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Brazil's Salon Hair Care Market Lagging

By: Sérgio Rebêlo
Posted: August 25, 2011

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The hair coloring category—boosted by a rising number of consumers (men and women) who look for fashion-guided, color alternatives, as well as to cover gray hair—dominates the market with a share of 37%. Conditioners come in second place with a share of 32%, followed by shampoos with a 19% share. Sales of shampoos and conditioners as a package or so called "systems treatment" have been increasing.

As fashion has lately dictated a straight hair look and many Brazilian consumers have curly hair, straightening and perming is the fastest growing category, accounting for a 9% share of the market in 2010. A number of techniques and formula to straighten hair have popped up in recent years, many with claims to be harmless to the hair. On the other hand, perm products are slowly coming back, claiming to produce soft curls and bounce, which add charm and grace to the hair. Modeling/hold, finishing, leave-in products and sprays account for a 4% share in the Brazilian market. Use of products with the ability to shape hair (gels, wax and mousses), which are also included in this category, has been on the rise, mainly by men.

Hair Salons as Sales Channels

Nearly 80% of the sales of salon hair care products in Brazil account for products used in salons by professionals (also called "back-bar" sales); the other 20% are products sold by the beauty hair salon to their clients ("take-home" sales). Hair salons, as a consumer sales channel, is still a niche channel that needs to be better explored in Brazil. In the United States, on the other hand, the market is divided 50/50 between “take-home “and “back-bar” products. This difference is, in part, due to the profile of the Brazilian beauty hair salons market. In Brazil, the hair salon business is still, for the most part, the result of an economy of subsistence. Relatively speaking, very few salons are professional, licensed businesses, although this has been slowly changing.

It is estimated that there are around 400,000 beauty hair salons in Brazil, of which only between 120,000 and 150,000 are formal establishments. Most of the enterprises are very small, not very professional, and still in need of proper management and capital. They are focused on services, very rarely exploring the potential for selling products. In a survey conducted by Factor de Solução (the Latin American affiliate of The Kline Group ), hairdressers recognize that this is a latent opportunity, and they point out some impediment for the development of such policy:

  • High price of products (when compared to those available in traditional retail channels);
  • Inadequate portfolio to offer their clientele;
  • Lack of training/qualification/experience of professional hairdressers to sell products;
  • Lack of structure or adequate space to show products, among others.

Thus, the specialized retail of hair products in hair salons remains viable for only a small number of establishments (the more structured, professionalized and capitalized ones) that cater to customers with a higher buying power. Among such establishments, one can often find the famous hairdresser/celebrity stylist who change the way clients visit salons, and who are usually associated with commercial partners. However, even in such cases, it is still quite a small amount of businesses generated by sales of hair care products to customers, which barely reaches 30% of total sales.