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Hair Care Lacks Luster

By: Briony Davies, Euromonitor International
Posted: October 7, 2008, from the August 2007 issue of GCI Magazine.

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While global brands continue to dominate the hair care environment, local companies can have an advantage, particularly in emerging markets. In Asia-Pacific, for example, a growing sense of nationalism and cultural identity is tipping consumer preferences in favor of locally produced goods. This move is exemplified by the “Japanese women are beautiful” campaign to advertise Shiseido’s new Tsubaki hair care line. In South Africa, where the emerging black middle class is increasingly demanding sophisticated products designed specifically for African hair, locally owned Amka Products— with brands such as Sof ’n’ Free, Easiwave and Black Like Me—ranked third in 2006. Western companies are working to tap into this trend by launching products better suited to ethnic hair types. In South Africa, L’Oréal sells under brands such as Dark & Lovely, and Unilever’s Sunsilk is segmented by ethnicity with lines for both South Africa’s Caucasian and black African consumers.

While global megabrands may address universal tastes and promise consistent quality, it seems likely that the major multinationals will retain a portfolio of international and local brands to satisfy both global and international tastes. This strategy will prove particularly important for manufacturers looking to succeed in both developed and developing markets. By professing expertise in Hispanic hair, straight hair, long hair and so on, megabrands also run the risk of losing credibility due to overextension. Niche brands that may span the entire hair care spectrum but target only one consumer segment may also increase in popularity as a more effective, specialized option to overstretched megabrands.

Countering Salon Competition Crucial

Salons are providing strong competition to at-home hair care products, particularly in the mature markets where consumers are more affluent and are willing to spend more money to achieve the perfect hair style. Perms and relaxants suffer most from this source of competition, with many consumers preferring to leave such tasks to the professionals where they pay for the convenience and perceived superiority of the results. Colorants are also beginning to feel the bite in developed markets, declining every year between 2001–2005 and achieving only a marginal recovery in 2006. Consumers are also proving increasingly willing to trade up to commodity products such as shampoos, conditioners and styling products sold through the spa channel.

To beat back the competition, manufacturers of at-home hair care products are developing products that are as easy to use and as effective as salon brands. Alberto-Culver’s success in this area with TRESemmé in the U.K. and Nexxus in the U.S., illustrates that this strategy enjoys high credibility among consumers by offering what is perceived as premium hair care at affordable prices. Hair care manufacturers could also go beyond the focus on efficacy and tap into the popularity of pampering spa treatments by launching at-home alternatives. Examples could include massaging shampoos and conditioners that both relax and de-stress the consumer while also offering improved efficacy such as deeper penetration of moisturizers and other nourishing ingredients.