The beauty industry stands at a behemothing market size of 483 $billion today, out of which the
hair care sector leads with a share of 77 billion dollars with an annual compounded growth rate
of about 5% globally.
CURRENT ECONOMIC DRIVERS OF THE INDUSTRY :
Product innovation is a leading marketing driver - Furthermore, the rapid adoption of 2-in-1
shampoos and conditioners, intended to clear the scalp and make hair soft and silky, across the
Asia-Pacific region is expected to fuel the overall market in the future.
The increasing internet penetration and push of e-commerce companies to attract consumers is
driving the sales from e-commerce in the Asia-Pacific region, while sales from the physical retail
channel continue to dominate the market.
Further, a rapid shift towards online channels was seen, as the retail stores
were closed. According to L'Oréal's 2020-annual-results published in
February 2021, the company’s sales increased by 62% for e-commerce across
all divisions and all regions, accounting for about 26.6% of the total company’s
sales for 2020.
● In 2020, Dabur launched eight new products to its baby care portfolio, with a unique
formulation of enriched ayurvedic herbs without any harmful chemicals. This product
range includes Dabur Baby Shampoo, which offers benefits of different herbs, like
hibiscus, gooseberry, and aloe vera, to provide gentle hair cleansing.
● In 2019, Procter & Gamble Co. announced its new retail hair care brand, the WATERL
SS hair care collection. It caters to different hair care needs of all women without using
any water, and it includes an ultra-lightweight foam dry shampoo and a residue-free dry
shampoo spray.
● In 2019, Reload Beleza Positiva, a Brazilian haircare company, reused plastic mineral
water bottles to pack shampoo. Its shampoo products are all-natural, vegan, and sulfate-
and paraben-free, developed by Givaudan
● January 2021: St. Botanica introduced 'GO Colored Purple Shampoo'. The ultimate
premium go-to haircare collection consists of the absolute must-have for bleached hair -
GO Purple Shampoo. It is created explicitly for bleached and blonde hair, and it is a
formulation of Linseed Oil, Purple Mica, and Sunflower Oil that effectively helps in
maintaining the colour-treated hair in the long run.
● October 2020, Procter & Gamble Co. launched its new 100% reusable aluminium bottle
and refilled pouch across its haircare brands. The refill pouch has been made using 60%
less plastic and is recyclable. The new packaging system is part of P&G’s commitment to
reduce the use of virgin petroleum plastic by 50% by 2030.
Rise in Demand for natural hair care stuff
Because of rising incomes, consumers increasingly consider effectiveness and ingredients over
price. Rising disposable income and increasing scalp and hair problems
globally drive the market growth significantly. For example, according to the
International Society of Hair Restoration Surgery, hair loss is widely affected
to the all age group as they grow older. Thus, demand for hair care products
and services is likely to increase at a rapid pace over the future period.
Ethnicity isn’t the only driver, age plays a critical role in how consumers shop
for personal care products.
To win in the fight over product superiority comes from the marketing use of three little words:
natural, organic, or clean.
But, “clean beauty” and “organic makeup” are more than just buzzwords. The global value for
natural cosmetics is expected to reach $54.5 billion by 2027.
Hair color products are receiving value among different age groups globally. The key reasons for
this growth are the general hair damage and hair color problem. Hair oil market is growing
significantly due to the consumer's preference. Consumers has shown interest towards hair oil
market due to its benefits which includes strengthening hair, nourishment, faster and better
growth and reducing the problem of falling hair. In addition, consumers in North America and
Europe uses hair oil as a hair treatment or scalp treatment product. Asia Pacific has the largest
consumer of hair oil in the world. Rising disposable income and increasing scalp and hair
problems globally drive the market growth significantly.
In recent times, demand for personalized skincare, hair care is promoting
manufacturers on introducing personalization and digitalization in cosmetic
products to increase customers. For instance, in February 2020, L’Occitane
Group announced the launch of its new range of personalized range called
Duolab. The range has a countertop device that functions artificial intelligence
(AI) technology. This device helps in finding out one’s skin condition to provide
it a face care solution in the form of freshly blended cream. Therefore,
increased awareness regarding grooming coupled with technological
advancements is expected to support the cosmetics market growth in
upcoming years.
A LOOK INTO THE GLOBAL SCENARIO
By geography, the market is dominated by North America followed by Asia Pacific and Europe.
Regionally, North America and Europe record the highest revenue share, captured above 50%
collectively. Due to the relatively low barriers to entry, the hair care industry in these regions is
highly fragmented and a number of key companies are investing increasingly to capture large
customers. Furthermore, the presence of international incumbents holding a strong position
within the consumer products markets in the Asia Pacific and Europe support this regional
growth to great extent. The Asia Pacific region is anticipated to grow with the highest CAGR
owing to the diverse product range offered by the leading market players.
China is the second-largest market for hair care products worldwide, only after the United States.
In the Asia-Pacific region, the country holds the largest market share and is expected to hold its
position during the forecast period, thus further increasing the demand for hair care products in
the overall Asia-Pacific and further increasing the potential of Asia-Pacific to become one of the
largest markets of hair care products over the next five to ten years. The usage of premium hair
care products is most prevalent in tier one megacities, with increasing penetration in China’s
inland tier two and tier three cities. This is further likely to increase with the growing middle
class and consumption of consumer products. Increasing urbanization & standard of living,
growing number of working women, and rising middle-class population are the key contributing
factors for the growth of the market in this region.
North America on the other hand is expected to witness positive growth owing to the rising
disposable income and high spending power of the population in the region. Additionally, an
increasing number of beauty product stores in the region is also one of the major flourishing
factors for the growth of the market during the forecast period. For instance, in February 2020,
one of the largest cosmetics retail store Sephora announced its expansion plans, that included the
opening of around 100 new stores across the North America region by 2020.
REGIONAL INSIGHTS
Europe stood at USD 27.09 billion in 2020 and is likely to be one of the leading continents. This
is due to the presence of a highly beauty-conscious population that will boost the adoption of hair
care products. For instance, as per the data released by the Health & Beauty Associations, the
sale of hair conditioners witnessed a rise from USD 334.0 million in March 2018 to about USD
341.59 million in March 2019 in the U.K. Besides, the thriving growth of the hairdressing and
beauty salon business is estimated to play a vital role in the growing demand for the product. For
instance, the data issued by Europea. Eu declares that Europe has 1.7 million people aged 15 and
above to be employed as a hairdresser and beautician.
North America is anticipated to experience a significant presence in the market owing to the high
expenditure made on personal care, including hair-based products. For instance, the data issued
by the Consumer notice.Org in July 2020 mentions that Americans are evaluated to make an
expenditure of tens of billions of dollars to enhance hair, skin, and hygiene. Furthermore, the
increasing growth of female employment is anticipated to boost consumption as women are
willing to spend more on hair care products. For instance, the data published by the World
Bank.Org, the female labor force participation rate in the United States is 56.76 percent which is
a rise from 56.39 percent from its prior year.
Asia Pacific is expected to hold a vital market share. The countries in this region experience
intense air pollution leading to the regular cleansing of hair. For instance, the data issued by the
Climate and Clean Air Coalition.Org on Air Pollution in Asia and the Pacific 2019 mentions that
approximately 4 billion people are witnessing levels of air pollution that pose a significant risk to
their health. Furthermore, the booming growth of spa businesses is likely to aid in adopting the
hair care product in the region. For instance, the data published by the Economic Times in
January 2018 states that the Sap businesses in India are valued at USD 1,719.89 million.The
regions analyzed for the Asia-Pacific regions are China, India, and Japan, South-Korea,
Thailand, Australia and the rest of Asia-Pacific. A rising middle-class population with high
disposable income along with increasing number of fashion-conscious users in the region are
propelling the growth of the market.The beauty and personal care industry in the Asia-Pacific
region is witnessing tremendous growth, attributable to an increasing number of beauty-
conscious consumers, particularly in countries like China, Japan, Thailand, and South Korea.
The hair care regime is an important aspect of their everyday life. For example, the Chinese
population considers shampoos as an essential hair care product, which is intended to keep the
moisture balance of the hair. Additionally, in China, the demand for anti-hair fall shampoo is
growing at a fast rate, mainly attributable to the high-pressure life and increasing pollution
levels.
Asia Pacific dominated the global hair shampoo market in 2020, due to increase in spending on
hair care products in the region. Increasing environmental pollution has been driving the hair
shampoo market in Asia Pacific, particularly in China, Japan, and India.
Increasing demand in the emerging countries of the Rest of the World and Asia Pacific regions
due to population growth and greater disposable income has bolstered the industry’s growth.
Lucintel’s study indicates that growing demand for private label products and intense
competition can reduce the sales volume and hamper the global market as well as the total
revenue of the industry. The global economic slowdown and vague recovery scenarios are likely
to create challenges for the industry over the next few years.
South America is evaluated to display a crucial presence in the market due to the booming
growth of the urban population, helping to intensify the number of people giving importance to
their hair care maintenance. For instance, the data released by the World Bank.Org, the urban
population of Latin America and the Caribbean is 522 74 million in 2019.
The Middle East & Africa is expected to showcase considerable growth as several countries are
witnessing an escalating economic development that has helped foster the consumption of hair
care products. For instance, in the data published by Trading Economics, Nigeria's GDP per
capita income is assessed to be USD 2,386.90 in 2019, which is equivalent to 19 percent of the
global average.
Analysis of the Indian Hair Care industry using Porter’s 5 forces Analysis :
MARKET DRIVERS :
Indian Hair Care Market is forecasted to reach USD 4.89 billion by 2025 growing at a CAGR of
6.58% during the forecast period (2020 - 2025).
● The changing consumer dynamics, coupled with increasing product awareness, has
been identified as the major driver of the market. These changes are majorly due to
high millennial population, migration towards cities, and rising women employment.
● Focus on the premium sector has been identified to grow among the urban and youth
population with consumers willing to spend a decent amount on products offering
faster results. Products designed for focused hair types are gaining popularity among
users, with companies now focusing on products rich in active ingredients.
● Frequent complaints of post covid-19 hair loss have been flooding social
media, prompting consumers to turn to preventive hair care products and home
remedies. Now, a study by Mintel, a London-based market research firm,
points to growing consumer interest for products such as anti-hair fall
shampoos and hair supplements.
● Mintel’s latest research states that 53% Indians are interested in hair fall
prevention and more than half the Indians lean towards healthy hair claims
when taking beauty supplement products. In fact, 52% Indians who faced hair
loss or damage in the last six months, addressed the issue by consuming
multivitamin supplements.
●
● Meanwhile, emerging direct-to-consumer brands have also been offering more
personalized hair care products such as serums, masks and oils targeted towards
specific hair problems.
● Mintel says companies can look at launching more distinct products in various
formats to capitalize on emerging demand.
Overall competition :
Hair care Cosmetic market in India is highly competitive with active vendors
offering multiple products across the various product categories. Companies
such as P&G and Hindustan Unilever have established a presence with
considerable product portfolio being offered at varying price points.mong the
various active players in the hair care industry, Hindustan Unilever continues
to be among the leading players. Some of the key players in India hair care
industry include L’Oreal, Himalaya Drug Company, Procter & Gamble,
Hindustan Unilever, and Patanjali Ayurved.
