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Indian Hair Care Industry

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    The hair care industry has grown a lot in the recent years. The reason can be attributed to the fact that a large portion of our Indian population is using higher quality branded products. Of the estimated Rs. 1, 611 billion FMCG market in India, hair care products make up approximately Rs. 91. 5 billion, or 8%, of the total according the Nielsen Retail Audit Report. The 14% growth rate in the hair care industry is also slightly higher than the overall industry average of 13. 4%. Shampoo and hair oils, including coconut oils, continue to be the key components of this segment.

    The marketing startegy of rural distribution campaigns adopted by the hair oil manufacturers and dealers have helped to greatly expand the geographic coverage of hair oil products into the rural parts of the country. In addition, average prices for hair oil products have risen from Rs. 22. 25 per 100 ml in 2008 to Rs. 23. 74 per 100 ml in 2009 according to the Nielsen Retail Audit Report. Hair Oil Categories There are three main categories of hair oil in India: The light hair oil segment has experienced significant growth in recent years as consumers opt for lighter, more modern hair oil products.

    The light hair oil segment recorded sales of Rs. 6,828 million in 2009 according to the Nielsen Retail Audit Report. Light hair oil is an urban dominated segment primarily due to its comparatively high cost & is more geographically concentrated, in the northern states of Punjab, Delhi, Uttar Pradesh and Rajasthan, due to higher disposable incomes and the propensity of consumers to try new products. The northern regions accounted for approximately 52% of sales volumes and grew by 10% (volume growth) in FY 2009-10 according to the Nielsen Retail Audit Report. The heavy amla hair oil segment has seen strong growth in recent years.

    The heavy amla hair oil market is primarily an urban driven market and tends to be geographically concentrated in the northern parts of the country. The heavy amla hair oil segment recorded sales of Rs. 7, 370 million in FY 2009-10, representing a growth rate of 4. 7% from FY 2008-09, according to the Nielsen Retail Audit Report. Cooling Oils have emerged as an important segment in the Indian hair oil market. Cooling oils are hair oils meant for cooling the scalp during the harsh summer months. The ingredients in the cooling oils cause immediate relief by cooling the scalp. The CAGR of the category has been 20% over the last 5 years.

    The cooling oil category is now nearly Rs. 7,000 million in the financial year ended March 31, 2010. Major Hair Oil Manufacturers in India Marico – is a leading FMCG Indian Manufacturer providing consumer products and services in the areas of Health and Beauty. During 2009-10, the company generated a Turnover of about Rs. 26. 6 billion, in respect of its food, hair care and skin care related activities. The organisation holds a number of brands viz. Parachute, Saffola, Sweekar, Hair&Care, Nihar, Shanti, Mediker, Revive, Manjal, Kaya Skin Clinic, Aromatic, Fiancee, HairCode, Caivil, Code 10 and Black Chic.

    The major brands of Marico holding significant market share are Parachute and Saffola. Parachute is essentially coconut oil. The other sub brands of Parachute are Nihar, Uttam and Oil of Malabar which are also coconut oils. It established a plant at Kanjikode, Palghat to manufacture ‘ Parachute Coconut Oil’. It also manufactures hair care products such as Coconut Oil, Hair Oils & Anti Lice Treatment solution, which are marketed under the brand names of Parachute, Hair and Care & Oil of Malabar. Among all the products offered by Marico, the most popular item is perhaps ‘Parachute coconut oil’.

    This unique product is manufactured from high grade coconuts and helps users in all their hair related ailments. Bajaj Corp. – Bajaj Corp Ltd is one of India’s leading FMCG company with major brands in Hair care category. It is one of the oldest business houses of the country. Bajaj Corp Ltd is part of Shishir Bajaj Group of companies. Brahmi Amla Hair oil is one of the brands with longest heritage in India from the house of Bajaj and has been a leading player in the Amla market for over 75 years. A hugely trusted brand with a very loyal consumer base, today it is among the top 3 brands in its category.

    Over the years, Bajaj Brahmi Amla has withstood severe competition but managed to retain its ground due to its superior quality. The different hair oil products that the company offers are Almond drops, Brahmi Amla, Amla Shikakai & Jasmine hair oil. Dabur India Limited – has marked its presence with significant achievements and today commands a market leadership status. Dabur Amla Hair Oil is India’s trusted hair oil. It contains the natural goodness of Amla (Indian gooseberry). Dabur Amla Hair Oil is today the largest hair oil brand in the country with over 35 million consumers. ster hair oil brands are Dabur- Ayurvedic healthcare products & Vatika – Premium hair care. Emami Ltd. – the flagship company of the Group, is a Rs 1100 crore business entity, a leading player in the personal and healthcare consumer products industry in India engaged in manufacturing and marketing of health, beauty and personal care products that are based entirely on ayurvedic formulation. Emami Limited has over 30 brands under its portfolio. By repeatedly outperforming the industry standard, Emami Ltd has maintained a CAGR of 27% over the last few years. Himani Navratna hair oil is one of the flagship brands of Emami Ltd.

    Navratna oil is among the top selling brands in india. Its traditional ayurvedic formulation along with the cooling sensation has multiple benefits of providing relief from hair related problems. It is the most trusted brand in the cool oil category. It commands a holding of 50% of market share of the cool oil market. It has a monopoly in the southern states with a market share of 98 %. Profile of Hair Oil Industry Profile of hair oil industry Unlike shampoos or hair colors, which are products relatively new to the Indian psyche, the usage of hair oil is a deeply ingrained habit with Indian consumers.

    Therefore, this is one product where the major players do not have to fight either monetary or psychological barriers to usage. But this does not necessarily mean that being a branded player in the Rs1, 300 crore hair oils market is easy. Hair oiling is an age-old traditional habit of Indians. Hair oil is perceived to provide benefits of nourishment, strengthening hair, faster and better growth and reducing the problem of falling hair. Some consumers perceive that massaging hair oil has a cooling impact on the head. It also has a cosmetic appeal in terms of hair styling, as hair remain straight, soft and shining after applying oil.

    Coconut oil is very popular in the south. In north people use coconut oil as well as some other oil such as rapeseed, sesame, etc. Hair oil is primarily used as a pre-wash nourisher. Some people also use hair oil after bath as a conditioner. Segmentation It is very important to segment the target market before selling or marketing your product. This will make the job of the marketer easier and simpler, as he will be aware and very clear as to what he has to actually do and decide the strategies thereby. The major positioning platforms for hair oil are purity, hair nourishing and more recently, non-greasy look.

    Coconut oil and perfumed oil accounts for about 65% and 35% of market in volume terms. Consumer Awareness and Penetration Hair oil is an everyday habit with about 50% of the population. Hair oiling, a peculiarly Indian habit, is extremely popular in urban as well as rural India. Penetration of hair oil is 87% at all India level and is almost evenly distributed in urban and rural areas. While penetration in urban areas is marginally higher at 90. 2%, the same closely follows at 85. 8% in rural areas. In urban areas, penetration is higher in small towns (0. 1-0. 5m population) at 91. % compared to medium and large town where it is 89. 5-89. 9%. Awareness about hair oil is over 90% in rural as well as urban areas. Market size The coconut hair oil market is currently estimated at Rs14bn, 60% of which is sold in branded form. The branded hair oil market is estimated at 70000 ton. The market has been growing at around 3-4% in volume terms and 6-7% pa in value terms. Market growth, although significantly lower than the shampoo market, is impressive, as penetration is already high. In fact, this growth rate has been maintained with strong marketing aggression by leading players in the segment.

    Growth. There are several consumers who use coconut oil in cooking (especially in the south), and conversely other edible oil classified as cooking medium (for e. g. castor oil) is used for hair care also. Therefore, the actual size of the oil market should be larger than what is estimated on the basis of branded hair oils. During the last few years, several product variants, such as non-sticky hair oil, value added hair oil, etc have become very popular. These variants are growing at a much faster pace, compared to the pure coconut hair oil segment. The market for these products is estimated at Rs4. 25bn and has been growing at 20-25% pa.

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