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Hair Care: A Push/Pull Market

By: Alexander Kirillov
Posted: May 1, 2008, from the May 2008 issue of GCI Magazine.

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Ethnic Segment Puts Shine in Sales
Ethnic hair care has become an important new catalyst of innovation, enabling manufacturers to tap into under served consumer segments within the more mature markets, while also giving them leverage in emerging markets. L’Oréal established an ethnic hair and skin research center in 2003 to develop ethnic brands such as SoftSheen and Carson, creating new relevant products for the global market.

South Africa, as the second largest ethnic hair care market after the U.S., has become a particular target for such innovations. L’Oréal’s Dark & Lovely is the number one hair care brand in South Africa, holding a 9% market share. Unilever is also working to increase its presence in the country by extending its Sunsilk brand with ethnic variants, while P&G and Kao Brands are pushing into the premium segment with salon brand Wella Professional and prestige label John Frieda’s Frizz-Ease, respectively.

At $1.1 billion, India is a far smaller prospect than the developed Western markets, and comes in behind the other BRIC markets of Brazil, Russia and China. However, with India’s enormous population, it is little wonder that P&G has turned its attention to this challenging market. The Pantene, Head & Shoulders, and Rejoice brands form the cornerstone of P&G’s expansion plans, although reaching India’s rural areas that account for nearly 70% of the population and encouraging a higher hair wash frequency than the twice a week that is the current norm will be the real keys to unlocking success in this market.

The ethnic hair care market does not just open up opportunities for new brand extensions, it also drives growth in smaller or less buoyant sectors, particularly conditioners and relaxants. In South Africa, conditioners make up the largest hair care sector, not shampoo as in most other markets, and in 2006, Unilever saw the potential of the perms/relaxants market with the launch of the Sunsilk Relaxer line, offering products based on hair type. In the U.S., the conditioners sector was the fastest growing sector 2001–2006 and one of two to achieve real growth during that period.