Supercuts, Watch Out! – Hear Comes India!

This weekend I reached a fork in the road. Do I risk being mis-identified as the late Kurt Cobain or do I get a haircut? I was seriously tempted by the former, but in the end I decided on the latter course of action. But where to go? India does not have Supercuts. After extensive research (a few minutes on the local search engine called http://www.justdial.com/, looking for a place I could sneak off to during work) I settled on the AirCool Salon, and all I have to say is Supercuts better watch its back.

AirCool was great; the ambiance, the service, and particularly the price. I entered AirCool to find a dozen barbers dressed in white working on customers seated in antique wooden barber chairs. I was seated in a vacant chair and was presented with two options for my haircut; trim or short. I went with trim, erring on the side of caution. Despite my apprehension, the haircut turned out great and included a couple interesting extras that you won’t find in the US; a vigorous post-cut head rub/massage, and a water-bottle spritz in the face followed by a toweling off.

The most amazing part, though, was the price. My haircut cost $1.49 (70Rs) at today’s exchange rates. Compare that with the inferior experience at SuperCuts for $15 and you are talking a serious labor arbitrage. I spent a couple minutes thinking about whether I could somehow load these guys into a shipping container and send them to Boston before abandoning the thought. But my haircut experience is a good analogy for the labor cost arbitrage for more portable services that is at the center of the Indian Outsourcing boom. A top software engineer in India gets paid $20K a year while in the U.S. the going rate is over $100K. A call center employee makes around $3K a year while in the U.S. minimum wage laws make it impossible to pay even the most useless phone automatons less than $30K a year. The appeal of outsourcing is obvious and everyone in the U.S. providing services that are “outsourceable” better watch out. Thankfully, management talent, like haircuts, is still not easily transportable, yet. But it is only a matter of time before that metaphorical shipping crate arrives, and when it does you better not be holding the scissors.