The State of the Salon Industry in Key Markets

[VIDEO] The State of the Salon Industry in Key Markets

The salon hair care industry is showing positive signs of recovery after one of the most challenging years in history. As we prepare to release new data on more than 30 markets across the globe, our salon hair care experts are offering a sneak peek into some of the latest developments in three key countries. To watch a video version of this blog, follow The State of the Salon Industry in Key Markets.

The United States, the largest salon hair care market in the world

While a 10% decline in 2020 is, by no means, optimistic for the performance of the salon hair care market in the United States, marketers and industry professionals have been pleasantly surprised by the market’s performance. The biggest bright spot was e-commerce, which was up 86% and was the only outlet to record growth. This was coming from all areas of e-commerce, including third-party sites such as Amazon and Dermstore; brick-and-mortar websites such as Sephora.com and Ulta.com; and branded websites, where brands such as Amika, R+Co, and Olaplex recorded exceptional performances.

In addition to a strong online performance , the robust growth for Olaplex also drove the market’s resurgence in bonding. With the introduction of Olaplex’s newest bonding product, No.0, coupled with increased interest in self-care revolving around hair health and maintenance, the segment saw a boost in retail products. In spite of this, back-bar sales struggled, as did most other categories in the market.

Perhaps the most positive insight is the rebound of the market. The later half of 2020 saw the market beginning to return to normal, with many anticipating a return to growth soon, as salons fully reopen and ease pandemic-related restrictions. This will be largely due to a return to hair coloring, hair styling, another category that took a major hit in 2020, will also rebound as consumers return to work, and other in-person activities.

Germany, one of the largest markets in Europe

With more German consumers staying at home, the need for self-hair care grew in 2020. As salons observed a lower frequency of visits and industry sales declined, consumers invested in professional products to maintain their hair color and treat their hair.

Meanwhile, with increasing consumer concern for the environment and personal health, naturally oriented and sustainable brands such as Kevin.Murphy and Davines registered double-digit growth. The Wella Company launched a vegan and sustainable brand called weDo/Professional; it carries one of the first solid shampoo bars on the market.

In 2020, more than ever, brands such as Kerastase and Alcina engaged with end consumers via social media. This enabled them to boost take-home sales through e-commerce despite the pandemic.

India, the most dynamic market in the world — and one of the most impacted by the pandemic

In the Asia-Pacific region, India has always been one of the strongest-performing markets, experiencing double-digit growth for the past five consecutive years. This is primarily due to it being a developing market with a large scope for further development, given its rising urbanization, increasing awareness of the importance of professional hair care products and services, and the expansion of chain salons in Tier 2 and Tier 3 cities.

However, with the COVID-pandemic, India was one of the most adversely impacted markets in the region, with a sales decline of 29%. This was attributed to the lack of regulated infrastructure, inadequate support from the government, and safety concerns among consumers.

On the brighter side, marketers increasingly took to adopting an omnichannel strategy, with e-commerce taking center stage in 2020. Many companies expanded their distribution networks to go above and beyond conventional distribution channels, entering the e-commerce channel with take-home offerings on e-commerce sites, such as Amazon, Flipkart, Nykaa, and Lakmé Salon.

For additional insights and data on more than 30 professional hair care markets across the globe, refer to our Salon Hair Care Global Series study. In addition to featuring many new markets in Eastern Europe, this soon-to-be-published edition will offer brand sales by outlet as well as the impact of COVID-19 on the industry and changes that will occur in the new normal.

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