Australia is a highly competitive and mature haircare market and it can be difficult to achieve cut-through without a point-of-difference. According to Statista, the Aussie haircare market is worth $1.3 billion a year and is forecast to grow at a CAGR of three per cent in value terms through to 2020. The shampoo category has the highest volume share, but the styling agents sector is on track to achieve the highest value increases. When it comes to distribution channels, supermarkets account for 40 per cent of Australian haircare sales.
The increasing demand for healthy, shiny and manageable hair is global says Transparency Market Research. The worldwide haircare market, including shampoo, conditioner, hair styling products and oils, is predicted to expand from US$81.3 billion in 2015 to a value of US$105.3 billion by 2024. The Asia/Pacific region accounts for over 33 per cent of global haircare sales, the largest regional market, and is driven by the surging demand for more premium products in China.
Innovations in the haircare space fuel more than 10,000 new launches a year. The five largest haircare markets are: the US (US$15.1 billion), China (US$8.02 billion), Japan (US$6.76 billion), Brazil (US$6.56 billion) and Germany (US$3.29 billion). Australia measures up well on a per capita basis. But growth is very impacted by the highly promotional nature of the haircare market, where the major players such as L’Oréal, Unilever and Procter & Gamble compete strongly to value-conscious consumers through regular discounting.
L’Oréal Australia was the leading company in haircare in value terms in 2017 because of its strong portfolio of brands, including Garnier, and performance across multiple categories from shampoos through colourants, conditioners and treatment products. Through power brands TRESemmé, Sunsilk and Dove, Unilever Australia is a strong number two because of its major presence in mass.
Booming Market for Natural/Organic Haircare
Some haircare trends are fleeting, but others are macro in nature and dominate sales for years. The natural/organic/vegan trend continues to gain strength each year. The global organic haircare market was worth US$2.56 billion in 2014, reports Crystal Market Research, and is expected to reach US$6.7 billion by 2023. According to the Australian Organic Monitor Report, in the five years from 2009 to 2014 Australia's production of organic cosmetics and personal care products rose by 18 per cent, with skincare (+35.4%) and haircare (+33.7%) easily topping the rankings as the largest categories. In 2017, 22 per cent of Australian shoppers purchased organic products.
The interest in natural and organic is particularly strong for shampoo and herbal shampoos are predicted to achieve significant global growth, says Transparency Market Research. Millennials are a major force driving the naturals trend, particularly in China, Asia and the Middle East, says the analysis firm. Multinational brands are increasingly entering the natural haircare arena in Australia and overseas and last year saw the launch of Johnson & Johnson's Maui Moisture in Woolworths and Priceline.
Haircare products that merely claim to cleanse and condition are becoming increasingly rare as consumers look for added benefits. Intense hydration has been tracking strongly over the past year, reports the Kline Group, through popular value-conscious SKUs such as Pantene pro-V Daily Moisture Renewal Shampoo, Dove Daily Moisture Shampoo and Herbal Essences Hello Hydration Moisturising Conditioner.
Anti-Ageing A Strong Driver
As the median age in Australia rises to 38, haircare products dealing with the prime haircare concerns of older Millennials, Gen Xers and Baby Boomers such as thinning, breakage, dryness and colour protection has led to a surge in anti-ageing products. According to Aveda, owned by Estée Lauder, 46 per cent of women globally are concerned with thinning hair which inspired the brand to enter the anti-ageing haircare category firstly with the Invati range and then Invati Advanced.
Women over 40 not only want to look as good as possible for longer, they are also seeking to reduce the time between hair colourant treatments. Colour protection products have been around for a long time, but today's consumers are seeking out more technologically advanced products. According to the US-based Hair RX Middle-Age Haircare Report, nearly 80 per cent of women surveyed revealed they want their hair to make them feel prettier and more confident.
More than 60 per cent said they preferred to buy shampoos and conditioners that are customised to address their personal haircare goals. It's not just benefits, either. Scent is a strong priority and 83 per cent of female respondents said that the fragrance of haircare products is very important to them. SheaMoisture 100% Virgin Coconut Oil Daily Hydration Shampoo and Conditioner, for example, launched in Priceline last year, fits three major purchasing trends - natural, hydrating and beautifully scented.
K-Hair, Pollution Solutions and Microbiome Research
During a recent presentation at in-cosmetics Global, Iliyana Mesheva, associate analyst at GlobalData, confirmed that haircare innovation had expanded well beyond shampoo, styling and colour products to serums, pre-shampoo and post-conditioner style products. Haircare trends from South Korea, where 20 per cent of consumers use six or more haircare products such as essences to repair heat damage and styling, are likely to move onto the world stage. Among the younger generations, 23 per cent of surveyed consumers are interested in smart phone connected beauty tools and devices. Dry shampoo isn't the only waterless haircare product up for consideration, Ouai's Anti-Frizz Hair Sheets, for example, which can be swiped through the hair to remove flyaways, are paving the way for future innovations, she adds.
Global concerns about the effects of pollution on the body aren't restricted to skin, says Mintel. According to the data tracker, 21 per cent of Internet users surveyed said they were interested in anti-pollution shampoos. Exposure to pollutants can damage the hair and make it more susceptible to breakage. Women who live in cities, notably in Asia, tend to suffer from dry, dull hair and itchy scalps caused by pollution.
The microbiome/probiotic trend is booming in skincare. "We are also seeing opportunities in scalp care to produce gentler formulas that will care better for the scalp and hair health, as well as expand the hair routine", says Andrew McDougall, global hair analyst for Mintel. L’Oréal’s Research and Innovation is just one of the few multinationals investigating microbiota in the scalp.
Dry Formats, Premiumisation and Sun Care
Dry shampoo continues to increase in popularity globally, says McDougall, with more people using it in 2017 than the previous year. The waterless concept is very strong in South Korea, where such products are positioned as more potent and effective. "We are also seeing dry formats adopt multi-benefits such as mists which incorporate micellar technology", adds McDougall.
In Euromonitor's International Beauty Survey - Haircare Vs Skincare Path to Purchase Selection, the top score went to the response - Strongly prefer proven efficacy. Key factor driving the growth of the haircare market in Australia and overseas are technological advances and product line extensions leading to premiumisation. Consumers today are increasingly willing to pay more for innovative products. Prestige skincare company, Sisley, for example, launched its new Hair Rituel range recently and a top seller in Australia is the Revitalising Fortifying Serum for the scalp.
UV protection is becoming a standard inclusion in many beauty and personal care products from body lotions to moisturisers and foundations. Sun care incorporated into hair products has been around for some time, but remains a key area for growth and innovation opportunities. Klorane's new Sun Radiance range hits the trifecta for sun-exposed hair. The shampoo, conditioner and protective oil are made from natural ingredients and hydrate and protect the hair.