Notes from China
SINCE THE INCREDIBLE growth began in early 1990s, the Chinese hair care market has become one of the largest
in the world, ranking only behind the U.S.
and Brazil, according to sources. Datamonitor estimated the Chinese market at $2.14
billion in 2009. Of that total, shampoo accounted for 78.9% of sales, conditioners represented 11.6% and all other hair care
products combined to account for the remaining 9.5%. In terms of growth opportunities, hair colorants exhibited high growth
with a CAGR of 9.4% during the 2004–09
Similar to skin care, the hair care market in China has been dominated by familiar international big names, with Procter &
Gamble leading the way, followed by
Unilever, Beiersdorf, Kao and L’Oréal, according to Euromonitor. Despite this
multinational monopoly, domestic players
still manage to make it onto the leader
board. Those local names joining Euromonitor’s 2009 top 10 list are Bawang
(Guangzhou) Co. Ltd., Guangzhou Panda
Cosmetics Co. Ltd., Guangzhou Decolor
Ally Dai is senior editor of Happi
China. She has more than 10 years
of experience in the cosmetic and food industries.
Happi China is a leading media for the China household & personal care industry. Published by Ringier
Trade Media in strategic editorial partnership with
Happi, it helps local manufacturers update their knowledge on formulating, testing and packaging, as well
as providing market insight.
Co. Ltd. and Younggrace Cosmetic Group
The future holds great promise, too. A
recent report by China Daily points out that
approximately 20% of Chinese people
wash their hair every day while 75% of
them do so every three days.
On a per capita basis, the Chinese spent
just $1.79 a year on hair care products in
2009, according to Datamonitor. Therefore,
analysts estimate that by the end of 2014,
this market will be worth $2.7 billion, with
an expected CAGR of 4.9% between 2009
While engaged in price competition in the
low-end segment of the hair care market
for the past few years, both international
and domestic manufacturers are now
competing ferociously in middle to high-end segments with products claiming to
contain breakthrough ingredients for
more specific functions. As Chinese consumers’ major requirements for hair care
are getting more specific, specialized products for moisturizing, repairing, dandruff
treatment or straightening effects have
been widely adopted, creating competition
within the market.
Anti-dandruff formulas are of great importance in China’s hair care market, with
anti-dandruff products accounting for nearly
one-third of total shampoo value sales in
China, according to Euromonitor. In fact,
Head & Shoulders and Clear (another anti-dandruff brand), ranked No. 1 and No. 3 respectively by retail value.
Repairing is another popular claim
among hair care products in the market. According to research conducted by Peking
University First Hospital and P&G’s Pantene
involving 600 consumers in Beijing, Shanghai and Guangzhou in 2009, 88% of respondents in Shanghai, 70% in Beijing and
58% in Guangzhou said that their hair had
been badly damaged. Their attitudes may
explain the fact that products focusing on repairing hair damage caused by styling and
color processing are on the rise.
After seeing the great success of early
entrants, the vast majority of whom are
multinationals, many local manufacturers,
especially those with pharmaceutical backgrounds, also launched products with similar function claims, but with emphasis on
medicated formulas that are typically based
on Traditional Chinese Medicine (TCM).
However, the success of these local brands
has been limited, with the exception of
Bawang, which is the only domestic brand
ranked in Euromonitor’s Top 10 hair care
brands for 2009.
Overall growth of medicated shampoos
was slower than that for standard products,
at just 5.3% compared to more than 12% for
the latter in 2009, according to Euromonitor.
In contrast to standard products, retail distribution of medicated shampoos tends to
be rather limited, with products sold primarily through chemists/pharmacies and para-pharmacies/drugstores.
Prestige’s Bright Future
Like the medicated product sector, sales of
premium hair care products lagged, and its
sales only accounted for a small percentage
of total hair care sales in China. Satinique
from Amway, Tsubaki from Shiseido and
Asience from Kao ranked as the top three
brands in premium hair care in 2009, according to Euromonitor.
However, as China’s economy continues
to boom, premium products are expected to
outperform cheaper rivals in the future,
thanks to its current low penetration and
growing Chinese middle class, which has
more disposable income. The high-end sector is now regarded as the next battleground
for hair care manufacturers in China, due to
the fact that an increasing number of brands
are now entering this sector.
While international brands such as
L’Oréal, P&G and Shiseido have been