Status consumption boosts hair care sales in emerging region

According to the latest data from Euromonitor International, global retail sales of hair care products grew 5% in 2011 to reach $73.7bn. But while growth in the US, Japan and western Europe was lacklustre, emerging markets (notably China, India, Brazil, Russia and Mexico) witnessed more enthusiastic spending. As a result, manufacturers are faced with the challenge of two parallel but very different global playing fields, according to senior FMCG analyst Rob Walker.

On the one hand, in emerging markets like Brazil (the strongest growth market in the world for hair care) the sector is subject to increased trading up. ‘Salon in the supermarket’ brands, which present a premium image at an affordable price, tap into the aspiration fuelled purchasing of Brazil’s third tier consumers. And demand for a more sophisticated middle ground is also apparent in Mexico, China, India and Russia.

In developed markets, on the other hand, brand loyalty has been eroded through value for money deals aimed at cash strapped consumers. However, Euromonitor’s Walker suggested that the trend towards affordable luxury may present an opportunity going forward; in something of a nostalgic hark back to better times, consumers are prepared to treat themselves to luxury items if they are positioned at accessible price points.

Eco friendly products, such as Pro-V Nature Fusion and Timotei Organic Delight, are another potential way to beat the downward curve in western Markets.

Meanwhile, manufacturers are said to be looking more closely at niche categories, like hair loss treatments, where market maturity is no barrier to growth. And elsewhere, boutique mergers and acquisitions, such as Church & Dwight’s acquisition of Batiste’s UK business, or PZ Cussons’ acquisition of Fudge, are said to present value enhancing potential in markets where growth in mainstream products is obstructed.