Scent of a rewarding opportunity via franchising

Aroma of fruits, lavender, jasmine, rose, sandalwood, vanilla and so on are some of the best selling fragrances around the world. Consumers look for long lasting and nice scents that stick to their skin over many deodorants that start fading off and getting stale after sometime. Interestingly, perfumes or top of the line fragrances have always been one of the most popular must have items for the aspiring consumers. Summers are the best time for the players of the perfume/fragrance industry to expand their business. Recently, Perfume Station by York Transnational Limited (a Hong Kong based company), a unique concept of a 100 per cent perfume store announces its foray in franchising. It is one of its kinds in India, which is looking for taking the current numbers of its five stores to 30 by the end of 2011 and 100 by mid 2013.

According to Sandeep Kapoor, CEO, York Transnational Ltd, “Looking at the tremendous response to our first company store in Jodhpur, we decided to expand in other parts of India with this unique concept. We felt that the fastest way to attain our expansion objective was through the franchise route.” Presently, the company is targeting Tier II and III cities for standalone and the metros for our kiosk model as the company’s past experience has proved that the response is much better and faster in tier II and III cities.

Indian Fragrance Industry

Fragrances have always been an inseparable part of consumers’ lives but the concept of branded colognes, body sprays, apparel scents, deodorants and perfumes is relatively new in India. The Indian perfume market worth Rs 300 crore has witnessed astonishing growth with a lot of international players coming to fore such as Christian Dior, Hugo Boss, Calvin Klein, Lancome, Ralph Lauren, Giorgio Armani and Diesel, Prada and so on. Majority of these players operate in India through multi brand outlets, however few have their boutiques and standalone stores as well. Though franchising is still not practiced much by these players yet. Keeping the market trend in mind, experts of the industry speculates a promising growth of almost double the figure in the next two years.

Scentual franchise opportunity and offerings

With the vast collections of unique and elegant perfumes that are used by all classes and masses, the industry is growing at a rapid rate of almost 100 per cent annually. The industry shows immense potential for those who are considering franchise options to enter the sector to get started with a perfume franchise. Players like Perfume Station, which are seeking franchisees to expand its business in India, are operating through two models; standalone shops and kiosks. The company is looking at franchise partners who can afford to invest Rs seven to eight lakh with an area of 200 to 250 sq.ft for the standalone franchise and Rs four to five lakh for the kiosk module, which needs be erected at the super markets/shopping malls which need an area of 100 sq ft. As per Kapoor, “These investment figures include the cost of interiors, inventory of merchandise which has to be kept at the store and the franchise fee.”

Joining hands with a company like Perfume Station leverage you with initial advertising/branding support. Besides this, the company also helps its franchisees in identifying the preferable locations with full sales training to the staff starting from the theoretical aspect of perfumes to closing the sale. According to Kapoor, “Our designing team then does the interior designing of the store so that all stores look the same all over the country to maintain the synergy for the consumers.”

Future outlook

Having seen the enormous gap in this niche segment and the opportunity available, franchising is what the players of the industry need to capture a major share of this rapidly growing industry. The concept offer high returns on investment and franchising avails continuous support from the parent company in terms of business expansion and development (launch of new products) and brand building. The increased visibility of foreign brands in departmental and cosmetic stores coupled with the rising disposable incomes of the consumers is fueling the industry and ensures a bright future for the new entrants (potential franchisees).

With higher disposable incomes and living standards, Indian consumers have begun to splurge with aplomb, to be in sync with the latest trends. In other words, the increasing disposable incomes of the consumers are upgrading them from deodorants to perfumes, thereby fueling the franchise growth.