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L’Oréal and Wella are among the multinationals to pursue the market at a rapid clip.

When Rukmini Hondawar started as a hairstylist here 20 years ago, the salon concept was practically nonexistent in India. So Honawar followed the path of most beauticians back then. She set up shop in her home in the suburbs of Mumbai and invited people to come by for haircuts and beauty treatments.

“Being a stylist wasn’t considered a career at all,” said Honawar. But what a difference one generation can make.

Honawar now oversees a team of 11 professional stylists in two Mumbai beauty salons. There’s a small one near her home, which she opened 12 years ago after outgrowing her household business, and a one-year-old L’Oréal Professionnel-collaboration salon, named Runah, in a city-center shopping mall.

Runah is owned by Honawar, but uses and sells L’Oréal Professionnel products, which ring up an estimated $4,500 (?3,645/£2,515) to $6,500 monthly there. The salon staff regularly attends classes in a nearby L’Oréal training center.

Honawar’s business development mirrors India’s burgeoning health-and-beauty services industry, which generates $570 million annually. However, of that, only 1% still comes from “organized” outlets, while the rest stems from mom-and-pop shops or homes, according to New Delhi-based consulting firm KSA Technopak. And multinational brands have taken note that the salon category is prime for expansion.

L’Oréal Professionnel, which was launched in India in 1997, now works with a network of Indian salons. L’Oréal also introduced Matrix and Kérastase products in India last year.

“There’s a definite interest in high-end spa services, whether it’s a hair treatment or a massage,” said a spokeswoman for Franck Provost’s India operations, whose latest salon in Mumbai, its second door in the country, offers Kérastase hair treatments. “And, if they’ve had a good experience, a customer will often purchase some products, as well. Salons are becoming a good way to introduce new brands and products to the consumer.”

Wella entered the country in 1999 and today boasts products in about 4,000 salons in 30 Indian cities. And Lakmé, India’s largest domestic cosmetics company, has developed a salon business—including hair and skin treatments—too, with a chain of 85 franchised salons and another 25 expected to be opened by year-end.

“People are now starting to say, ‘I want to look good,'” said Anil Chopra, vice president of Lakmé Lever, a division of Unilever’s wholly owned India subsidiary, Hindustan Lever. “In the past five years, the salon business in India has been completely redefined. We believe we are sitting on a goldmine.”

The rise of professional salons is mainly due to India’s rapid economic development and globalization.

“In the past 10 years, there has been the growth of a middle class comprising a younger segment—people who are about 18 to 30— who are quite clear about what they want,” said Werner Robert, managing director of Wella’s India operations. “A whole new kind of consumer is emerging, and that’s extremely encouraging.”

“More people in India are traveling and becoming exposed to things abroad, and they’re starting to look for a similar experience at home,” added Honawar. “And now that more people are working in a professional setting, they’ve realized how important appearance can be.”

Due to that, demand for more services has been building.

“`Beauty parlors,’ as they’ve been called, had traditionally been focused on treatments like waxing or facials,” said Didier Villanueva, managing director of L’Oréal India. “Five to seven years ago, hair care only amounted to about a quarter of the activity in salons. We’re now working to make hair services a priority.”

The offer is becoming more specialized.

“One of the biggest changes we’ve seen is a demand for new services like coloring, which is where we’re concentrating our business,” said Wella’s Robert.

Hair straightening is also gaining popularity.

In years past, hairstylists had to travel abroad for professional training for such techniques. But in 2005, Lakmé set up a pilot training academy in Mumbai. And, depending on how the format works, more could be opened elsewhere around the country. Last November, Wella debuted a training school here with a top salon, Nalini & Yasmin. This February, L’Oréal Professionnel opened its own academy for trainees.

Such moves indicate the market is becoming more professional. “Consumers see new styles on celebrities and in magazines, and that has made them want to experiment more,” said Wella’s Robert.

This article appeared in WWD Beauty Report International, a special publication of WWD.