O2 Spa to Invest $15M in Future Expansion of their Business

'People achieve greater happiness in life when they follow their passion', we see multiple examples of people making this quote true around us. But today, we bring before you an interesting story of a young entrepreneur Ritesh Mastipuram, Founder and MD O2 Spa.

His Journey
A young entrepreneur and a curious techie at heart, Ritesh’s story is one of passion and perseverance. Ritesh started out as a techie and worked to setup the company’s mobile app operations in India. Utilizing his pleasant people skills, technical expertise and unique leadership talent, he single handedly created a system that not only stabilized the Indian operations but is being used even today. While most people see their college days as a time to enjoy, Ritesh’s thirst for entrepreneurship and curiosity to understand different markets; led him to start a Biryani joint during his masters in the US. Running a food joint in the happening NY City, taught Ritesh leadership and the ropes of the business, at a very young age.

Constantly being in the pursuit of his next passion, Ritesh decided to apply his learnings for a completely new market. The wellness and spa industry in India then was at a nascent stage and seemed like a perfect opportunity to build a successful structured venture. Thus with the aim of becoming the World’s largest wellness solutions provider, Ritesh founded O2 spa in 2008. Today in a short span of just 8-9 years, O2 Spa is Asia’s first and largest organized Spa chain with more than 1000 walkins a day, more 4 lakh walkins a year; with 82 outlets in 19 cities in India and 9 outlets in the UAE. O2 is the only brand that has Asia’s largest Spa institute – O2 skills to its credit; aimed towards fulfilling the demand of skilled technicians in the spa industry!

Let's have a better look at the Indian Wellness Industry:
Slowly but very steadily, the wellness industry in India is gaining its own identify and evolving as an established industry. The industry in India is close to USD 200 Million growing at over 30% year on year. The industry will grow as per the projected 15 % CAGR however not much of a consolidation as many mom and pop stores are going to come up. Last year, in 2016, the industry witnessed very positive demand and growth both from an employment perspective as well as from a customer point of view. This awareness and growth especially is on the rise as the concept of health and well being is now a much growing concern and influencer in deciding the way individuals plan their lives. Hence, ‘Me Time’ is a priority now in most people’s calendar.

Edited Excerpts:
What are the Unique Features of O2 Spa?
For one, O2 Spa is home to many firsts in the industry and that puts us in the ‘Trend-setter’ category.

- O2 Spa is India’s First Organised Day Spa. We are also Asia’s Largest Organised Day Spa Chain – that makes us India’s Largest as well.
- O2 Spa is the only chain that runs its business on different formats. We are present in Malls, Airports, Star Hotels, and Luxury Trains and in Standalone stores. Our philosophy here is ‘go where the customer is’ thus creating an air of convenience for the client
- O2 Spa is the only chain where all our outlets are COCO- Company Owned and Company Operated. This means that we are not only able to able to offer standardized and quality services but also ensure the quality across all our outlets. O2 Spa is an Indian spa chain with the largest International footprint today with 9 outlets across Dubai, Abu Dhabi, Sharjah and Fujairah

Tell us something about your services and offerings?
We at O2 Spa have always envisioned offering the best detoxifying and rejuvenating treatments. We have 5 service verticals which are Spa therapies, spa facials, Body scrub and wraps, Spa pedicure and manicure and Spa combos. The massages would include Aromatherapy, Deep tissue massage, Thai massage, Swedish massage. Facials include organic, white and bright, Deep cleansing and anti ageing. To name a few body scrubs and wraps; African coco butter moisturizing, Australian tea tree exfoliating, Fruit wrap, natural whitening wraps etc. We also have Spa and French manicure and pedicure along with some Jet lag, oriental exotic packages. The signature treatment remains to be Aromatherapy. The services/ menu can be customized as per the client needs.

What's your Funding Status as of now?
We are functioning with a mix of all three:
• Share Holder Fund
• Private Equity
• Debts
Monetization model
• Sale of services to customers

What Challenges in the health and wellness Industry?
To have a spa chain up and running has many challenges. Across all cities and in each facility, we need to ensure we maintain our standards in all verticals (service, staff, interiors etc) so that our brand value is maintained.

Sourcing and availability of talent remains a core issue. This is all the more challenging as we are very particular in sourcing only professionally trained resources. Attrition is another huge burden… there is constant movement within the industry for as little as a difference in salary of say Rs 1000. At O2 Spa we have been able to curb this immensely by engaging and educating our staffs on the importance of stability and of having a vision to grow in their career. Pricing is another factor as each State/City/Town/Locality in this country is as diverse by any given definition. A service in Hyderabad would have to probably be priced way differently in Bangalore based on the location of the Spa and the demographics. Hence, maintaining a balance in service and pricing is quite a task!

What kind of Future Plans you have in mind for your venture?
We are looking at 150 outlets in India and 50 outlets in the Middle East by end of this fiscal year 2016. The current marketplace is expanding and innovative ideas are coming across every other day. We are keeping pace with the grown and subsequently new therapies and techniques would be introduced. We are also actively promoting our corporate wellness program which aims at benefitting the employees by giving them rejuvenating experiences sitting within their offices.
We will be investing USD 15 million to achieve our expansion plans.