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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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However, it is Latin America, Eastern Europe and Africa/the Middle East—the three regions consisting predominately of emerging economies—that are the real growth engine of the global hair care market. Together, they contributed more than 60%, or more than $7 billion, of absolute market growth 2002–2007. Both Latin America and Eastern Europe’s double-digit annual growth rates and strong forecast are still optimistic, especially in Latin America. In both regions, shampoos and colorants are the two big sub-sectors contributing strongly to total growth.

While conditioners demonstrated double-digit growth in both regions, they are still underdeveloped in Eastern Europe, where they account for only 8% of the total hair care market, compared to Latin America, where the figure is 30%. In the next few years, conditioners will remain one the fastest-growing segments in both regions and in the global market overall, outperformed only by salon hair care in Eastern Europe.

Hair Treatments Exhibit Strong Growth in BRIC
Shampoos represent the largest portion of the global hair care market at $17 billion in 2007, according to Euromonitor’s research. The sub-sector demonstrated greater than 7% annual growth at a fixed USD exchange rate 2002–2007, driven by fast penetration rates in emerging markets and a high level of segmentation in developed countries. The segment is highly concentrated and dominated by P&G, Unilever and L’Oréal, which accounted for more than a half of the market in 2007.

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Conditioners have been the most dynamic sector of the global hair care market in recent years, growing at almost 9% a year. Half of the growth is from the BRIC countries. Brazil provided more than 40% of the growth in absolute terms, driven by high demand for hair treatments. Brazilian women are willing to pay for combing creams, masks and other treatment products that offer features such as smoothness, shine, protection for colored hair and anti-frizz action. Manufacturers have responded to this consumer demand by offering deep-conditioning treatments.