Future of Indian luxury industry

The beauty needs of Indians are as diversified as the country itself. This is especially true for the hair care domain, as no two women, even with the same DNA, have the same hair type. From bouncy curls to voluminous waves, Indian women boast diversified manes. With a wide spectrum of hair types in the country, it is no more conducive for several customers to be using the same type of products – what works for one, might not work at all for another. It is precisely for this reason that the entire hair care industry is gearing up to diversify and address the multifaceted needs of Indians.

Hair care is one of the steadiest growing segments within the beauty industry, as well as one of the most promising future growth drivers. A 2018 report by Technavio estimates that, by 2023, the global hair care industry will grow to almost USD15 billion.

But, with ever-evolving sensibilities and preferences driving a major change in the way consumers choose products and services, is the luxury hair care industry ripe for disruption? The answer, in one word, is yes – and India, with its vast and growing young population, is standing right at the cusp of a massive transformation when it comes to hair care.

Personalisation, safety and sustainability: The future of the Indian luxury hair care industry

The disruption of any industry is championed by 2 main factors – one is when new players enter the fray and the second is when the needs of the consumers change. This is the exact scenario that is currently dominating the hair care industry in India, which makes it a prime candidate for large-scale disruption.

For the longest time, almost 95 per cent of the hair care industry was monopolised by a handful of brands, which offered limited options to consumers. Customers did not have access to any personalised solutions that catered to their specific needs. However, as consumer sensibilities evolve, these trends are now rapidly changing.

India is expected to become the youngest country in the world by 2020. More than 600 million of its citizens are currently below the age of twenty-five. No other nation – not even the more-populous China – can claim to have more young people living within its borders.

Since an early age, these new-age millennial consumers have been exposed to and influenced by global cultures and fashion trends in a way that their preceding generations never were. They have greater purchasing power and the aspiration to gain unique high-end experiences. They want and demand premium products and services, and are not afraid of spending a little extra to gain access to a luxury experience that is customised to their specific tastes and preferences.

Furthermore, new-age consumers are now identifying their own diverse needs and looking for personalized solutions that are tailored to their hair types. While product prices are taking a back seat, it is what goes inside a product that is becoming the main point of interest for consumers. Today, if consumers are pitched a new product or treatment, they will consider it only after looking up the ingredients and the effect of these ingredients on their hair. The average consumer now knows that organic, plant-based products are good for their body while additives such as sulphates and parabens are harmful. Simply put, consumers are aware of what they need from their hair products, and will choose only those that suit these needs.

More importantly, they are more woke. Millennials are more conscious about the social, environmental, and ethical dimensions of their purchase decisions. They hold the brands and the products in their consideration set to a high standard of social responsibility. As a recent Quinnipiac University study about Nike’s ad featuring disgraced NFL quarterback Colin Kaepernick highlighted, brands can improve their purchase sentiment amongst millennial consumers by associating with social issues that they care about.

All of these aspects are driving a drastic change in the Indian luxury hair care industry. Luxury hair care brands in the segment are now beginning to wake up to the fact that a ‘one size fits all’ approach will no longer work, especially in a market as diverse as India. When there are so many diverse problems, there cannot possibly be just one solution. Customers now want solutions that cater to their specific hair care and beauty needs and are therefore introducing specialised products to address the market demand. There is also a push towards cruelty-free, organic, ethical and environmentally sustainable business practices, from the sourcing of raw ingredients to product production.

Another factor that is driving the disruption in the industry is the fact that consumers want more options and flexibility. They often do not have the time to go to a beauty salon or sit for hours to get their hair treatment, and would rather prefer something that is easy to use and conveniently applicable at home.

And then there is the element of safety when it comes to using a hair care product. The Indian market has typically been overflowing with unsafe, even toxic products that have an adverse effect on consumers. This, in the hair care industry, is simply unacceptable, which is why there has been a significant shift towards unadulterated, FDA (the US Food and Drug Administration) approved, and cruelty-free products.

The Indian hair care industry is currently valued at INR 22,500 crore or USD 3.3 billion and is growing at a compound annual growth rate (CAGR) of 9.6 per cent. Having traditionally been dominated by a select handful of brands, changing customer demands have left the segment ripe for disruption. There is space for brands with better, more customised products to come in, address the existing market gaps and achieve significant growth – all the while delivering an unparalleled hair care experience to customers across the country.

*Disclaimer: The article has been provided by Saania Singh, Co-Founder, Zero Gravity Aesthetics. The opinions expressed in tis article are the personal opinions of the author. The facts and views appearing in this article do not reflect the views of Deccan Chronicle and Deccan Chronicle does not assume any liability or responsibility for the same.