After services, UrbanClap and Housejoy eye product segment, to launch private labels

To capture a larger share of the mass market in beauty segment, on-demand service providers UrbanClap and Housejoy are all set to introduce private labels in product segment.

Besides services, both the on-demand service platforms are slated to offer products in beauty and personal care segments soon.

"The idea behind launching private labels is to also significantly bring down prices without impacting quality because the contract manufacturer could be the same. The margins in this segment are very strong,” Abhiraj Bhal, CEO of UrbanClap, was quoted as saying in an ET report.

UrbanClap claims to be one of the largest players with almost 7000 requests every day on its platform. It serves in 107 other live service categories and boasts of 100000 verified professionals on its platform. UrbanClap has around 1000 beauticians registered on its platform and claims to get one-third of total order in beauty.

Another player in the segment, Housejoy also thinks that it is good from overall profitability point of view. Saran Chatterjee, CEO of Housejoy said that to be a success in the segment it first needs to assess the market, which opts for brands such as Lotus, Sara Cosmetics and L’Oreal and partner with manufacturers to arrive at right product for the market.

Housejoy is also planning to launch private labels in moisturisers, sunscreens, night creams as also shampoos and nail paints for its beauty vertical. The company has earlier claimed that 500 women enrolled on a monthly payroll across the country.

Housejoy receives 400-500 orders in a day. The average order size is around Rs 1,000. It has also partnered with salon brands like L’Oreal, Rica, Cristine Valmy, and Raaga.

Entrackr's queries regarding the product development are yet to get responses from both the firms.

For on-demand service marketplaces, the beauty segment accounts for about a quarter of their revenue share, with gross margins for the category spanning 15-20% where a contractual service professional is involved and goes up to 40% when service providers are on the payrolls of the marketplace itself, according to industry estimates.

However, experts say that two things which will determine the business factor in on-demand beauty service were — scaling up the customer base and maintaining the quality service.