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Profile of hair oil industry

Profile of hair oil industry

Discuss Profile of hair oil industry within the Marketing Management ( RM , IM ) forums, part of the Resolve Your Query - Get Help and discuss Projects category; Profile of hair oil industry Unlike shampoos or hair colors, which are products relatively new to the Indian psyche, the ...



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Profile of hair oil industry
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Sunanda K. Chavan
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Profile of hair oil industry - September 27th, 2010

Profile of hair oil industry

Unlike shampoos or hair colors, which are products relatively new to the Indian psyche, the usage of hair oil is a deeply ingrained habit with Indian consumers.

Therefore, this is one product where the major players do not have to fight either monetary or psychological barriers to usage. But this does not necessarily mean that being a branded player in the Rs1, 300 crore hair oils market is easy.

Hair oiling is an age-old traditional habit of Indians. Hair oil is perceived to provide benefits of nourishment, strengthening hair, faster and better growth and reducing the problem of falling hair. Some consumers perceive that massaging hair oil has a cooling impact on the head.

It also has a cosmetic appeal in terms of hair styling, as hair remain straight, soft and shining after applying oil.

Coconut oil is very popular in the south. In north people use coconut oil as well as some other oil such as rapeseed, sesame, etc.

Hair oil is primarily used as a pre-wash nourisher. Some people also use hair oil after bath as a conditioner.


It is very important to segment the target market before selling or marketing your product. This will make the job of the marketer easier and simpler, as he will be aware and very clear as to what he has to actually do and decide the strategies thereby.

The major positioning platforms for hair oil are purity, hair nourishing and more recently, non-greasy look. Coconut oil and perfumed oil accounts for about 65% and 35% of market in volume terms.
Consumer Awareness and Penetration

Hair oil is an everyday habit with about 50% of the population.

Hair oiling, a peculiarly Indian habit, is extremely popular in urban as well as rural India. Penetration of hair oil is 87% at all India level and is almost evenly distributed in urban and rural areas. While penetration in urban areas is marginally higher at 90.2%, the same closely follows at 85.8% in rural areas.

In urban areas, penetration is higher in small towns (0.1-0.5m population) at 91.8% compared to medium and large town where it is 89.5-89.9%. Awareness about hair oil is over 90% in rural as well as urban areas.

Market size

The coconut hair oil market is currently estimated at Rs14bn, 60% of which is sold in branded form. The branded hair oil market is estimated at 70000 ton. The market has been growing at around 3-4% in volume terms and 6-7% pa in value terms.

Market growth, although significantly lower than the shampoo market, is impressive, as penetration is already high. In fact, this growth rate has been maintained with strong marketing aggression by leading players in the segment.


There are several consumers who use coconut oil in cooking (especially in the south), and conversely other edible oil classified as cooking medium (for e.g. castor oil) is used for hair care also.

Therefore, the actual size of the oil market should be larger than what is estimated on the basis of branded hair oils.

During the last few years, several product variants, such as non-sticky hair oil, value added hair oil, etc have become very popular.

These variants are growing at a much faster pace, compared to the pure coconut hair oil segment.

The market for these products is estimated at Rs4.25bn and has been growing at 20-25% pa.
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