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Although Western Europe, Asia Pacific and North America together account for more than 70% of sales in terms of value, manufacturers with plans for global domination need to look outside of these mature markets to realize the sector’s full potential. Forecast average annual growth of slightly more than 1% in Western Europe and North America to 2010 is smaller in actual terms than that predicted for Eastern Europe, Latin America and, especially, Asia Pacific, where figures are buoyed by China and India. Manufacturers keen to reignite growth should prioritize these markets.
Development in both Latin America and Eastern Europe since 2000 has been underpinned by the increased spending power of working women. Economic recovery and awareness of global fashion fads in Brazil and Russia also have helped create demand for more sophisticated products. Asia Pacific’s hair care performance has, until recently, been underpinned by Japan. China and India, however, are beginning to plug the gap created by the low-growth forecasts for Japan.
Although Venezuela has been the most dynamic market in terms of hair care sales throughout the past five years, Brazil, Russia, India and China are the individual markets of distinction—with dynamic growth resulting in sizable value gains. Looking forward to 2010, Brazil and China are set to sustain current growth rates, with average annual growth of 8% and 12%, respectively.
In Brazil, hair care accounts for more than 25% of the total cosmetics and toiletries market, and has posted double-digit growth for the last past years—in spite of relatively high penetration. This is largely due to the attention that con sumers pay to their hair. Washing hair twice daily is not uncommon in Brazil’s humid climate. Given that basic products are accepted by the vast majority of the population, manufacturers have stimulated demand by refining segmentation strategies: demographic group, hair type and treatment benefits.
Unilever’s relaunch of Seda (Sunsilk) indicates that the company is employing a mega brand strategy, offering products for all hair types, colors and seasons. Given that the aging population is at the forefront of government concerns, with forecasts that the number of Brazilians age 70 and older will rise from 7.7 million in 2004 to 34.3 million in 2050, hair care manufacturers could prosper by targeting this group specifically—as Unilever did with Sunsilk Aging Care in Thailand.