Union Budget 2022: A one-time reduction in the GST rates could greatly help the Beauty sector
Challenges led to new ways of doing business and opened new avenues for innovation
All sectors were affected, including our own. The downturn didn’t spare any industry, but the beauty sector took the brunt of it the most. There are store closings, halted product development, shut-downs of subsectors, and consumers with less disposable income and high unemployment. A combination of these and many other deterrent factors adversely affected the spa and salon industry, resulting in the entire beauty industry to suffer. Despite the fact that things have started to normalize, a number of companies and brands within this segment have been unable to cope up, and are currently struggling either to survive or to bounce back. There will be a long healing process for the losses incurred during the pandemic peak. It is evident that consumers can choose from a wide variety of products and services when visiting a spa or salon. Due to the fact that these services were not contactless, there was another reason for the slow growth of this industry. There were also significant effects on beauty products sales as well , since salons, spas, and other establishments could not use those products during the closure period. Additionally, when we tried to dispatch our products through couriers at exorbitant prices, there was a significant squeeze on our margins and production resources. This led to further drop in sales.
Technology strengthened the industry and stimulated its growth
We noticed a shift in terms of the overall trend of work and operations during the lockdown, as everything started to move forward in a digital mode and we started to do work and business differently. This was, perhaps, one of the most positive aspects of the pandemic for the business. We had been using social media for a while to promote our products and services, however, during that time of experiment we came up with some new ideas and innovations while pushing promotions and sales through social media and virtual conferencing. Even so, during this period, we intensified our efforts with digital plans, gathered consumer data, and tried to remain in touch with them using social media and video conferences, addressing their natural beauty concerns and questions with aromatherapy, naturopathy, and naturopathy products. Slowly and steadily, once services were resumed, we emphasized customization and personalization. With all covid protocols and after-care procedures summarized, all hygiene measures and disposable products used for beauty treatments were taken care of. With the help of our digital chats and subscriptions to our virtual consultation service, we have been able to maintain a high level of repeat business from our clients. The online membership model protected our business during difficult times and is still protecting us today. It has been observed that many of our clients purchase our products through eCommerce sites, and this has facilitated a new way of purchasing what we are offering. This does not mean that physical stores and wholesale distributors will go away, they’re just part of the mix. In order for beauty retailers to be successful in the long term, controlling distribution, data, and customer relations is the key to success.
Expectations & Hopes
Currently, when our country is burdened with a high rate of GST, a one-time reduction in the GST rates could greatly help the sector, but this would require a large amount of effort to implement. On the income tax front, We can expect an increased Income tax Slab and even, on our fixed Investments, we expect slash in the slabs. We are hopeful that the current Covid crisis is over and normal business activities take shape. And any /all businesses can flourish with our joint efforts.