No wonder, therefore, that the number of local and international businesses operating hairdressing salons has mushroomed in recent years to an estimated current 100,000. Many industry analysts believe this represents the saturation point, even though the service sector as a whole is expected to grow by 6.1 percent per annum through 2008.
Two of Taiwan's largest chain operators, Mentor and Show Lin, have competed with each other for more than 30 years. The first of these was founded in 1966 as the Shanghai Mentor Women's Beauty Salon by Lai Shiao-yi, the son of a Miaoli County farmer. Lai had learned his coiffure from a master hairdresser from Shanghai, hence the original name, which was subsequently changed to the Mentor Hair Styling Beauty Salon. Lai opened his second store in 1978, thus launching the development of Mentor's international chain of salons. Ten years later it owned 50 stores islandwide, and by 2005 more than 300 in Taiwan, as well as 30 in China and two in Canada. With further expansion planned, the company aims to have more than 1,000 salons worldwide by 2010.
This process has also seen Mentor diversify its target market, using the sub-brand names Mentor Hair Salon, Mr. Barber Hair Salon and air Hair Salon to target general customers, males aged 40 to 50, and teenagers, respectively.
Fang Jhih-lin, who founded Show Lin, was also apprenticed to a master coiffeur from Shanghai. According to Show Lin's promotional materials, Fang set out to transform the stereotypical hair fashions popular in Taiwan's conservative society of the 1970s, indeed, to transform the entire industry through a chain of hair salons, the first of which was launched in 1975. With 280 shops islandwide, Show Lin is now Taiwan's second-largest operator.
Despite their similarities, these two chain operators have adopted different management strategies. Debra Lai, who took over her father's enterprise in August 2005, adopted a U.S. management style that even differs from his previously traditional pragmatism. "For the service sector, the biggest competitor is not those engaged in the same business but the customers themselves," Lai said, emphasizing the priority she places on the quality of her employees. Comparing them to the software of a computer, Lai explained that, when the hardware facilities of all hair businesses are similar to each other, the key element is the employees.
Lai therefore paid attention to Mentor's enterprise system and its training programs. Its enterprise culture, for example, differs by focusing on teamwork and profit sharing. For each store opened, Mentor provides 30 percent of the investment, with the salon's owners and designers contributing the remainder. By doing so, Lai believes the shop owner and designers feel more committed and will work more industriously for their own business than they would for others'. Winnie Chen, manager of Mentor's marketing department, said that what sets the company apart from others is that "We encourage our employees to open their own shops."
In addition to this sharing of profits with its employees, Mentor places stress on the need for integrated training. Traditionally, the hairdressing industry had a reputation for predominantly employing people with little education. To counter this, Lai said, "We cooperated with several vocational schools to arrange courses for our employees and regularly invited foreign designers to give lectures so as to gear our designers' quality to the world standard."
Show Lin's model of management differs in that all the chain's stores are supervised by six departments centrally staffed within its headquarters. Explaining this in an interview with local media recently, Fang joked that it perhaps made him "the president with least power and responsibility." He further described the separation of management responsibilities to different departments as the intention to "plant seeds and let them sprout."
Alan Cho, hair designer and owner of Alan Hair Salon in Taipei's Wenshan District, stressed the priority of software--the service offered to customers--over hardware--such as trendy decor, new facilities and imported but not necessarily expensive materials--for individually owned salons. "Given the high turnover rate in the hairdressing business, the key point is whether you can make customers feel they are getting a service worth more than the amount they pay for it," Cho said.
In emphasizing the significance of the service, Cho said that around 90 percent of his clients make reservations. "Through advance appointment, I have adequate time to completely serve one customer at a time, rather than having to rush to serve one after another or keeping them waiting so long," he noted. Offering integrated and customized service is, in Cho's opinion, the biggest difference between owner-operated hair salons and chains. It also creates an important niche that enables them to tap what appears to be an over-crowded market.
Differences can also be found in terms of marketing strategy. According to Lai, thanks to the dedicated efforts of Mentor's founder, the market leader has a solid foundation based mainly on middle- and high-salary customers. Consequently, Mentor focuses on offering diverse services to keep ahead of the competition rather than trying to undercut others' prices. She says that Mentor was, for example, the first company in the country to provide shoulder massages service during the shampooing process, as well as the first to offer essential oil scalp massages. "Inspired by our experience, Japanese hair salon businesses started to offer the similar service recently," said Lai. This, she added, shows that Taiwan's hairstylists have not only caught up with world trends, but also sometimes take the lead.
While Mentor focuses on the unvarying quality of its service, Show Lin, like many chains, offers discounted prices during holidays to promote itself. Alan Hair Salon sends text messages via mobile phones to inform loyal customers of its latest promotions and to keep in touch if they have not visited for a while. The store also offers what it calls an "after-sale service," in which customers are encouraged to return and talk with the stylists about their changed appearance. "What we offer is a set of complete services, from consultation in the beginning, selection of suitable materials, to afterward satisfaction survey or further alteration," said Cho.
As for future developments, Lai says "Our first priority is to continuously renew the image of our decades-old brand." Moreover, Mentor is not satisfied with its "No.1 in Taiwan" title and is looking to expand its overseas activities to more countries. Nevertheless, Lai notes that "Although ambitious about expanding, we still adopt a more pragmatic attitude, as my father insists all the time."
As for Alan Hair Salon, Cho admitted that his hobby of painting has a positive influence on his job, saying that "It's probably because I paint that I pay particular attention to details, for example, about which hair color matches a client's personality, or which hairstyle embellishes the shape of a client's face." Cho is currently planning to open a second salon in Taipei City to give a platform to those employees who have successfully mastered the coiffeur's art. Value-added quality service will remain the universal principle in his shops, he added.
Given the huge number of hair salons throughout the island, finding a niche and maintaining it is probably the only route to success.