Hair Care Analysis LATAM Market Intelligence

Industry Outlook & Drivers

Regional market Outlook On Hair Care Analysis for LATAM

Latin America is estimated to account for almost a quarter of the global hair care market and this reflects the volume of demand generated in South America alone, for hair care products

Brazil dominates the hair care market in terms of value in Latin America and is nearly triple the Mexican market and more than quadruple of the Argentinian hair care market

• In 2015, the country's economy reeled from government overspend and political crisis which led to lower spend where consumers traded down to cheaper brands
• The Latin American hair market has a rising demand for premium and luxury hair care products
• The hair care market in this region is currently showing signs of maturity and there is a shift towards more targeted and segmented products that tap into the specific needs of the local consumers
• This region is moving towards the natural space and this opens up opportunities to lure the mass-centric market to trade-up in the interest of their health

Hair Care: Category Summary

The hair care market is a very dynamic industry in Latin America and this region witnesses over 2500 product launches every year. It is very important that brand owners have innovation in the pipeline to develop new hair care products

Hair Products in Demand:  In countries like Mexico and Argentina, consumers demand for basic treatments (shampoos & conditioners) and styling products. In Brazil, consumers want products focusing on hair treatment and pos-shampoo. Also, women in Brazil are wearing their hair in its natural state. So there is a boom for products that suit the high degrees of miscegenation among the Brazilian population.

Growth of Premium Market: The premium hair care market has grown twice as fast as the mass market products. Despite the unfavorable macroeconomic conditions,  the premium category grew by over 15 percent , reflecting consumers' preference for products with higher-quality ingredients and recognized brand names.

Innovation:  There has been a stable stream of new product launches targeted at increasingly popular niche markets addressing specific consumer demands.

Target Market:  The rising middle class with disposable incomes, growing young generation and increasing number of women in the workforce (currently occupying about 50 percent of the workforce) drive growth in hair care. Consumers average annual spend on CFT products amounts to approximately 4 percent of their personal income.

Sustainability: Plant based ‘natural' and organic ingredients are dominating hair care product development. Plant-based ingredients help the apparent “naturalness” of products, thereby leading to an array of benefits such as moisturizing and nourishment.

Macro-economic Trends : A slow economy and high inflation rates had led many consumers to shorten routines and cut back spending on anything beyond the basic. However, the market is slowly picking up.

Brazil Hair Care: Market Outlook

The Brazilian hair care market has displayed the strongest incremental growth and is driven primarily by the shampoos/conditioner market

The penetration rates of leave-in conditioners and shampoos in Brazil are the highest when compared to mature markets such as Europe and the US

Drivers:

• High demand for hair care products for care at home and in salons
• Large hair care segmentation on the basis of hair types and geography
• Increasing purchasing power

Challenges:

• A slow Brazilian economy
• Rising cost of hair care products
• Threat of counterfeit products

Brazil Hair Care: Competitor's Analysis

Unilever Brasil leads hair care, with stronger brands such as Seda, Dove and TRESemmé in its portfolio. L'Oréal is the leading player in this category, due to its controlling position of Niely do Brasil Industrial Ltda from a global brand owner standpoint

Multilatina companies such as Natura and Belcorp lead sales through their ability to offer products specifically relevant to local demographics

• Brands by international companies are very perceptive in their ability to adapt products to suit the welfare of ethnically-diverse population in this region. These brands  still rely on their legacy and western popularity, and are struggling to maintain relevance
• Local players like Phitoteraphia Biofitogenia, Niely do Brasil (now, acquired by L'Oréal), Natura and others benefit from Brazil's hair care growth
• Hair care product segmentation is different in this region and hair care products fall under mass, masstige and premium are the brand categories
• The Brazilian hair care market has a buoyant demand for premium and luxury hair care products and is set to grow the fastest
• A number of professional brands like L'Oréal, Unilever (TRESemmé) & P&G (Wella range's Pro series), and other luxury brands like Mary Kay have made their presence in the region due to high demand and awareness regarding beauty