Haircare business embracing new trends
Premium products and increased adoption of a skincare approach for scalp health have become noticeable trends in the hair wash and care market in China in recent years, a senior executive at a multinational company said.
"Female customers in China, especially those who go to salons regularly, are looking at premium products with better quality these days," said David Tung, regional president of Henkel Consumer Brands Asia.
According to a report released by Chinese e-commerce company JD last year, online sales growth rate of high-end shampoo products priced 120 yuan ($16.7) or more reached 114 percent year-on-year, becoming the main driver of higher online sales of shampoos.
"Chinese consumers now also tend to use ingredients commonly used for the face, to achieve an enhanced scalp care effect," said Tung.
Frank Meyer, corporate senior vice-president, R&D, Henkel Consumer Brands, said scalp care is unique to the Asia market. "Asians are highly concerned about scalp care, which they believe promotes healthy hair," he said.
To better observe Chinese consumers' needs, the German company, which has consumer products under brands such as Schwarzkopf and Syoss, opened the Henkel Consumer Brands Asia R&D Center, the largest research and development facility for its consumer brands in the region, in Shanghai last week.
"China is undoubtedly a highly significant market within our Asia business, currently contributing over half of the market share in the region. This makes the establishment of the R&D center here at this time crucial for us," Tung said.
According to global market observer Euromonitor International, the market for hair wash and care products in China grew at a compound annual growth rate of 6.7 percent from 2019 to 2023, and is expected to reach 131.2 billion yuan in 2023. Foreign brands accounted for the most sales among those with the highest sales value.
With an investment of about 100 million yuan, the new R&D center aims to attract top scientific talent and strengthen the company's local R&D capabilities in the business categories of hair, laundry and home care.
Based on consumer habits and insights across 11 markets in Asia, the center also aims to facilitate flexible product innovation and further bring the company's consumer products to the forefront of the industry.
With the concept of innovation, digitalization and sustainability, the center covers an area of more than 2,500 square meters and includes functions such as consumer insights, cutting-edge technology research, product formulation development, packaging design, physicochemical analysis and product performance evaluation.
Yang Jufang, secretary of the Party Working Committee of the Investment Service and Development Center of Yangpu district, where the R&D center is located, said the project will further promote the company's localization-driven innovation.
"We also believe that other Yangpu-based enterprises, especially popular local internet brands such as Xiaohongshu and Meituan, will bring insights to the digital development of Henkel consumer brands and create win-win effects," she added.
