Study of category segmentation of Hair Care Products in India: An Overview
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1 Study of category segmentation of Hair Care Products in India: An Overview Archana Lahoti Assistant Professor Suryadatta Group of Institutes Abstract The hair care market is a key constituent of the Indian personal care sector and is witnessing steady growth of 30-35%(Beauty & Wellness Market) owing to increased product penetration as well as expanding product portfolio. An increasing focus on beauty and looks by urban Indian consumers has propelled the growth and the sale of Hair Care products in the Indian Market. Along with the traditional products such as Hair Oil, Mehndi and Shikakai products such as conditioners, hair colorants, perms and relaxers, shampoo, and styling agents occupying the same space, even surpassing the traditional products. The conditioner segment was the market's most lucrative in 2014, while the shampoo segment being next, followed by hair colorants, styling agents and perms and relaxers (Market line July 2015). Many national and International companies such as Dabur, Marico, P& G, and Unilever are successfully operating in this competitive market fulfilling customers demand with different range of products. Key Words: Personal Care Sector, Product Portfolio Introduction The hair care market is a key constituent of the Indian personal care sector and is witnessing steady growth owing to increased product penetration as well as expanding product portfolio. Awareness of personal, grooming, rapid urbanization, rising disposable incomes have changed the Indian personal care sector especially Hair Care Products sector. An increasing focus on beauty and looks by urban Indian consumers has propelled the growth and sale of Hair Care products in India. India is traditionally known for extensive use of hair oil and still holds a leading share of hair care market. Indian hair care market consists of conditioners, hair colorants, perms & relaxers, shampoo, and styling
2 agents. Indian Consumer today are more aware of the harmful effects of chemicals and are willing to spend more on products that they perceive to be made of natural, herbal or Ayurvedic ingredients, which they perceive to be better for their hair. Traditional hair treatments such as Hair oil, Shikakai sell was as much as new category of products such as shampoo, conditioners, colorants, styling agents and perms and relaxants. Consequently traditional herbal powders and hair oils for conditioning share the same shelf space with high-end conditioners. Hair care products with natural ingredients are gaining market share especially in the shampoo and hair color/dye categories and are largely positioned as premium products. The Indian hair care market has been enjoying steady, healthy growth in the recent years. The market's volume is expected to rise to 3,311.1 million units by the end of 2019, representing a CAGR of 6.7% for the periods. (Market line, July 2015) This trend is expected to continue in the forecast period of further 5 years. In addition to the retail market, specialized hair care beauty salons are increasingly becoming a popular medium for introducing specialized products in the premium market. Following data shows how Indian Personal Care Products Industry is growing (Beauty and Wellness Market report) Type of Market INR Year Skin Care Color Cosmetics Market Hair Care Perfumery and Deodorants Market INR 62 bnin INR 17 bnin INR 125 bnin INR 51bnin Estimated Growth Rate over the period e % Fastest Growing Segment Anti-ageing and fairness creams especially for men % Lip gloss and mascaras % Shampoo and conditioners hair colorants and styling products % Deodorants
3 Source: Beauty& wellness Market Thus hair care market is one of the fastest growing Industries in Personal Care Products. Objectives: 1) To study category segmentation of hair care products in India 2) To study market share of different categories of Hair Care Products in India 3) To study market value forecast for Indian Hair Care Market 4) To study leading companies in India in Hair Care Market Review of Literature: The Hair care market is considered a mature market in India. Due to increased hair regarding issues, the demand for hair care products like regular and expert shampoos, conditioners, hair colors and hair oils are increasing rapidly, thereby providing high impetus to the India hair care market. For the wealthy class beauty treatment and hair colorants have now become a lifestyle need. Hair care has exciting legroom for new product development and manufacturers are trying to convince consumers that they should adopt a hair care regimen through various product launches and aggressive marketing strategies. (Beauty & wellness report, 2016) Customer demographics in the men s personal care industry vary greatly by product category. Men in the age bracket of years however, purchase the widest range of products and are most devoted to grooming measures. Periodicals like Maxim and FHM regularly feature grooming articles and stress their necessity to remain desirable and attractive in the dating market Men feel the need to look younger and more attractive to remain professionally competitive. Almost 70% of the men said that appearance affects salary; the same participants also believed that looking younger improved prospects for promotion. (Demographics of India, Wikipedia, the free encyclopedia, 2016) Hair care is a main category of this industry. A study by Nielsen, a market research firm, determined that shampoo is the most popular FMCG product in India. The $818 million shampoo segment is dominated by Hindustan Unilever Ltd., owned by U.K.-based Unilever. Its most popular brands are Sunsilk, Clear, and Clinic Plus. Hair oil is another important product, valued at
4 $1.3 billion annually. India-based Marico's Parachute and Dabur are leaders in the production of branded coconut hair oil. (Amritt Ventures) Hair care products continued to register strong growth in India in Hair care posted growth of 8% in 2016, with sales reaching INR192.8 billion. (Euromonitor International) With a growth rate curving upward, the hair care market in India is going through a major paradigm shift. With consumers ready to experiment with new products and services and marketers churning out new products at an impressive rate, there is a sense of excitement in the industry. The potential is such that major Indian manufacturers are now relaunching hair care brands that did not survive in earlier market scenarios (Global cosmetic Industry) In the Indian hair cosmetics market the traditional hair treatments sell as much as new categories haircare products. Traditional herbal powders and hair oils for hair conditioning share the same shelf space with high-end conditioners. The Indian hair care market had total revenues of $2,010.6m in 2014, representing a compound annual growth rate (CAGR) of 10.9% between 2010 and Market consumption volume increased with a CAGR of 9.2% between 2010 and 2014, to reach a total of 2,391.5 million units in The conditioner segment was the markets most lucrative in 2014, with total revenues of $932.8m, equivalent to 46.4% of the market's overall value. The shampoo segment contributed revenues of $776.8m in 2014, equating to 38.6% of the market's aggregate value. RESEARCH METHODOLOGY The data was collected through the websites of different search engines like Google, Euro monitor, Market line (July 2015), Wikipedia etc. The data was also collected from different magazines, newspapers, research journals, annual reports of companies etc. Market analysis of Hair Care Products: The hair styling products sector in India presents significant expansion opportunities due to the increase in the young population. India has more than 50% of its population below the age of 25 and more than 65% below the age of 35(Wikipedia.org).Thus India has one of the youngest populations globally, which combined with increased imageconsciousness provides opportunities for existing brands to expand and offer new
5 brands to break through. The performance of the market is forecast to follow a similar pattern with an anticipated CAGR of 11.1% for the fiveyear period , which is expected to drive the market to a value of $3,399.3m by the end of (Market line, July 2015) Market value Following data shows the increase in Hair Care Market from the period of The compound annual growth rate of the market in the period was 10.9%. Year $ Million % Growth , , % , % , % % CAGR: % SOURCE: MARKETLINE (July 2015) Category segmentation Conditioner is the largest segment of the hair care market in India, accounting for 46.4% of the market's total value. The Shampoo segment accounts for a further 38.6% of the market. The Hair colorants segment accounts for 13.5%.The Styling agents segment & Perms & relaxers segment accounts for 1.2% & 0.4% respectively which was shown in the following table Category Year (2014) % Conditioner % Shampoo % Hair % colorants Styling % agents Perms & % relaxers Total 2, % Indian Haircare Market Category Segmentation: % share by Value, 2014 SOURCE: MARKETLINE (July 2015) Market value forecast In 2019, the Indian haircare market is forecast to have a value of $3,399.3 million, an increase of 69.1% since 2014.The compound annual growth rate of the market in the period is predicted to be 11.1%. Year $ million % growth % % % % % % CAGR: % SOURCE: MARKETLINE (July 2015) Leading Companies in India in Hair Care Market Dabur India Limited: Dabur is an Indian consumer goods company that manufactures and sells a variety of products across personal care,
6 healthcare, homecare and food categories. The personal care products range includes herbal and Ayurvedic hair care, oral care, and skin and body care products. The hair care products include hair oils and shampoos under brands Dabur Amla, Dabur Almond, and Vatika. The company recorded revenues of $1,281 million in the fiscal year ending March 2015, an increase of 10.3% compared to fiscal 2014 for all the product portfolios in which it operates. Its net income was $175 million in fiscal 2015, which is 16.6% higher as compared to a net income of $150 million in 2014 Marico Limited: Marico Limited (Marico) is an India-based company, engaged in offering a range of fast moving consumer goods (FMCG) such as hair care, skin care, healthy foods, hair oils for pre-wash and post-wash hair conditioning, nourishment and grooming needs in the branded hair oils market. Marico's consumer product segment offers coconut oil, hair oils, anti-lice treatments, care, hair creams and gels, hair serums, hair colors, shampoos, hair relaxers and straighteners, deodorants and other products. The company markets its products under the brand names: Parachute, Saffola, Hair and Care, Nihar, Mediker, Revive, Set Wet, Livon and Zatak. The company recorded revenues of $938 million in the fiscal year ending March 2015, an increase of 22.1% compared to fiscal 2014 for all product portfolios in which it operates. Its net income was $94 million in fiscal 2015, which is 17.5 % high as compared to a net income of $80 million in 2014 Procter and Gamble Company : P and G is a global manufacturer and marketer of branded consumer products.p and G s beauty segment offers products such as cosmetics, deodorants, antiperspirants, personal cleansing products, haircare and color products, skin care products, prestige products, and salon professional products under the Head and Shoulders, Olay, Pantene, Wella and SK-II brand names The company recorded revenues of $83,062 million in the fiscal year ending June 2014, an increase of.6% compared to fiscal 2013 for all the products in the portfolio of the company. Its net income was $11,643 million in fiscal 2014, compared to a net income of $11,312 million in 2013.
7 Unilever: The group operates through four product segments: personal care, foods, refreshment, and home care. The personal care segment includes skin care and hair care products, deodorants and oral care products. The group's major brands in this segment include Axe, Dove, Fissan, Brylcreem, Lux, Lifebuoy, Pond's, Radox, Rexona, Signal, Close Up, Simple, St. Ives, Sunsilk, V05, Vaseline, Tresemme, Timotei, Clear and Toni and Guy. The company recorded revenues of $64,281 million in the fiscal year ending December 2014, a decrease of 2.7% compared to fiscal 2013 for all the products in its portfolio. Its net income was $6,863 million in fiscal 2014, compared to a net income of $6,426 million in 2013 Conclusion: Indian Hair Care Market is growing at estimated rate of 30-35%. People are becoming aware of grooming and importance of good appearance. Many Multinational and National Companies such as Dabur, Marico, P and G, Unilever are successfully operating in India and fulfilling need of customers. Along with the traditional hair care products such as mehndi, hair oil, shikakai new products such as shampoo, conditioner, perms & relaxants, colorants and styling agents are becoming popular Bibliography: 1. Khawaja Mubeenur Rahman, Dr. Roshan Kazi² and Sandip Sourav Analysis Of Hair Care Products With Reference To Shampoo Market In India,Abhinav Journal, Volume No.1, Issue No.1 2. Dr. Sangeeta Mohanty, Indian Shampoo Brand Positioning: Multi- Dimensional Scaling Approach, International Journal of Computing & corporate Research, Volume 2, Issue 5 September Priyanka Bhattacharya, Paradigm shift for India s Hair Care, Global Cosmetic Industry, Hair Care in India, Euro monitor, May Hair care in India, Market Research Reports, May Market Line Industry Profile: Hair Care in India Beauty & wellness market May, Demographics of India, Wikipedia, the free encyclopedia, phics_of_india
8 10. Haircare in India July /Report-Beauty-and-Wellness- Market-in-India
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