Drivers and Opportunities in the Global Hair Care Market

The Euromonitor International Podcasting Service recently shared the thoughts of Euromonitor home, beauty and personal care senior analyst Oru Mohiuddin on what’s trending in hair care. In the audio of “Emerging and Frontier Markets Drive Global Hair Care Growth,” Mohiuddin explains how industry drivers such as emerging markets and hair care segmentation are pushing hair care growth. She also expands upon how trends in underdeveloped hair care areas are bringing new opportunities in hair care in the global market.

Mohiuddin says, “Hair care globally experienced a slight slowdown in 2013. Growth weakened from 5.5% in 2012 to 4.9%. This is line with the decelerated base of growth in the overall beauty industry. However, hair care was comparatively more robust than some of the other, [typically] more vibrant categories such as skin care and color cosmetics. Increasing penetration in emerging markets and a surge in innovation have helped hair care to better withstand current market challenges.

“The usual markets of China, Brazil and India contributed to the growth [of hair care] in 2013, but new frontier markets such as Turkey, Indonesia and Iran also recorded strong gains, mainly on account of increasing penetration of shampoos. In Turkey, Indonesia and Iran, consumers have been trading up to more premium and sophisticated Western brands, thanks to rising disposable income, as well as the wider availability of foreign brands.

“India is an interesting case, as growth has been propelled by rural areas, which account for two-thirds of India’s one billion-plus population. Consumers in rural India are gradually warming up to Western-style hair care regimes, replacing soap with shampoo.

“Brazil, however, formed the most perspective market, as it accounted for 20% of global hair care growth in 2013—this being the largest contribution of any market. An interesting development in Brazil is the growing competitive challenges from local players, which have been gradually developing greater sophistication across all hair care categories. Furthermore, a Brazilian preference for local brands, combined with these brands’ competitive pricing at a time of rising macroeconomic challenges, has been providing local players with the necessary competitive edge. Multinationals could address these challenges by introducing more advanced and sophisticated from their portfolios in the Western markets. Of particular benefit would be keratin shampoos and conditioners, which claim to straighten hair.

“While emerging markets are the focal point for future growth, developed economies also play a key role in hair care as these markets account for 50% of the global category. The issue, however, is that developed markets have reached a high level of maturity, and growth can only be induced by means of breakthrough innovations.

“Manufacturers have aimed to drive growth by introducing products inspired by other categories—mainly skin care and color cosmetics. Hair care has become more performance-driven, motivated by efficacy claims in skin care. Some hair care launches have also aimed to emulate the excitement of color cosmetics.

“An important question going forward is, ‘What level of sophistication are these markets likely to witness?’ While hair care has been successful in better targeting specific hair care needs, there remains some untapped areas. For example, products for gray hair remains a largely unexplored area. And even though there have been launches to address hair loss, this also continues to be an underdeveloped category.

“Going forward, innovation is expected to be driven by increasing segmentation, targeting less-explored hair care concerns with even stronger scientific claims,” Mohiuddin concludes.

Read more of Mohiuddin's analysis of the current state of the global hair care market and where it's headed in this article from the June 2014 issue of GCI magazine.

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