The premiumization of the haircare market in China makes room for “skincare-style haircare”

In a similar way to China’s skintellectual movement in the skincare industry, attention is now being drawn to premium hair care, as healthy and supple hair has gradually become consumers’ further pursuit of beauty. Hence, China’s haircare market is growing both in size and premiumization. The total revenue was about 57.4 billion (RMB) in 2021, and is expected to have a CAGR of around 6.5%, leading to a market size of about 72.6 billion (RMB) in 2026 (converted from USD).

China’s haircare market is mainly segmented by shampoo, conditioners and masks, styling products, and colorations. Distribution channels include offline channels like supermarkets, convenience stores, and specialty stores, and online channels such as Taobao, TMall, and JD.

China's haircare market size
Data source: euromonitor, QianZhan, Statista, graphed by daxue consulting, China’s haircare market size from 2011-2026 with estimations

Consumer trends in China’s haircare market

Hair growth products face a rising demand

According to data from China’s National Health Commission in 2019, more than 250 million people in China are suffering from hair loss, of which about 163 million are men. People aged between 26 and 45 accounts for two-thirds of the total number. About 88 million are women. Due to the increased work pressure and irregular schedules of young adults, the problem of hair loss has become more pronounced.

The rapidly rising purchasing power of Chinese residents and the rising number of middle-class families means the start of a new round of consumption upgrades. The huge population base and the generalization of hair issues have laid a solid demand foundation for hair growth products in China. Domestic residents pay more attention to personal image and gradually focus on physical health and care, which directly promotes the growth of the hair growth product market.

Gen Z prefers DIY hair dye to experiment with colors

Compared to professional hair salon services, the cost of homemade hair dye is relatively low, with prices ranging from tens of yuan to one or two hundred yuan. At the same time, dyeing hair at home is more convenient, and timesaving, which appeals to the busy young Chinese generations.

Another notable trend is the preference for catchy hair color. Students in China are restricted to either dye or perm their hair according to the “Code of Conduct for Middle School Students.” Graduating from school means accessing freedom to pursue beauty in their sense. According to the report “Generation Z Beauty Consumption Trend report” jointly released by CBNData and Taobao Live ON MAP, in the past three years, the online consumption of coloration products by Generation Z has increased year by year in China. Although brown remains the most popular color, the proportion has gradually decreased and Chinese youth developed a preference for colors like blue, gray, and pink.

Gen Z report enjoying the process of dying their hair. DIYs give them a sense of accomplishment, a way to showcase personality, and how to dye a special hair color becomes an ice-breaking topic for socializing. Gen Z favors the unique characteristics of DIY hair coloring and therefore will purchase more coloration products.

Leave-in haircare (免洗护发) fits with the developing  “lazy economy”

The lazy economy refers to a new type of consumption, which by nature is time-saving, labor-saving, and convenient. The “lazy economy” has grown rapidly because it meets people’s diversified and ever-increasing consumer demands.

The leave-in haircare products emerging on the market correspond with the tendency of a “lazy economy”. According to the “Tmall Hair Care Industry Consumer Trend Insights” report jointly released by CBNData and Tmall, “lazy” haircare products like dry shampoo have gradually become the new favorites in the market.

Fragrant haircare is increasingly popular

As Chinese younger consumers have growing expectations for their haircare products, sub-categories such as fragrance care, household fragrance, fragrance cleaning start to emerge. Fragrance haircare, as an innovative category, is becoming a new growth point in China’s haircare market.

According to Taobao and Tmall data, in November 2020, Taobao Tmall fragrance shampoo and haircare sales reached 410 million yuan, with a year-on-year increase of 192%. From 2018 to 2020, online consumption of fragrant hair sprays on TMall had a growth of over 400%.

The consumption activity for fragrance care products in the online market is evident.

However, the top 3 sellers remain renowned brands: Adolf, Kashy, and Schwarzkopf. But from another perspective, this also provides more opportunities for more emerging brands to rise.

Key characteristics of haircare consumers in China

Consumers tend to purchase online

The scale of China’s haircare market is gradually expanding. The online market size in 2020 was about 19.2 billion (RMB). In the second half of 2020, the online haircare market has grown by 60% compared to the same period last year. According to Statista, about 66% of haircare transactions took place online in 2021.

“Skincare-style haircare” gives room for product subcategories

In recent years, as the pace of work and life has accelerated, young people have paid as much attention to hair as skin. The traditional “shampoo + conditioner” standard combination can no longer meet their needs.

The modern hair-care routine includes several steps. First, there is the pre-wash repair hair mask before shampooing, then shampoo and conditioner, and finally haircare essential oils and scalp moisturizing essences before spraying hair smoothing spray. For the most obsessed, there are also weekly scalp cleansing and advanced ampoule care. The level of sophistication haircare routines has now become similar to that of skincare routines.

Behind the rise of “skincare-style haircare” is the surge in young people’s needs for anti-hair loss and scalp care. The concept of “skincare-style haircare” has been used more and more frequently in the past two years. At the same time, more and more brands have implemented this concept in their product lines, and their investment in specialized products has increased significantly.

High-end products are growing the fastest

High-end shampoo products above 120 yuan have the fastest growth. The upgrade is mainly led by international brands such as Hair Recipe, Lu, Kashi, L’Occitane, etc. Domestic brands Adolf and KONO have strong competitiveness in the product price range of 40-80 yuan.

In the conditioning section, the consumption of high-end haircare of 120 yuan and above accounts for nearly 40%, and the growth rate is twice that of the lower-end market. It has huge potential. In the China haircare market, the mid-to-high-end market is occupied by foreign brands.

Competition between foreign and domestic haircare brands in China

The Chinese haircare market is competitive and fragmented by many international and domestic brands. Key players include P&G, Unilever and L’Oréal.

P&G’s China market strategy

Source: sina.com, “brands of P&G in China”

In 1988, Procter & Gamble opened the door to the Chinese market with a bottle of Head & Shoulders shampoo at 19 yuan per bottle. After Head & Shoulders’ success, Procter & Gamble also introduced Rejoice and Pantene, which belongs to its hairdressing series, into China.

Source: Head & Shoulders “anti-dandruff shampoo in China”

Introducing different brands and products for different target markets

Each brand of Procter & Gamble targets specific consumers’ needs. For example, the characteristic function of “Rejoice” is to make hair soft and smooth like silk. The main function of “Head & Shoulders” is to remove dandruff. “Pantene” is mainly to repair damaged hair. “Sassoon” is against L’Oreal Professional salon products. “Clairol” has the selling point of herbal fragrance. Procter & Gamble has achieved a very high market share in various fields of the daily chemical industry through a multi-brand marketing strategy.

Key takeaways of China’s haircare market

  • The Chinese haircare market is still expanding quickly with a focus towards higher-end products.
  • Various new trends like hair growth, hair coloration, leave-in haircare and fragrance products are emerging along with the market expansion.
  • The younger generation, especially Gen Z will have more detailed requirements for haircare products.
  • The product segmentation will be more diverse, each with specific target markets.
  • Online sales channels have proven to be vital.
  • Innovative rising brands will have opportunities in segmented markets.

Author: Michael Ling

Learn about the beauty market in China