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India Equity Research Reports, IPO and Stock News
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Hair oil: Roaring lion & not a dead cat
High penetration levels, changing preferences and growing popularity of other
form of conditioners have been perceived as concerns for hair oils at different
points of time. Defying all concerns, with a 20% Cagr in the last five years, hair oil
has been amongst the fastest growing HPC category. The trend is likely to
continue, thanks to factors like uptrading from loose/unbranded products along
with investments by players on creating awareness, innovative formats, A&P etc.
Interestingly, the power of hair oil in India’s context is also evident from the fact
that global majors (Garnier, P&G) have introduced products on hair oil platform.
Hair oil is largest hair care category in India; amongst top-5 HPC categories
Hair oil with an estimated market size of US$1.2bn is amongst the top five home
and personal care categories in India.
At 1.5x of shampoo and 3.5x of hair dye market, hair oil is also the largest hair
care category.
Interestingly, while Marico seems to have the highest association with hair oil today
due to its focus and the leadership…
…it was Dabur which launched first branded packaged hair oil ‘Dabur Amla’ in 1940.
Hair oil continues to be a rapidly growing segment…
Hair oiling as a habit has been prevalent for long on the belief that oils provide
nourishment to hair.
However, there have been concerns at various points of time on the growth
potential due to high penetrations, changing preferences in urban India, growing
popularity of other forms of air conditioners.
Interestingly, hair oil has grown at 20% Cagr in the last 5-years.
... thanks to unbranded segment as well as efforts by organised industry
An important reason for strong growth rates has been prevalence of local/ regional/
unbranded segment which has been paving way for organized players (uptrading).
For example, Marico estimates 40% of coconut oil market to be loose, even now.
Interestingly, despite one of the oldest personal care product, the industry has kept
the pace of innovations going and has aggressively rolled out new products…
… in various segments like problem solution (hair fall) or value added segment
(light hair oils) etc.
Action too has been visible in the level of A&P activity, with popular Indian film
stars endorsing the brands.
Marico’s pre-wash campaign was path breaking
Despite an important source of hair nourishment, there had been signs of decline in
its usage in urban India due to stickiness in the hairs.
Marico made a smart move and came up with an innovative idea of ‘pre-wash’
usage of hair oil in 2004 as opposed to traditional, post wash and…
… launched ad campaign highlighting its benefits with the tagline ‘one hour champi
kiya’ (hair massage one hour before the shower).
This not only gave a new dimension to age old oiling habit but also strengthened
Marico’s dominance in hair oil market; an internal study by Marico indicates that
sale of Parachute in a shampoo using urban household picked up post this.
Few interesting facts
Parachute coconut oil is actually classified as edible oil and not as hair oil and has
been enjoying excise (tax on production) exemption. The authorities have however
brought packs < 200ml under excise purview in 2009 which Marico has challenged.
At one point of time, HUL which was viewed as a key threat to Marico with its brand
‘Nihar’ (>15%+ share) which Marico acquired from HUL in 2006.
HUL, even today has oil under ‘Clear’, ‘Clinc Plus’ (shampoo brand) which are small.
Garnier and P&G have launched shampoos which also combine hair oil; Garnier
even has oil brand, ‘Garnier Ultra Doux’, both of which are again quite small.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hair oil: Roaring lion & not a dead cat
High penetration levels, changing preferences and growing popularity of other
form of conditioners have been perceived as concerns for hair oils at different
points of time. Defying all concerns, with a 20% Cagr in the last five years, hair oil
has been amongst the fastest growing HPC category. The trend is likely to
continue, thanks to factors like uptrading from loose/unbranded products along
with investments by players on creating awareness, innovative formats, A&P etc.
Interestingly, the power of hair oil in India’s context is also evident from the fact
that global majors (Garnier, P&G) have introduced products on hair oil platform.
Hair oil is largest hair care category in India; amongst top-5 HPC categories
Hair oil with an estimated market size of US$1.2bn is amongst the top five home
and personal care categories in India.
At 1.5x of shampoo and 3.5x of hair dye market, hair oil is also the largest hair
care category.
Interestingly, while Marico seems to have the highest association with hair oil today
due to its focus and the leadership…
…it was Dabur which launched first branded packaged hair oil ‘Dabur Amla’ in 1940.
Hair oil continues to be a rapidly growing segment…
Hair oiling as a habit has been prevalent for long on the belief that oils provide
nourishment to hair.
However, there have been concerns at various points of time on the growth
potential due to high penetrations, changing preferences in urban India, growing
popularity of other forms of air conditioners.
Interestingly, hair oil has grown at 20% Cagr in the last 5-years.
... thanks to unbranded segment as well as efforts by organised industry
An important reason for strong growth rates has been prevalence of local/ regional/
unbranded segment which has been paving way for organized players (uptrading).
For example, Marico estimates 40% of coconut oil market to be loose, even now.
Interestingly, despite one of the oldest personal care product, the industry has kept
the pace of innovations going and has aggressively rolled out new products…
… in various segments like problem solution (hair fall) or value added segment
(light hair oils) etc.
Action too has been visible in the level of A&P activity, with popular Indian film
stars endorsing the brands.
Marico’s pre-wash campaign was path breaking
Despite an important source of hair nourishment, there had been signs of decline in
its usage in urban India due to stickiness in the hairs.
Marico made a smart move and came up with an innovative idea of ‘pre-wash’
usage of hair oil in 2004 as opposed to traditional, post wash and…
… launched ad campaign highlighting its benefits with the tagline ‘one hour champi
kiya’ (hair massage one hour before the shower).
This not only gave a new dimension to age old oiling habit but also strengthened
Marico’s dominance in hair oil market; an internal study by Marico indicates that
sale of Parachute in a shampoo using urban household picked up post this.
Few interesting facts
Parachute coconut oil is actually classified as edible oil and not as hair oil and has
been enjoying excise (tax on production) exemption. The authorities have however
brought packs < 200ml under excise purview in 2009 which Marico has challenged.
At one point of time, HUL which was viewed as a key threat to Marico with its brand
‘Nihar’ (>15%+ share) which Marico acquired from HUL in 2006.
HUL, even today has oil under ‘Clear’, ‘Clinc Plus’ (shampoo brand) which are small.
Garnier and P&G have launched shampoos which also combine hair oil; Garnier
even has oil brand, ‘Garnier Ultra Doux’, both of which are again quite small.
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