Market for professional hair care in India holds lots of potential

The global market for salon hair care is currently estimated to have a value of $12bn and last year grew at a rate of 2.1 percent, but in Asia Pacific, although the market is far more fragmented, the market is growing at a far greater pace, with India leading the way.

Although the overall market in the Asia-Pacific is still underlined by developed markets such as Japan and South Korea, smaller markets such as Malaysia, Thailand and Indonesia are showing much stronger growth, although this growth is still overshadowed by India and China.

Head to India for top market growth​

“India leads the region in terms of healthy dynamics, posting robust growth of over 20 percent. This increase is exceptional given the size of the market and changes in economy,”​ said Karen Doskow, Industry Manager at Kline’s Consumer Products Practice.

“Increased consumer interest in healthy hair and awareness supported by greater education of the benefits of salon products is helping fuel growth of salon hair care products in the country.”​

All of this is being driven by the fact that the rapidly evolving Indian economy is giving way to an expanding middle class population with increasing expendable income levels, reflected in the fact that visitor numbers to hair care salons are on the rise.

"The professional hair care market is still largely a nascent one affording much potential and allowing an environment conducive for global beauty players to make an entry. With a growing number of new salons opening competition is also becoming keener by providing consumers with multiple choices and encouraging a higher quality of service,”​ Doskow added.

Market dominated by larger international players​

Currently the market for professional hair care in India is dominated by the large international players, with Kline estimating that L’Oréal commands approximately 40 percent of sales in the back-bar and take-home segment.

The biggest three brands currently marketed by the French cosmetics giant in the country are L’Oréal Professionel, Matrix and Kératase.

With regards to the different types of professional hair care products, Kline points out that hair care coloring products continue to drive sales growth, and in particular permanent coloring products are popular due to what Kline refers to as ‘stable and long-term performance’.

Likewise, the report also points to the fact that hair coloring products within this category are no longer restricted to just coloring gray hairs, with different effects being used to achieve more expressive and fashion-driven effects.

The right retail channel is key to success of salon hair care​

“Most companies prefer to sell their products through their own trained sales representatives as this affords them better brand positioning, while a proportion of take-home or retail sales are made through specialized stores such as Dabur’s New U, and Religare Wellness in India,”​ said Doskow.

As with most luxury cosmetic and fragrance products in the Asia Pacific region, the report also highlights the fact that salon hair care is a target for counterfeiters,  which potentially serves to deteriorate brand image.

Ultimately Doskow believes the fragmented and undeveloped state of the salon hair care market in India points to significant growth and potential for new brands, estimating that CAGR for the category should run at 15.4 percent from 2011 to 2016.