Ana Ramos
CEO and Co-Founder
Glitzi
/
Startup Contributor

The Untapped Prospects in Latam’s Booming Beauty, Wellness Market

By Ana Ramos | Wed, 12/08/2021 - 13:57

Despite the boom in the number of startups and VC investments into Latin America in recent years, the region’s $34 billion beauty and wellness services market has seen little disruption. Looking good and feeling well is rooted in the Latin culture for both women and men (75 percent of Latin Americans consider beauty and a healthy lifestyle an important part of their culture). Yet, the current salon or spa experience barely lives up to expectations. Furthermore, most of the beauty and wellness professionals suffer poor working conditions in traditional salons and spas.

There have been attempts to disrupt this market: SaaS for traditional spa and salon management, such as Agenda Pro and Bewe; appointment-booking marketplaces for brick-and-mortar stores, such as Reserva Turno, BePretty, Salao VIP, and Vaniday; and eventually the players that deliver at-home services, such as Singu, Tu Ally and Glitzi. Nonetheless, the innovation in the beauty and wellness sector lags behind that of other industries in Latin America. According to Crunchbase, there are only 254 startups in the beauty space, compared to 3,892 classified as fintech, or 1,123 in real estate in Latin America.

Despite the 254 startups in this market, why haven't we seen a unicorn in this sector yet? Because the majority of the attempts to disrupt this market have overlooked the power that beauty and spa professionals have in this industry. Only a few players, such as those delivering at-home services, have started looking at these professionals as important customers. Unluckily, these companies have received little attention because the at-home services model has not created billion-dollar companies in the main startup markets (the US or Europe). Of course, Latin America is neither the US nor Europe. Just because a concept didn’t work in the US doesn’t mean it can’t work in Latin America (a good example is Kavak). However, if you look a little bit farther, into other emerging markets, you can find two very successful startups with this at-home personal services model; Urban Company in India (valued in $2.1 bn USD) & Helijia in China.

I recognized the powerful role of beauty and wellness professionals in this market while working as a VC investor in consumer tech. I had the chance to invest in Vaniday in Brazil, a company initially started as a marketplace for traditional spa and salon bookings then pivoted to a SaaS for traditional salons and spas. Working closely with the founders, I noticed that customers would follow their favorite professionals to wherever they worked, hopping from salon to salon. Customers care about who is providing their service, not where they are receiving it. My take was that traditional salons and spas are only an intermediary, the providers of resources (physical space, supplies, clients, administration services) that allow professionals to do their work.

Nevertheless, for beauty and spa professionals in the region, making a decent living working in traditional beauty salons and spas implies long shifts and usually lots of idle time. The lack of regulation of the industry does not motivate beauty salons and spa owners to pursue better quality so they offer very poor working conditions to professionals, who live mostly off tips or low commissions (20-40 percent). That is why, once a professional gathers enough clientele and experience, leaving the salon or spa to establish themselves as independent professionals becomes a natural choice. This has never been an easy choice for them because they lack the resources to start from scratch, without the infrastructure of the salon or spa. Technology, however, is now making it easier for them to take this leap of faith by replacing the infrastructure of the salon or spa with accessible tools for independent professionals that work on their own.  

In recent years, tools for freelancers (from training, wholesale e-commerce, microfinancing services, portable PoS tools) have helped professionals to become independent entrepreneurs. Beauty and wellness professionals have been fast adopters of these tools as they are motivated to leave traditional salons and spas. Imagine a single platform that could provide all the tools that independent beauty and wellness professionals need to develop their at-home services microbusiness? From launching, managing and upscaling their at-home services. That is Glitzi’s vision.

In Glitzi we started by connecting the professionals and the customers without a physical space, offering 3x more earnings to professionals than if they would work in a brick and mortar location and 10x better experience to customers. But this is only the beginning, Glitzi aims to become the vertical-specific platform that provides all the tools (software, training, customers, network and access to equipment and financial services) for beauty and wellness professionals in Latin America, helping them in their journey as independent entrepreneurs. We believe that, decent work for professionals is the bedrock of constructing the best available experience for customers and is the key to tapping into the substantial market of beauty and wellness services in Latin America.

Photo by:   Ana Ramos