How COVID-19 affected the Salon Industry?

Covid19 affected salon

It’s been more than seven months since the outbreak of coronavirus pandemic. Initially, it started in china and then spread to the whole world. According to WHO, COVID-19 has infected more than 13 million people from 216 countries or territories. More than half a million confirmed deaths have been reported as on 15th July 2020. As of now, no proper medication or vaccine is available. Various organisations and drug manufacturers are working on creating the drug. Few of them has introduced their vaccines, but they are still in trial phases. Medical workers provide only supportive care. So, the safest option is to take precautions and follow preventive measures. The world had to impose lockdowns to prevent the spread. China started the lockdown from Jan 2020, followed by other countries and by the first week of April, more than 3.9 billion people worldwide were in lockdown. It’s no surprise that the world economy was hugely affected by these lockdowns or to be more precise by covid-19. Let’s discuss how Covid-19 has affected the world and the salon industry.

Covid-19 Impact on the Global Economy

covid impact global economy

Half of the world was under lockdown by the first week of April 2020. Both large, as well as small businesses, were affected by covid-19 worldwide. Lockdown caused a mass number of jobs to be lost around the world. A furlough (a temporary leave of employees due to the individual needs of a company) came into effect in various developed countries. According to the BBC, the percentage of workers furloughed is as follows:

  • 19% of workers were furloughed in the United Kingdom.
  • It roused to 23% in Germany.
  • Italy had 26% of workers furloughed.
  • For France, the percentage was 41.

The WHO has already warned that coronavirus may never go away completely. Consequently, most countries have ended the lockdown by June 2020 because it affected their economies significantly. The Asian development bank published a report on 15th may 2020 which said- “The global economy could suffer between $5.8 trillion and $8.8 trillion in losses – equivalent to 6.4% to 9.7% of the global GDP – as a result of the novel coronavirus disease (COVID-19) pandemic.” It also said that the global labour income would decrease from $1.2 trillion to $1.8 trillion and $359 billion to $550 billion for Asia. Reacting to this, the national governments took initiatives to overcome this loss, and the ADB analysed that the economic packages could raise global GDP by $1.7 trillion to $3.4 trillion. IMF said that the global economy would shrink by 3% this year. It described the decline as the worst since the Great Depression of the 1930s.

Impact on Indian Economy

Covid impact on india

As of 15th July 2020, the number of confirmed corona infected cases increased to 9,36,000, with almost 24,000 deaths, according to the Ministry of Health and Family Welfare. National lockdown in India came into effect from 25th March 2020 to 31st May 2020. During the lockdown, an estimated 14 crore (140 million) Indians lost employment. More than 45% of households across the nation have reported an income drop compared to the previous year. According to the Ministry of Statistics and Programme Implementation, there was a decline in India’s growth in the fourth quarter of the financial year 2020. The growth went down to 3.1%. A Ficci survey showed 53% of Indian businesses were significantly affected. A total of 91 lakh migrants travelled to their homes through trains and buses. 

Revenue of transport companies such as Ola Cabs went down nearly 95% in March-April. The tourism industry lost an estimated ₹15,000 crores ($2.1 billion) for March and April 2020 alone. The auto industry has lost over ₹13,000 crores due to forced lockdown, which contributes around 7.5% to India’s overall GDP, and 6,00,000 contractual jobs were at risk in the aviation sector. Restaurants reported a 35% drop, and manufacturing clusters had 9 million jobs impacted. Covid-19 also affected the salon industry. Almost one crore of salon professionals was affected.

Former CEA, Arvind Subramanian, said that India would need a ₹10 trillion (US$140 billion) stimulus to overcome the contraction. On 12th May 2020, PM Narendra Modi announced ₹20 lakh crore covid-19 relief package to make India self-reliant. It focused on land, labour, liquidity, and laws. It covered various sections, including MSMEs, labourers, middle-class people, etc.

Covid-19 impact on the Salon Industry

covid19 affected salon

Before lockdown, there were 70 lakh salons in India, and the total revenue from the beauty and wellness industry was around ₹32000 crores. All the beauty salons and parlours were shut entirely in the lockdown. It affected all the salon owners and their staff – the salon professionals. They couldn’t earn money as their primary source of income is from the salon services, which were completely shut down. We can predict that approximately ₹7000 crores of revenue were lost.

Salon owners couldn’t generate revenue due to which they couldn’t pay the salary to their salon staff. It was hard for them to pay the salon rent. The big brands in the salon industry (like Toni & Guy, Naturals, etc.) could survive this, but it was very tough for small and medium salons. Likewise, the salon staff was affected as they had no work and couldn’t get salaries. Consequently, they had to leave their jobs and decided to move to their home towns. Millions of salon employees lost their jobs. Enrich founder Vikram Bhatt said their overall material cost would increase by 30%, resulting in an 8-10% tariff increase. WHO has already warned that this corona may never go away entirely, but life needs to move on. People need to work and resume their lives, but the essential thing is to take all precautions and safety measures. So, all countries ended the lockdowns, and India started the unlock process from 1st June 2020 in a few phases.

Salons reopen

There were new guidelines, and all services were allowed to resume gradually in a planned manner. Many states allowed salon services to continue from June 2020. Some states allowed it by the start of June 2020, while others let it by the beginning of June 2020 expect in containment zones. It was grasping at straws for the salon owners and employees. They could now resume their work and start earning. But was this enough for the salon industry? The answer is actually “No.” The Salon industry realised that it wasn’t enough. Things changed a lot after lockdown, and salons need to adjust to the new normal. The mere opening of salons couldn’t bring clients to the salons. The main reason is that people are afraid to visit salons, which is very obvious because all the salon services require physical contact. It’s almost impossible to maintain social distancing amongst salon professionals and their clients. Hence, Covid-19 hugely affected the salon industry.

The effects of Covid-19 on the salon industry are as follows:

  • People are avoiding salon services to prevent the spread of covid-19, and hence they choose not to visit salons.
  • Salon services prices have increased as salons have to follow safety measures for covid-19, which has increased their expenses. Safety measures include using PPE kits, masks, disinfectants for tools, and sanitisers.
  • Very difficult for salons to generate revenue due to low client footfall.
  • Low income is generating from retail product sales. On the other hand, Expenses are rising from rent, electricity bill, etc.
  • Many Salons couldn’t open due to no staff. The previous staff left during the lockdown, and it’s challenging for salon owners to hire new staff

Conclusion

We can conclude that covid-19 affected the whole world, along with all the businesses. Covid-19 affected the Salon industry hugely as it entirely runs on physical contact. It’s said that around one crore salon professionals are affected by Covid-19. Salons need to adapt to the new environment quickly to survive. Various Salons have introduced new services like they are providing home services, etc. They are maintaining a high standard of hygiene. As a result, the salon industry is gradually coming back to the track. Beauty & Salon industry is said to be recession-proof, but still, it was impacted hugely. By this, we can infer how much covid-19 affected the world. Salon owners & professionals should visit letsryl.com to hire staff and to find best salon jobs. Do follow all the guidelines and precautions laid down by the Ministry of Health and Family Welfare until the world gets a covid-19 vaccine or properly licensed drug. You can find all the safety measures here which salons should follow after reopening them. Checkout other letsryl blogs to know more about the Beauty and Salon industry.

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