Hair Care Verging on a New World Order

Last year, the hair care category shrugged off global economic volatility to deliver its strongest performance in more than a decade. Sales climbed by 6% on 2011 (at fixed U.S. dollar exchange rates) to reach $75 billion. Shampoos were dominant, accounting for 35% of spending. The global growth of 7% was driven by strong trading up activity in the emerging markets, but conditioners had the more compelling growth story, with sales up by an unprecedented 10%. This reflected surging demand in the BRIC markets, as well as a positive response in developed markets to products offering intensive and targeted treatments, notably with the use of oils.

Colorants also performed well (up 6.5%), despite sluggishness in the U.S. and France. Burgeoning demand from the world’s emerging middle-class coupled with resilience in the U.K. and Germany, where there was an uptick on the back of weaker away-from-home salon spending, helped the category notch up more than $800 million of growth. L’Oréal Paris, Wella Professional and Garnier were the top performing brands, each generating more than $100 million of retail growth in absolute terms.

Some categories disappointed, however. Perms and relaxants slipped into contraction for the first time in five years, while hair loss treatments—one of the star performers of recent years—grew by only 1% due to a loss of traction in the key Japanese market. Styling agents and salon hair care also put in lackluster performances, highlighting their heavy dependency to the U.S., Japan and Western Europe.

Overall, emerging markets continued to prop up the global performance of hair care, fueling 92% of growth in absolute terms compared with 88% in 2011. Collectively, the emerging markets accounted for 49% of total retail hair care spending in 2012 compared with 38% in 2007 and 29% in 2002. The transfer of power from developed to emerging markets looks unstoppable, with the scales almost certain to tip over the course of this year. By 2017, emerging markets are forecast to account for 60% of the category’s global retail value. By any calculation, it is a remarkable shift in global consumption power.

Rob Walker, senior fast-moving consumer goods analyst, Euromonitor International, can be contacted at [email protected].

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