What are the factors that have affected the market potential of beauty services industry and under these circumstances which sales forecasting methods would you use to help Lakme?
Lakme Lever, the beauty-service unit of Hindustan Unilever (HUL), shrunk 19% in sales during the year ended March 2021, hurt by India's increasing focus on social distancing
nationwide and shutting salons and non-essential outlets for several weeks. The company, which runs 485 salons, posted sales of Rs. 230 crore during FY21, compared to Rs.
284 crore a year ago. The firm also slipped into losses - with net loss of Rs. 19 crore during the year against profit of Rs. 6 crore in FY20. The profitability for the year has been
largely impacted on account Covid outbreak. After a stringent lock down which disrupted operations in the first half, the company in the second half of the year has sequentiall
improved performance to almost previous period's revenue.The Rs 20,000 crore salon industry has about 65 lakh beauty parlours and barber shops. And just like other services sectors such as retail and restaurants, the salon segment ha
been hit hard due to closure as they are deemed non-essential in several states. Post the second wave of Covid starting]March 2021, salon operations are affected due to lock
downs as per government guidelines. The company is leveraging the digital medium to train their experts and to stay in touch with their clients. While the Lakme brand is worth
more than Rs 1,000 crore in revenue, cosmetics products such as eye-liners and lipsticks generate a bulk of its sales instead of beauty services.
The current pandemic has affected most discretionary categories but the beauty-services industry could be hit more than some others, with people relying increasingly on do-it-
yourself services at home.
What are the factors that have affected the market potential of beauty services industry and under these circumstances which sales forecasting methods would you
use to help Lakme?
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