Haircare - China - June 2012
“Over the last two decades, China’s hair care market has grown into one of the world’s largest, but is now experiencing smaller digit value growth, despite the continued rapid economic growth of the country. Historically, shampoo has dominated this market, both in terms of value sales and also in levels of penetration and frequency. However, it is now a mature category displaying the lowest rate of growth. The hair conditioner and treatments categories are in contrast, developing very quickly, and are playing an increasingly important role in the daily hair care regime. Hair colorants and styling agents have put in an unremarkable performance in recent years."
– Jiang Xinyi—Research Analyst
Some questions answered in this report include:
- How can brands and manufacturers make the most of the growing interest in scalp care products which are beginning to dominate China’s hair care industry?
- Would an improvement in consumers’ confidence in hair care products motivate more spending?
- What are the opportunities for growth in China’s premium hair care segment?
- What are the opportunities for local small brands and new players in this current crowded marketplace
Over the last two decades, China’s hair care market has grown into one of the world’s largest, but is now experiencing smaller digit value growth, despite the continued rapid economic growth of the country. Historically, shampoo has dominated this market, both in terms of value sales and also in levels of penetration and frequency. However, it is now a mature category displaying the lowest rate of growth. The hair conditioner and treatments categories are in contrast, developing very quickly, and are playing an increasingly important role in the daily hair care regime. Hair colorants and styling agents have put in an unremarkable performance in recent years.
The impact of rising income and increased health concerns in China, has seen the hair care industry move its focus from providing simple hair care to include those which deliver on scalp health: consumers appear to be paying more attention to scalp care products, perceiving that they enhance hair beauty and wellness. Products with natural ingredient are also currying favour amongst Chinese consumers, following a deluge of product safety scandals. Natural products are subsequently trusted to minimize consumer exposure to chemical ingredients and any harmful substances.
The premium hair care segment is developing at a faster rate than ever before, benefiting from the growth in China’s middle class, and their burgeoning desire for more sophisticated products. However, at present, most high-end brands and products are lacking in USPs and brand identities, which makes it difficult for consumers to distinguish them from other products in the mass-market. By creating unique selling propositions, high-end hair care brands and products will be able to assert a clearer position in the market and better exploit their premium pricing.
Even though the current market is quite crowded, there are still gaps that exist between consumers’ needs and the products that are currently available; diversification therefore offers an opportunity for local small brands and new players in the market, who are being squeezed by the sway of the foreign giants. The retail channel also offers opportunities for products to add value through the better targeting of consumer groups. Department stores and hair salons represent channels that are synonymous with luxury and expertise, and are therefore a key environment in which to foster an association with premium hair care products.
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