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| Henkel focuses on Rs 400-cr salon market |
| Viveat Susan Pinto / Mumbai Jul 12, 2011, 00:16 IST |
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The haircare business of Henkel India, sold by German parent Henkel AG to group subsidiary Henkel Adhesives, is looking to strengthen its presence in the competitive salon market. The space is dominated by rivals such as Lóreal and Procter & Gamble (P&G).
The move comes after Jyothy Laboratories' acquisition of majority stake in Henkel India.
The haircare business, whose revenues were over Rs 45 crore in the last calendar year, has brands such as Schwarzkopf Professional and Seah at the premium and luxury ends of the market. This has also been a profitable unit of Henkel, which prompted the move by the parent to wrest control of it prior to Jyothy's acquisition of stake.
The unit has added a mass-market brand called Indola to its list in an attempt to target the lower-end of salon market.
The plan, according to K A Murali Sundar, country head, Henkel Cosmetics (Professional), is to improve reach with the new launch. "Schwarzkopf and Seah are basically available in salons located in metros and mini-metros.” he said.
The salon segment in India is Rs 300-400 crore with both local and international companies pushing their products aggressively through stylists, hair-dressers etc. The market is growing at around 15-20 per cent per annum with more growth likely as acceptance of styling, straightening and colour products increases in India.
In the current pecking order, Lóreal Professional, which competes head-on with Henkel's Schwarzkopf in terms of pricing and positioning, is number one, followed by Schwarzkopf and P&G's Wella, both at number two. Lóreal's luxury brand Matrix is number three.
Sundar said with Indola, Henkel will add another 6,000 salons to its current list of 5,000 in the months ahead. The business unit has launched hair colour and straightening and curling products in the first phase. Next year, it will launch shampoos, conditioners and styling products under the Indola brand name.
The company proposes to push its products through in-store merchandising, promotions and educational drives. The salon market typically operates by incentivising stylists and hair-dressers, who are given free trips abroad and trained at leading haircare academies there.
Sundar said unlike its rivals (P&G and Lóreal), Henkel has 80 company-owned academies across the globe. This, according to industry experts, helps keep the business model competitive, cutting down needless expenditure by tying up with external academies.
Globally, Henkel, which derives much of its haircare revenues from Europe, is focusing on emerging markets in a bid to expand its presence. Markets such as India, China and Latin America are on its radar, he added.
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