TAGS: Sustainability / Natural Cosmetics Hair Care
According to Grand View Research, the global premium hair care market size was valued at USD 21.26 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 6.6% from 2023 to 2030.
Factors Driving the Market
The surge in the use of premium hair care products as complete hair solutions, increasing demand for chemical-free natural care products, growing disposable incomes, demand for
anti-aging and anti-hair loss products, and technological advancements plus innovations in the beauty industry are the major factors boosting the market. In India, for instance, consumers in urban areas, mainly comprising younger people, had spent 3 times as much on hair care as those in rural areas, in 2020.
However, the COVID-19 outbreak had a significant impact on consumer behavior as well as manufacturing trends in the premium hair care industry. The early onslaught of the pandemic had an adverse impact on the market in worst-hit countries such as the U.S., India, Brazil, Russia, and the U.K. The first quarter sales (2020) of these products have been significantly low as a result of the widespread closures and lockdowns. Consumers became more conscious of their spending habits and avoided buying frivolously.
The growing e-commerce retail market is among the key factors fueling demand for premium hair care products. In the coming years, online selling techniques such as drop shipping and affiliate marketing are likely to gain momentum. Brands operating in this segment are focusing on launching unisex/gender-neutral products to target gender-fluid consumers, which is likely to contribute to an increase in product demand in the foreseeable future. Key brands are expected to focus on neutral packaging to target a varied set of consumers.
Robust product innovation, by new entrants, related to men’s premium hair care range is providing the necessary boost for such products. For instance, in January 2021, Priyanka Chopra Jonas, a Hollywood/Bollywood celebrity, launched her gender-neutral premium hair care product brand Anomaly, in partnership with beauty brand creator and incubator Maesa, which is available in Target stores. This gender-neutral product range consists of shampoos, conditioners, a hair mask, and dry shampoo, all of which are cruelty-free, chemical-free, and packed in recyclable bottles made with post-consumer recycled materials.
In addition, there is a growing demand for chemical-free, organic, and natural ingredient-based products from a large section of environmentally aware shoppers. Thus, to meet the rising demand for such products, some of the key players in this market are adopting product innovation and R&D strategies to gain a substantial market share within this segment. For instance, in 2020, Henkel Beauty Care announced its plans to launch several product innovations in the upcoming years under its brand called N.A.E. (Naturale Antica Erboristeria), which is the company’s 100% organic personal care brand.
The popularity of social media influencers has been prompting companies to spend anywhere from USD 100.0 to thousands of dollars for a single product post on an influencer’s page. According to an Edelman survey published in December 2019, 63.0% of the 18 to 34-year demographic trust influencers’ opinions of brands more than advertising done by the brand itself.
Thus, initiatives adopted by the companies are likely to drive revenue growth. For instance, in January 2020, premium hair care brand Briogeo launched its first influencer collaboration with Kathleen Fuentes to promote its new hair care range B.Well, launched in 2019.
Related read: Formulating Hair Care Solutions for Repair and Protection
Product Insights
In terms of revenue, shampoo dominated the market with a share of above 29.0% in 2022. The rising demand for shampoos is attributed to the increasing prevalence of various hair-related problems such as dandruff, thinning, oily scalp, dryness, and itchiness. The growth of the premium shampoo market is supported by the changing lifestyles of consumers along with environmental challenges such as rising pollution which is harmful for the scalp's health.
Furthermore, consumers are becoming more conscious about their hygiene, and are therefore spending more to maintain a healthy lifestyle, which, in turn, is creating a huge demand for personal care products including shampoos.
Dry shampoo is expected to register a CAGR of 8.2% from 2022 to 2030. The demand for it is growing significantly due to the availability of herbal and organic variants. The inclusion of natural ingredients in dry shampoo such as kaolin clay and Fuller’s Earth reduces the risk of damage caused by the excessive use of chemical products. Another major factor that contributes to the rising demand for dry shampoos is the fast-paced and busy lifestyles of consumers. With increasing modernization, both men and women are opting for products that are convenient and quick.
Demography Insights
Women consumers dominated the 2022 markets with a share of above 82.0%. The rising number of working women is boosting the market. Work pressure, long working hours, poor work-life balance, and high levels of stress lead to various hair-related problems such as thinning, greying, etc. among women. This has created a significant demand for premium products among women, as they can maintain their desired appearance by using such products.
Additionally, increasing awareness among women regarding the benefits of using natural products over chemical-based products on their health has further increased demand for premium hair care products.
The men’s segment is estimated to expand at a CAGR of 7.3% in the forecast period. The market is primarily driven by the rising consciousness among male consumers about personal wellness and appearance. Moreover, due to the increased penetration of social media, there has been a significant rise in interest regarding personal care products, such as hair care, among men.
Manufacturers have been subsequently launching products and collaborating with brands and celebrities to promote premium products. These celebrity endorsements, promotions, and campaigns tend to create an influential impact on male consumers.
Distribution Channel Insights
The online segment accounted for the largest revenue share of more than 26.0% of the global market in 2022. Consumers prefer to purchase products through online channels due to the wide availability of brands and convenience. Furthermore, several online channels offer the products at a discounted price as compared to offline retail stores, which is likely to boost product sales through this channel. Value-added services offered by the e-retailers such as an easy refund policy, huge discounts, free shipping, availability of a wide variety of international brands, and cash on delivery are the key factors boosting the sales of premium hair care products through this channel.
Specialty stores are set to expand at a CAGR of 6.8% in the forecast period. Specialty stores focus on specific product categories and offer a wide range of products for that specific product category, thus making it easier for customers to purchase the products that they desire. Most specialty stores sell a considerable range in terms of products that they offer to provide quality service and expert assistance to customers. Consumers buy premium and luxury care products from specialty stores as they stock an array of premium products that are otherwise not available at local retail outlets.
Regional Insights
Asia Pacific dominated the market with a share of above 38.0% in 2022. Organic premium hair care products emerged as the most significant trend in 2020, with a sizable number of Asian consumers becoming conscious of the numerous benefits of sustainably sourced luxury cosmetics. The growing middle-income population in the Asia Pacific is one of the prominent factors stimulating the demand for premium hair care products. Such consumers seek quality and sophisticated products.
European markets are forecasted to expand at a CAGR of 6.6%. According to a report by Cosmetics Europe, 71.0% of the consumers in the region consider personal care products such as hair care products as essential products in their daily lives. Such initiatives drive the market for
premium natural hair care products in the region. Increasing instances of scalp-related problems such as dandruff and itchiness have led consumers in the European region to incline toward organic and natural premium hair care products. With the changing consumer preferences towards herbal and organic products, manufacturers are focusing on offering products containing natural ingredients.
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Source: Grand View Research
