Welcome back to YASO’s 6-part mini-series breaking down the beauty industry in China. Parts 1, 2, 3 and 4 were on Clean Beauty, Derma Skincare, Microbiome Skincare and Mass Fragrance in China. These are also on the YASO Blog page if you didn’t get the chance to read them.
Let us take a dive into another one of the key sectors in China producing huge growth numbers: Haircare.
Market Definition
Haircare covers any product that is used for the care and styling of hair. This covers a range of products such as shampoos, conditioners, hair masks, and hair colouring/styling products. These are typically used in haircare routines that involve cleansing, conditioning, moisturising, detangling, styling and treatment. The level of depth taken during each of these steps in a haircare routine differs depending on each individuals hair type, time and preference.
The Global Market
In 2023, the global haircare market size is currently worth $91.23 billion, and is expected to grow at an annual compound rate (CAGR) of 2.79%. By 2028, the global market is projected to be worth $107.2 billion.
Haircare in China
The Chinese Haircare Market
In 2023, the Chinese haircare market has produced revenue of $8 billion. China has per person revenues of $5.91 in the haircare market; while global per person revenues are $11.87, meaning that there is plenty of room for China's consumers to increase their current spend on haircare products.
In 2022, shampoo and haircare accounted for 27.3% of the total sales share of personal care products in China, significantly higher than other sub-categories. In the same year, the sales share of shampoo and care sets saw a year-on-year increase of 119%. Meanwhile, the growth rate of fine haircare categories such as hair nourishing lotions and hair repair essential oils reached a 384% year-on-year increase.
By 2025, China’s haircare market is expected to reach a total market size of $9.7 billion. Between 2023-2028, the Chinese market is projected to register a CAGR of 4.5%. For the same time period, the US market is projected to grow at a 3.4% CAGR.
The Key Opportunity and Trends in China
Once long overshadowed by the skincare market, haircare is emerging as a key segment for Chinese consumers. Inspired by the skincare industry, brands and consumers are instilling renewed energy into the haircare market by introducing rituals involving masks and oils. This is a trend being dubbed, the “skin-ification” of haircare. Brands are increasingly producing new types of high-end shampoos and conditioners, along with products for at-home hair regimens.
The market is projected to be driven largely by elevated concern around hair health, hair loss and sensitive scalps. According to a survey released by the China Association of Health Promotion and Education), approximately one in 6 Chinese people (over 250 million people), suffer from alopecia (hair loss).
The increasingly common problem is also affecting more young people, with Gen-Zs experiencing hair loss 20 years earlier than previous generations. People under 30 and those aged between 30 and 40-years old account for 69.8% and 25.4% of those going bald. As a result, consumers are investing in hair growth serums, scale care oils, vitamin-infused shampoos and organic conditioners.
According to DataTouch, hair and scalp care was the hottest personal category on most Chinese social media and ecommerce platforms in 2020. During the 618 shopping festival in 2022, demand for haircare products increased by 33.1%. There was such high demand that Tmall Global created a designated category just for scalp treatments. Following this, in 2021, sales of international scalp care products grew by 340% and sales of essential scalp oils grew by 170%.
In 2021, during the first 3 days of the world’s largest shopping festival, Double 11, the gross merchandise value of hair growth products among Gen Z consumers grew by 127.6% year-on-year. In addition, search results for scalp care items grew by 12 times year-on-year. revealing that consumers have a growing demand for these types of haircare products: anti-dandruff, hair stabilisation, colour protection, repairing dryness, moisturising, curling and silicone oil-free.
In 2022, demand for premium shampoos (costing over $18.20) grew faster than mid-market rivals, demonstrating a premiumisation of haircare products in China. This premiumisation trend presents brands with unique opportunities. Luxury brands with haircare lines such as Tom Ford, Burberry, Ralph Lauren and Ferragamo, can widen their customer base and offer customers a mix of entry-level luxury items and high-value premium products.
As usual, the main trendsetters for the haircare market are Gen Z and millennial consumers, who are also demonstrating a marked preference for online shopping and niche brands. Online and digital channels make up roughly 60% of the revenue share for haircare products, making them a key sales channel for haircare brands.
Interesting side trends include a growing preference for eye-catching hair colour. Many Chinese Gen Z consumers are adopting more expressive and colourful hair styles. They are often guided by trends like ‘dopamine’ dressing (wearing highly saturated and vibrant colours). Dyed hair gives consumers a medium to showcase their personality. Moving forward, hair colouring products will likely gain in popularity among Chinese Gen Z consumers. Another innovative category and growth point in the market is fragrant haircare. According to Taobao and Tmall, in November 2020, fragrant shampoo sales reached $56 million, a year-on-year increase of 192%. Between 2018 to 2020, on Tmall, sales of fragrant hair sprays grew over 400%.
International Haircare Brands in China
The major international haircare brands and conglomerates operating in China are Procter & Gamble, L’Oreal, Unilever, Beiersdorf AG and Kao USA Inc. Of these, Procter & Gamble leads China’s hair industry with a market share of around 34%.
One of the first scalp-health brands to launch on Tmall in 2018 was Parisian brand Christophe Robin. In 2020, Olaplex launched in China and is now the No.1 haircare brand and No. 12 brand overall on TMall Global, a list which includes mainland Chinese brands. Another brand dominating the Chinese haircare market is Kérastase, who opened a new retail store and its first experiential pop-up store at the Haikou International Duty Free Shopping Centre in Hainan province this year.
These brands quickly seized on the opportunity present, rapidly expanded their digital operations in the Chinese ecommerce market, and saw their sales boom.
Another strategy has been to snap up Key Opinion Leaders (KOLs) from Chinese social media to help amplify their messaging. Kérastase appointed Taiwanese actress Janine Chang and mainland actress Zhong Chuxi to be brand ambassadors, Aussie (Procter & Gamble) used Chinese pop idol Cai Xukun for its influencer marketing and Davines announced rapper Mark Tuan as its ambassador.
Many other brands have ventured onto the global cross-border stores and also the domestic social commerce stores. For instance, prestige haircare brand Oribe launched its official Tmall Global flagship store and its Xiaohongshu store account, which now has nearly 4.5k followers.
Ouai, founded in 2016 by celebrity hairstylist Jen Atkin, who is known for her work with pop culture royalty such as the Kardashians and Bella Hadid, emerged as one of the most talked-about haircare brands on Chinese social media. Acquired by Procter & Gamble, OUAI are one of the most popular and hottest brands in the emerging category of haircare in China. Their Xiaohongshu account has nearly 9,000 followers, while their Tmall followers are close to 68,000.
Overall, haircare brands have significant headroom to grow in China. Consumers are willing to pay extra for haircare products that will help solve the myriad of hair problems currently facing the younger Chinese generation. Haircare brands considering entering the Chinese market should seize on the market opportunity present.
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