Growth in the global salon hair care market is being driven by the Asia and Latin America regions. Whereas Western Europe and the United States are diligently exploring novel marketing strategies to stimulate sales, the emerging markets are blooming. Consequently, we shall take a closer look and reveal early findings concerning these markets.
Asia: India and China – two giants showing different dynamics of professional hair care…
Although the majority of global players are already present in Asia, the region continues to be a hot spot for professional hair care marketers as the extraordinary growth potential in this region persists.
With a growth rate estimated at over 20% in 2011, India finds itself for another consecutive year as the region’s growth leader. This increase is notably exceptional given the size of the market, as it is generally smaller countries, such as Indonesia or Malaysia, that develop more dynamically. Our early findings indicate that Vietnam is emerging as a highly enticing market, ranking second in terms of growth. Along with major local players, global giants such as L’Oréal, Procter & Gamble, and Henkel are also seeing positive growth rates in Vietnam.
Represented by hundreds of local brands alongside industry giants, the Chinese market is especially fragmented. Although the overall market is enjoying stable growth, market dynamics by company are highly divergent, with several major global players struggling to increase their market share.
By far, hair coloring products in Asia is the largest category, with ammonia-free products driving sales. By contrast, hair styling products represent a conspicuously small market share with sluggish growth.
Turkey and UAE: surprisingly strong take-home product sales
The professional hair care markets in Turkey and United Arab Emirates share some similarities.
Both markets enjoyed comparable and healthy sales dynamics, with estimated growth rates between 8% and 10% for each country in 2011, with take-home products particularly excelling. In the UAE, sales to end consumers are estimated to be four times higher than those of back-bar products. Worth noting is the fact that professional products in the UAE are sold exclusively through hair salons, and this differentiates it from Turkey where the line between professional and retail is less distinct with salon products sold in consumer retail outlets and many salons using mass retail products.
Within both markets, keratin-based straightening, as well as oils (in particular argan oil), are the major trends identified.
Latin America: hair coloring – largest and fastest growing category
Mirroring developing markets in Asia, hair coloring products are driving sales of professional hair care within Latin American, being the largest and fastest growing category. At the same time, straightening and perming products, usually more popular than hair styling in Asia, lag behind in this region. One reason for that can be seen in consumers associating keratin-based straightening with ingredients, such as formaldehyde, now forbidden in many countries.
In many Latin American countries, major players use distributors. An obvious advantage of this structure is the access to local know-how and experience, but on the downside it makes it harder to exert full control over what’s happening within each market. Local players and companies enjoying direct regional presence seem to profit from the proximity to the consumer and, in many cases, experience higher growth rates.
The growth dynamics in the region differ from one market to another, with Mexico experiencing stable sales of roughly 4%, Brazil showing very healthy growth of approximately 8%, and finally Argentina with way above-average sales increase of almost 30% in 2011–but only in theory, as the figures should be accessed through the prism of the country’s soaring inflation currently estimated at 20%.
The above highlights for these emerging markets are a mere fraction of what will be covered in the Salon Hair Care Global Series 2011 edition and give only the initial picture of this vibrant industry. The full results and more insights will be released later this month.