A Hair raising story -By Niraj Lalka
From coconut oil to conditioners and henna to hair colorants, Indian hair care market is undergoing a sea change in the way consumer nurture their hairs. A strong undercurrent is being observed in the Indian hair care market with consumers showing readiness in experimenting with new products and manufacturers showering consumers with new products and services. Latest Datamonitor product insight report Hair care in India too highlights the growing new product development (NPD) trends in the Indian hair care market. The report outlines rising income, increasing awareness, international exposure and massive advertising by the manufactures as important drivers for the growth of new launches in this market. Currently, according to Datamonitor, Indian hair care market is valued at INR 7000 crores (US$1625 million) for the year 2009. However, the excitement in the industry lies in its enormous untapped potential. Developed economies of the world such as USA, UK, and Japan etc. have per capita expenditure in the range of $25-$40 per annum. At per-capita-expenditure of less than $2, India lies behind even amongst emerging markets such as Russia, Brazil etc.
Traditional usage of hair oil for nurturing and hair styling makes it the biggest segment in the Indian hair care market. Due to this, Conditioner category (including hair oil) dominates the Indian hair care market with 48% share while Shampoo & Hair colorants form 38% and 11% share respectively. Styling and Perms & Relaxers category are still at a nascent stage and contributes only miniscule 3% of the hair care market. Due to its strong presence in hair oil segment, domestic player Marico with its Parachute brand leads the Indian hair care market with around 19% share. Unilever is the close second and controls around 17% share of the Indian hair care market. Dabur, Procter & Gamble, CavinKare and Godrej are other key players in the Indian hair care market.
Key trends in the Indian hair care market Changing consumer aspirations: Hair care, once an occasion based activity, has now become an integral part of Indian consumers daily beauty regime. With growing disposable incomes and increasing western influence, Indian consumers are not shying away from experimenting with newer or pricier products. This has created new opportunities for the companies in this sector. As a result, products such as hair styling creams & gels, post wash serums etc. which once were nonexistent in the Indian market are increasingly finding a place in the Indian consumers shopping basket. A shift towards natural/organic products: According to the new product insight report Haircare in India from Datamonitor, there is a growing preference towards product made from natural/organic ingredients amongst Indian consumers. Owing to such a strong demand, numerous personal care companies in India are introducing products that appeal to consumers who are keen to move away from conventional haircare products made from harmful chemicals. Increasing segmentation in haircare products: According to the latest report Haircare in India, due to increasing competition, manufacturers of haircare products in India have realized the pressing need to differentiate their offerings from other competing brands. This has resulted in greater segmentation in the haircare market. Increasing awareness among consumers has made manufacturers realize that a 'one size fits all' approach is no longer enough to attract customers. The demand for customized offerings has resulted in the emergence of niche segments in the Indian haircare market, such as products which control dandruff, hair loss and thinning, products which offer protein enrichment or hair softening properties
Product Launches in the Indian hair care market According to Product Insights: Haircare in India report from Datamonitor, In 2009, India witnessed over 200 new product launches. Most new product launches occurred in the shampoo category, which accounted for nearly 45% of all new offerings, followed by conditioners and styling agents which collectively accounted for over 40% of launches in 2009. Hair colorants accounted for over 10% of new launches and this figure is expected to increase in the future, due to a steady increase in Indias young population. The least number of new product launches took place in the perms and relaxers segment, which made up just about 2% of all new launches. This is primarily because such products target a very niche segment of the population and are yet to find favor with the masses. When compared globally, India, with a share of 3.0%, ranked eighth in terms of new product launches in the haircare market. This relatively low rank belies the potential that India holds for haircare products. However, as disposable income continues to rise and beauty consciousness continues to grow among men and women of all age groups, an influx of new products is expected in the future. While the penetration of specialized haircare offerings is still low in India, as product awareness and industry development improve, consumer interest, particularly in rural India, is bound to increase significantly.
The following table from the report Hair care in India lists the top 10 players in the haircare market in terms of market share as well as the number of products launched in 2009.
Future Outlook: Apart from traditional hair oil products, Indian hair care market remains largely under-penetrated with large part of consumption still driven by urban consumers. However, manufacturers are increasingly focusing on driving their sales from rural and semi-urban areas by using sachet strategy and inducing consumers to experiment with new products. Hair colorant market is one developing area which is showcasing enormous potential for the manufacturers. There is a huge demand for hair colorant products from consumers through both professional salons as well as retail channels. Currently, local players Godrej Industries control majority of the Indian hair colorant market while companies such as Loreal and P&G are launching their global product portfolio into the Indian market. Increasingly Indian consumers specifically women are becoming more aware about the global trends and are more willing to spend on their hair grooming. Today, women consumers do not mind shelling out extra money to buy international brands which give their hair that value-add treatment. However, even male consumers are becoming as self-conscious as their female counterparts and are increasingly indulging in hair styling. Hair creams & gels have become a phenomenon amongst the Indian males who wish to wear a new hair look every day. Here again, local player Godrej with its Brylcreem dominate the hair styling market. However, increasingly companies such as Unilever, Paras Pharma and Marico are launching their products to tap this nascent but fast growing hair styling segment. With growing awareness and rising income, Indian consumers are moving up the value chain in the hair care segment. Indian hair care market would continue to see upward growth trajectory driven by strong demand from aspiring consumers. Companies in this industry need to increasingly focus to meet demand from the evolving consumers who are now looking for more specialist products to meet their specific needs.
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Article by Niraj Lalka, Senior consumer Analyst, based on inputs from Datamonitors latest report Product Insight: Hair care in India. For further information on this title, please contact Aartee Sundheep on +91 40 6672 9586 or asundheep@datamonitor.com.
