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A black, shiny market

Who said oiling your hair is passé? The action in the market by brands, through value additions, is keeping consumers hooked.

business Updated: Jul 15, 2012 21:48 IST
Himani Chandna Gurtoo
Himani Chandna Gurtoo
Hindustan Times

Shah Rukh Khan, Rani Mukherjee, Minissha Lamba and Genelia D’Souza endorse different hair oil brands. Amitabh Bachchan endorsed the same brand – Navratna – as SRK. Makes you wonder why so many film celebrities would want to endorse hair oils, which should have lost relevance by now as more sophisticated shampoos and non-oil hair care products promise to clean, moisturise, nourish and maintain your hair.

And yet "champi" is a fashionable word. Your favourite hairdresser also recommends regular hair oil massages. Hair oils command close to 50% of the hair care market. "We service 20-30 customers who come for hair oil massages every week, including many middle-aged customers who ask for a relaxing, refreshing hair oil massage," said Maryann Khullar, salon manager at Toni & Guy, Delhi.

“I do a champi before every hair wash, twice a week, because I have been using hair colours for the last three years,” said Kajal Verma, 30, a lawyer.

Companies say that while the incidence of styling and hair colouring has gone up in urban markets, the fear of chemicals harming the hair is an area of great concern.

“In the last five years, the hair oil industry has been registering healthy double digit growth mainly due to increasing hair damages due to lifestyle and environmental changes,” said Minoo Phakey, marketing head, hair oil, Dabur India.

“The more they damage their hair, the more conscious consumers will become. Our business lies just there – in serving that need. The market is getting very active and exciting – our annual growth rate is 20%,” said Sameer Satpathy, head, marketing, consumer product business, Marico.

Significantly, branded hair oils are riding on value additions, offering variants in order to create differentiation and excitement. So to Emami-owned Navratna’s ‘cool’ proposition, there is the ‘hot’ massage proposition from Marico’s Parachute, which has a 25% market share among branded hair oils.

“An entry into value-added hair oils offers easier differentiation from the regional and local brands, while establishing a brand identity,” Phakey said.

“The best part is, there is huge demand for the entire variant category. Consumers are demanding variety and tweaking,” said Satpathy.

Also, value additions help brands command a price premium over the no-frills oil brands. “We have doubled our sales over the last three years even though Navratna is among the costliest hair oils in the therapeutic segment,” an Emami spokesperson said. “Navratna is a Rs 300 crore brand, with a market share of over 54% in the cool oil segment.”

Over 100 scientists in Dabur’s labs work on improving its hair oil portfolio. “The team found that almond hair oil is the need of the hour considering the pollution and stress levels, and this led to the addition of the almond segment to our hair oil bouquet,” Phakey said.

Major companies such as Hindustan Unilever, Marico and Dabur are launching a slew of new products.

“The growth opportunity for the major players, especially in the coconut oil segment, lies in converting loose oil users to brands. The rapid shift to branded oils is expected to fuel competition over the next five years,” said Pragya Singh, associate director, Technopak, a management and retail consultancy. “Both Hindustan Unilever’s acquisition of Cococare and Marico's acquisition of Oil of Malabar have helped add volumes to their brands and gained them a better regional distribution foothold.”

Both herbal – such as Dabur’s Vatika – and non-sticky – Marico’s Hair & Care – hair oils have done well.

Looking beyond India, branded hair oil companies are targeting the Middle East and Africa too. “Exports to Middle East, CIS countries and Africa are growing. They are big markets,” Emami’s spokesperson said.

First Published: Jul 15, 2012 21:45 IST