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From the Roots Out

By: Priyanka Bhattacharya
Posted: May 1, 2008, from the May 2008 issue of GCI Magazine.

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Tradition Sells
“While there is a growing consciousness about different types of hair care products and their usage, most Indian men and women still stick to their traditional hair care routine,” says Vikas Mittal, vice-president, marketing for personal care, Dabur India, one of India’s largest ayurveda-based hair care product brands. In fact, the Indian consumer is partial to anything labelled “herbal” or “natural.”

This means that domestic players have an edge in the Indian market, especially in the high concentration, tier two markets and rural areas. Seven of the top 10 players in India’s hair care market are homegrown and account for 42% of total value sales.

Herbal shampoo brands such as Chik and Nyle are strong competition for the big-name international labels—including Ultra Doux, L’Oréal brands, Dove, Sunsilk, Head & Shoulders and Pantene. “Since consumers still prefer natural-based products over chemical-based products, our premium-mass hair care brand Vatika is leading the hair care market in the country,” says Mittal.

Indian consumers have a unique pattern of consumption that affects demand of hair care products. Unlike in the West, hair oils make up the largest hair care segment. While shampoos are growing at a fast rate, hair oils are showing a 15–20% growth year-on-year. This segment currently has 90% market penetration, compared to other product segments, and the Indian hair oil market stands at $500 million. The reason: hair oils are still considered as the best conditioner, and it is hair oil sales that are responsible for the fact that the conditioners sector accounts for more than half of India’s total hair care market. The success of hair oil products such as Marico’s Parachute, Dabur’s Vatika and Amla brands has prompted Garnier to introduce special pre-wash hair oils under the Ultra Doux brand specifically for the Indian market.

Brand Presence
The Indian hair care market is split into three distinct price-determined tiers. The top-end includes Unilever’s Dove, P&G’s Pantene and Head & Shoulders, HLL’s Sunsilk, L’Oréal’s Garnier Fructis and Dabur’s Vatika. Average price points in this segment range from $2.80–8.75 for 250 mL bottles. While L’Oréal and Dove are at the top of the heap, Pantene and Head & Shoulders occupy the next rung of pricing, followed closely by Sunsilk, Vatika and Garnier Fructis constituting the bulk of the market. HLL’s Clinic Plus, Garnier Ultra Doux, and P&G’s Rejoice are at the mid-level ($1.50–2.00 price points for 200 mL), while low-tier brands include Ayur and Chik.