19 Jul 2021
Posted in Consumer
E-commerce to push APAC haircare market growth at 3.7% CAGR through 2025, says GlobalData
The Asia-Pacific (APAC) region was the second-largest global haircare sector market with value sales of US$30.3bn, accounting for a share of 32.9% in 2020. Benefiting from the high living standards, rising health consciousness and growth of e-commerce channel, the APAC region is forecast to grow at a value compound annual growth rate (CAGR) of 3.7% between 2020-2025, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Opportunities in the Asia-Pacific Haircare Sector’, reveals that the shampoo category led the sector in value terms with 51.6% market share in 2020. The salon haircare category is forecast to grow the fastest in value terms, at a CAGR of 7.6% while the hair colorants category is projected to register highest volume CAGR at 4.9% during 2020–2025.
The report identifies Australia, Malaysia, Vietnam and Thailand as the high-potential countries based on GlobalData’s unique scoring system, which involves the risk-reward analysis derived from multiple metrics. These metrics include market size and growth analysis, besides the political, economic, social, and technological assessment of 26 major economies in the APAC region.
Among the high-potential countries, Thailand accounted for the largest value share of 4% in the overall APAC haircare market in 2020 while Vietnam is forecast to register the highest value and volume CAGRs of 11.6% and 10.1%, respectively, over 2020-2025.
Nilanjan Dutta, Consumer Analyst at GlobalData, says: “The APAC region is expected to register high annual volume growth compared to all the other regions during the forecast period, underpinned by rising disposable income levels, and social aspirations in countries across region, enabling consumers to spend more on haircare products. In addition, large millennial population, which is known to pay high attention to appearance and seek innovative products, is poised to drive further growth in the sector.”
‘Hypermarkets & supermarkets’ was the leading distribution channel in the APAC haircare sector, with a value share of 28.3% in 2020, followed by convenience stores with a 19.5% share.
In terms of per capita expenditure (PCE), shampoo category led the sector with US$3.8 in 2020. It was followed by conditioner and hair colorants categories with PCEs of US$1.9 and US$0.8 respectively, in the same year.
Consumers’ growing distrust of chemical and synthetic ingredients has led to the launch of more haircare lines with ‘natural’ and ‘organic’ tags. Moreover, growing consumer awareness of the negative ecological impact of greenhouse gas emissions is driving interest in ‘green’ personal care products.
In line with the trend, Australian manufacturer ‘Nature’s Organics’ claims to have the lowest possible negative impact on the environment while making its products and it offers its haircare range in 100% recycled HDPE bottles to appeal to eco-conscious consumers
Mr. Dutta concludes: “Driven by a more holistic understanding of health and wellbeing, the demand for haircare products that go beyond providing aesthetic enhancements is growing. For example, natural, botanical ingredients with calming or soothing effects are commonly used. However, the natural haircare market in the region faces a challenge in the form of green washing, with the brands making false claims of being natural or containing natural ingredients, which will affect the legitimate natural brands.”