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Hair Color

Category, Competitor and


Customer Analysis
Dr. Rohit Trivedi
MICA

Whats happening.
Have you seen your elder cousin/non-trendy
professor/fashionista friend using hair color
recently ??
Hair color is a part of the cosmetics industry
and has been growing at a CAGR of 25%
Total category is valued at more than INR 16
bn.
Poised for Growth ??

Category, Competitor and Customer


Analysis

FMCG A Snapshot
Personal Care Growth prospectus
Hair Color Market Overview
Types, Trends and Techniques
Distribution Channel
Brand Share
Major Competitor
Brand User and usage insights
Competitor Analysis and Profiling
Porters Five Force Analysis
Market Size and Market Share Analysis
Industry Trends
Drivers and Challenges

FMCG - Overview
FMCG :
Fourth largest sector in economy
Lower CAPEX Higher RoCE
Highest % expenditure Brand building
Contract Manufacturing
USP: Wide distribution network
Product Category introductgion-leg
Lower per capita consumption
Low rural penetration
Lower selected category penetration
Source : KPMG Indian FMCG Market Giant Unleashed

FMCG - Overview
FMCG

Personal Care
Indian personal care market is ranked 13th
globally
Size of approx. USD 6 bn
Moving from health to beauty
Skin whitening most popular claim
Category becoming more gender specific
Higher-priced new launch is an emerging
trend

Source : Cosmetic-business "Indian cosmetics market continues to

Personal Care Category


Share

Source : Tata Strategic Management Group Outlook for personal


care ingredients industry: An Indian perspective, 2009

Growth in Personal Care


Category

Source : Euromonitor International Consumer Lifestyle in


India March 2012

Hair Care
Second largest segment of Personal
Care
It comprises of oneeighth of the fast
moving consumer goods market
Hair care grows by 17% in 2013 to
reach INR135.2 billion from INR 100
billion in 2011
Colourants continues to record the
fastest current value growth of 25%
in 2013

Hair Care

Value of Hair Color market : Approx. INR 16 bn as on


March, 2012.
Source : Business World Race For Crowning Glory; Aug
2011

Hair Care

Total market penetration 35% ??


Rural - ?? Urban - ??
Is it a nascent or emerging category ??
Source : Business Today Indian cosmetic market is all set for

2004

2005

Hair Color Growth


Trajectory

2006

2007

2008

2009

2010

2011

2012

2013

3,818.3 4,715.6 5,721.3 6,871.6 8,195.1 9,691.9 11,656.1 15,420.4 19,882.0 24,778.0
0
0
0
0
0
0
0
0
0
0
30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Hair Color Changing


Trends
Shift in perceived need of consumption from
covering grey hair to ???
Only 20% of Indian women use hair color as
compared to 90% in developed markets
Hair color products have largely been aimed at
1545 age female segment -????
Hair color use among male Less than 3%
(Surprised ???)
Source : Business World Race For Crowning Glory; Aug
2013

Hair Color - Types


Comes in a variety of delivery
format Powders, Liquids, Oilbased gels and
Creams

Hair Coloring Techniques

Ton-on-Tone
Nonammonia dyes
Not to lift the base color of the hair but one can have it infused
with an arresting tone

Highlighting/Streaking
Anything from large strategically placed chunks of color to a
more subtle back-toback weaving or slicing techniques can be
employed to give either an outr or more traditional coloring of
ones preference

Global Coloring
All the hair is colored from root to end
Radical transformation (like bright red mop) or even settle for
more honey or chocolate colored tresses

Grey Coverage

Distribution Channel

Source: Indian Franchise Association; business standard Garn(i)ering


volumes, Oct 2010

Market Size and Market Share


Analysis

Major Competitor and


Brands
Company
Brand
Categories
Renew

Cream /Powder

Expert Original
Godrej

Expert Care
Expert Advanced

Powder

Nupur
Kali Mehandi
Colour Soft

Cream

Casting Crme Gloss


Excellence Crme
LOreal

Inoa
Garnier Color Natural

Cream

Major Competitor and


Brands
Company
Brand
Categories
Colorsilk
Revlon

Top Speed

Cream

Color n Care
Frost & Glow
Hygienic Research Streax

CavinKare

Cream

Vasmol

Powder

Indica Herbal Hair


Colour Natural Black
and Brown

Powder

Hair Color Brand Share

Market Share Analysis

Hair Color Competitor


Analysis
Godrej is the market leader in the hair
color segment with a market share of
around 25%

Hygiene Research with product


Vasmol and Streax is an emerging
player for mid-segment
Garnir, Loreal and Wella have capture
the premium hair color market

Hair Color Competitor


Analysis
Loreal with its premium brands Matrix,
Garnier and Loreal Excellence account
for more than three-fourths of creambased hair color market

New Product Development is not a


strong phenomenon in the category
All the players are MNC with deep
pocket to finance marketing expenditure

Competitor Profiling
Godrej Consumer Products Ltd
A market leader in the hair color market and
follows a 3 by 3 marketing strategy
presence in 3 continents through 3 core
categories
Its care business grew by 19% for FY13
driven by robust sales of Expert range of
powder color and Nupur Mehendi
GCPL has acquired Darling Group, a leading
haircare company in Africa in 2012

Competitor Profiling
Hygiene Research India
Operates in India and market its
product across 15 countries
Has its flagship salons Streax Head
Turner all across India

Competitor Profiling
LOreal SA
LOreal India was established in 1993 when it
first entered the country in a joint venture with
MJ Group.
Has its presence in 130 countries and offers 23
global brands
It sells its products to hair salons; mass market
retail channels; department stores
Its ammonia and odorfree hair color Inoa was
used in more than 81,000 salons one year after
its launch in 2010

Competitor Profiling
Procter & Gamble Co.
Wella AG operates as a subsidiary of
P&G and is headquartered in
Darmstadt, Germany
Wella Professionals has earned its
title as the global authority on hair
color
It has relaunched both the
permanent hair color line Koleston
Perfect and Color Touch demi

Competitor Profiling
Revlon Inc
One of the strongest consumer brand
franchises in the world with its
products being sold in over 100
countries across six continents
It markets its products primarily under
Revlon ColorStay, Almay Intense i
Color, Almay Smart Shade, Revlon
ColorSilk and Gatineau brand names

Porters Five Forces Analysis


Buyers power:
Strong
Threat of
entry
Medium

Industrial
rivalry :
Low/Medium
Suppliers power:
Low

Threat of
substitutes
Low
Thus, overall the
category is
profitable

Major Brand Insights

Brand Analysis

Brand Objective
Brand Positioning
Brand Promoter
Value Proposition
Differential Competitive Advantage (USP)
Brand Strategy
Expected future strategies
Target Market, their key expectations,
usage and socio-psychographic make-up

Brand Positioning
Can we identify how they are positioned ?
What is their core value proposition ? How are they
different ? (or not so different ?)
What is their TG ?
Core marketing strategy? How it has evolved ?
What could be possible strategic future direction for
the brand ?

Brand-User Insights
Godrej Leader in both Dye and
Color
Dye used by people in age category
45 years and above
Color more prevalent in 25-34 years
SEC AB Female Color Natural, Color
Soft

Brand-User Insight
Rural
Consumption by R1 and R2
Hair Dye more prominent

Urban
Hair Dye prominent in SEC C and lower
Color Natural and Color Soft most
prominent
Highly dominated by SEC B

Brand-User Insight
Media
TV, Friends and Retail Showroom are
most promient
Media awareness high for both Dye and
Color
Most favourite for Dye : Family Drama
and Comedy
Most favourite for color : Reality show,
sports and News

Brand - CB
Autonomy
Hair Color associated with autonomy

Discount
Hair color and Dye Extreme
differentiation

Value for Money


Dye is more associated with value for
money

Usage
Low Penetration about 20%
Equal usage by Male and Female
Usage equally spread among age
group
More usage by SEC B then SEC A

Hair Color Industry Trends

Usage of Herbal Products


Tieup with salons
Brands seek to be natural
3D Color service

Usage of Herbal Products


Consumers opting for ammoniafree or
herbal hair care products, especially in
the hair coloring segment
Growing demand for products offering
nourishment benefits usually associated
with natural ingredients

Source : Business Standard Herbal products add colour to hair

Tie-up with Salons


Partnering with beauty salons to train
beauticians
L'Oreal's Professional Products first to
start initiatives in in 1997
GPCL targeted barbers and salons in
rural areas
Application of specialized products like
3D Color

Salon Segment
Salon
Segment

Buying Criteria

Pricing
Power of end
customer

Differentiatio
n

Luxury

Brand, Quality

High

Exclusivity for
use of the
product

Premium

Quality, Price,
Availability,
Specialization

Moderate
High

Salon specific
brand created
by co.

Mass
Premium

Quality, Price,
Margin,
Availability

Moderate

Private Labels

Mass

Price, Availability

Low

No
differentiation

3D Color Service
In this, panels of color are outlined and
layered on top of each other and different
shades are graduated
This gives an illusionary effect of added
depth and dimension for an upgraded
color look
The idea of colors fading from one into
the next without any real demarcation
gives an enhanced 3D look
Wella Professionals unveiled their
Autumn/Winter 2011 Seasonal Collection
which featured this innovation in hair
color 3D Color Effects

Brand seeks to be natural


Products such as natural hair colorants
and styling agents are beginning to
gain force in hair care segment
Penetration of these products is very
low even in urban markets
Though it is not possible to have a
complete natural hair colorant, players
are looking to introduce products that
have limited chemicals in them
Source: mydigitalfc.com Hair color brands seek to go

Hair Color Drivers and


Challenges
Increase in disposable income
Growth in fashion conscious
consumers
Rise in organized retail
Increase in awareness
Increase in Mens grooming
Adverse impact on health

Hair Color Drivers


Increase in disposable income

Source : McKinsey Global Institute Rise of Indias consumer


market, May 2007;

Hair color - Drivers


Growth in fashion conscious consumers
Increase in the population of women in the
age bracket 1549 is impacting growth
positively
Working population, in India today, have
started paying more attention to their
personality (Corporate identity
syndrome ??)
More as Personality enrichment rather
than Deficiency hideout

Hair color - Drivers


Increase in Awareness
Players have been focusing on product
differentiation by highlighting the
description of the product formulation as
well as the benefits of the same

Hair color - Drivers


Increase in Male Grooming
Market estimated to be around Rs 1250
mn
More male opting for hair color
treatment while going for hair cut
More consumption emerging in age
category 18-40

Hair color - Drivers


Increase in organized retailing
FDI in retail a boom for FMCG at large
More option for comparison and
differentiation

Hair color - Challenges


Perception among consumer about
health problem emerging due to hair
color chemicals
Link between hair dye and possibility
of cancer
Allergic reaction due to certain hair
color