Housejoy embarks on new strategic plan; to focus on Beauty segment and boost profitability

Housejoy, the on-demand home services startup, is changing its business strategy, and now focusing on its “Beauty” segment along with optimizing its operations across the country. The startup has revamped its beauty segment, its largest category in terms of revenue with 30% share in the products portfolio, margins and service repeat rate. It claims its average order value in the beauty-services segment has jumped more than 100% to INR1,500, and the key to profitability in this segment is the optimum utilization of beauticians, transportation and material costs. Saran Chatterjee, CEO Housejoy, said that “Beauty as a vertical is so because this service important to us because this service is recurring. The demand for having the service at home is growing, especially in areas where salon density is not high”.

On the second leg, the startup is trying to reduce operational costs and move towards profitability. It has has reduced its workforce by 50% over the past one year mostly by pulling back operations in 7 out of 12 cities it had expanded to, and consolidating the other 5 cities. In a bid to improve profitability, it is further moving towards Beauty segment as it accounts for maximum profit margins too. The CEO explained the situation, and said that “Owing to the high fixed costs on overheads like transportation, material used, salaries to employees etc. breakeven and profitability in this segment becomes even more important for us. Beauty will be EBITDA level positive very soon once we cover shared costs like technology, marketing and other corporate functions”.