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O2 Spa, one of the largest day spa chains in India, has embarked on a major expansion involving an investment of about $15 million, aimed at cementing its position as the leader in the industry.
The Hyderabad-based spa chain founded by techies, has 60 centres across 17 cities currently, and plans to take this up to 150 outlets across 30 cities by the year-end.
The company, which had raised about $11 million from Banyan Tree, a Mauritius-based PE fund, plans to invest close to $15 million, which includes internal accruals, to facilitate this expansion.
O2 Spa has developed a strong customer base since its start-up days in 2008, and is setting up 10 more centres during the year in the West Asian region.
According to industry reports, the International Wellness Industry is estimated at $3.4 trillion and the Indian wellness industry is expected to cross $15 billion in 2016, growing at the rate of 15 per cent CAGR.
The Indian spa industry is estimated to be $200 million and expected to grow at 25 per cent annually. Currently 80% of the spa industry in India is in the unorganised sector.
Ritesh Reddy Mastipuram, Founder and Managing Director – O2 Spa said, “Worldwide the spa industry is one of the fastest growing and is recognised for its contribution towards wellness. In India, majority of the industry remains unorganised and the Indian consumer is just waking up to the wellness and spa concept.”
The expansion plans include addition of about 30 outlets in Tier-1 and 60 outlets in Tier-2 cities in India and more than 10 outlets abroad.
The O2 Spa operates in fivc different formats that include Airports, Malls, Luxury hotels, Standalone Properties and Luxury Trains (railways).
Swapna Reddy, Co-Founder and Director, O2 Spa said, “While deciding on our strategy for growth, we could not ignore these countries and took a bold decision to venture abroad. The extremely positive response we got enabled us to scale up to nine outlets within a short span of two months.”
“The distinctive advantage of being able to source trained therapists from our own O2 Skills Academy in Hyderabad helped expand easily,” she said.
All outlets are company owned and company operated. The O2 Spa chain is associated with 10 airports and 25 star hotels in India.
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