products and services and
administrations showcase and in addition enlarging its consumer base. Players
have taken up various activities to instruct and enhance purchaser awareness in
regard to the advantages of wellbeing items and benefits, and are setting up
systems for professional dynamic buyer interface and feedback. Similarly,
inside the excellence section, players have concentrated on teaching their
clients with respect to the advantages of fixings, for example, initiated
carbon, AHA (in skincare) and keratin (in hair mind).

 

·     Developing innovative strategies in order to control cost pressure – Players in the industry are thinking about issues, for example,
rising information, distribution and labour costs. To alleviate edge dangers,
they must develop strategies being more responsive to market dynamics.

 

·     Diversifying portfolio to induce profitability – Treatwell should introduce and
manufacture products of their own for example “Treatwell moisturiser” or “Treatwell
clay mask”. The service must diversify into products to reach a higher target
market.

 

·      Providing consumers option to induce trial – In a push to focus on a more wider base of
consumers and initiate trial among current non-clients, organizations are
providing small SKUs (sachets and tubes) even for their mass premium and
premium items and can likewise utilize coupon rebates.

 

 

 

References

 

“This 44-Year-Old CEO is shaking up the £87 billion
beauty industry.” Business Insider France,online
www.businessinsider.fr/uk/treatwell-ceo-lopo-champalimaud-transforming-beauty-industry-2017-5/.Accessed
19 December 2017

 

“FIRST-MOVER ADVANTAGE.” Reference for
Business, {onlinewww.referenceforbusiness.com/management/Ex-Gov/First-Mover-Advantage.html.Accessed
19 December 2017

 

Vimal Choudhary, Alok Kshirsagar, and Ananth
Narayanan. “How multinationals can win in India.” McKinsey &
Company, onlinewww.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-multinationals-can-win-in-india. Accessed
19 December

 

“The New Indian: The Many Facets of a Changing
Consumer.”online Https://Www.bcg.com,
20 Mar. 2017, www.bcg.com/publications/2017/marketing-sales-globalization-new-indian-changing-consumer.aspx.

Accessed 19th December 2017

 

 

“Rising purchasing power economic growth:OECD”
onlinehttps://economictimes.indiatimes.com/news/economy/indicators/rising-purchasing-power-drives-indias-economic-growth-oecd/articleshow/16839425.cms
Accessed 19 December 2017

 

“FIRST-MOVER ADVANTAGE.” Reference for
Business, onlinewww.referenceforbusiness.com/management/Ex-Gov/First-Mover-Advantage.html.

Accessed 19 December

 

“Five super-Trends that will shape the future of
investment.” South China Morning Post,
19 May 2017 online, www.scmp.com/business/money/markets-investing/article/2094850/these-five-super-trends-will-shape-future.

Accessed 19 December 2017

 

 

David Ramli, Lulu Yilun Chen, Yuan Gao. “Meituan
Dianping: Little-Known Chinese tech startup valued at $30bn.” The Independent,
Independent Digital News and Media, 20 Oct. 2017,online www.independent.co.uk/news/business/indyventure/meituan-dianping-china-tech-startup-value-airbnb-space-30-billion-wang-xing-a8011281.html.

Accessed 19 December 2017

 

 

Kwok, Karen. “Investing In China: Pros and
Cons.” MorningstarUK, online’www.morningstar.co.uk/uk/news/154379/investing-in-china-pros-and-cons.aspx.

Accessed 19 December 2017

 

 

“The Beauty Market in Brazil.” Fung Global Retail
& Technology, onlinewww.fungglobalretailtech.com/research/beauty-market-brazil/.

Accessed 20 December

 

 

Cavallini, Laura. “The Risks of Investing in
Brazil.” The Market Mogul, 7 Feb. 2017, onlinewww.themarketmogul.com/brazilian-risk-assessment-companies-invest-brazil/.

Accessed 20 December

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