Market Trends of South Korea Hair Care Industry
Rising Incidence Of Hair-Related Problems
The rising incidences of hair-related problems, such as Alopecia areata, Telogen effluvium, and other issues among consumers, have led to the demand for effective hair care products across the region. Hair care products are commonly used by the consumer to avoid problems such as hair fall, dandruff, scalp itching, and other hair-related issues. There has been a growing awareness regarding the large availability of various hair care products, mainly in the hair oil, shampoo, and conditioner segment. Hair oils help increase the hair's strength and length; therefore, consumers are looking for hair oil according to their hair type, and the manufacturing is focusing on these areas of business which are fueling the sale of hair oil in the market.
Haircare products that go beyond their basic beautifying function to add 'improvised care,' such as products that go past moisturizing and provide natural humectant properties, are growing in popularity. Therefore, manufacturers are capitalizing on this trend and offering products with special formulations and exclusive ingredients in their shampoos and conditioner. Consumers are actively looking for products that contain products with a combination of Mayo, Shea Butter, Macadamia Seed Oil and macadamia nuts, which helps in defeating the fizziness of the hair by supplying ultimate hydration.
Moreover rising concerns regarding the harmful effects of pollution, increased direct exposure to ultraviolet sun rays, excessive use of hair care tools, such as hair straighteners and hair curlers, and frequent use of shampoos with harsh chemicals are expected to drive the demand for nourishing hair care products.
Online Retail Channel Is Expected To Be The Fastest Growing Segment
In recent years, there has been a surge in the online penetration of beauty and personal care products. Factors attributed to the growth include reasonable prices and various promotions used by online shopping portals, discounts and coupons available for the latest launched products, and online portals offering insights about new makeovers and beauty ideas.
The online retail channel is witnessing one of the highest growth rates in South Korea as the trend of online shopping is gaining momentum, as it is convenient for consumers to buy products online, thereby avoiding crowded stores. Also, consumers have the luxury of browsing and shopping for products 24x7 from the comfort of their homes. The trend gained momentum, particularly after the COVID-19 pandemic to purchase a variety of hair care products online to save time.
As per L'Oréal's 2021 annual results, the company's sales increased by 62% for e-commerce across all divisions and all regions, accounting for about 26.6% of the total company's sales for 2020. Therefore, players operating in the beauty market focused on streamlining their supply chain during the pandemic period with an increased focus on online marketing
As online marketing and advertising is more economical and profitable, it has been observed that hair care brands have started using e-commerce to launch their new products, increase their consumer base and gain profitability, in addition to gaining brand loyalty and offering customer satisfaction.
For instance, in September 2021, Drunk Elephant, a Shiseido Company Limited brand, expanded its distribution channels by introducing its product lines to ultra-beauty stores online and offline in the region.
