The country's hair oil market, once largely dependent on local companies, is growing at a rapid pace, but is also being dominated by foreign brands.
In 2019, the domestic hair oil market's size stood at $ 41.3 million. The market is expected to grow at a compound annual growth rate (CAGR) of 5.5% to $54 million throughout the next six years until 2025, according to market insiders’ data.
They expect that due to the high urbanization rate, increase in per capita income and affinity to branded products, the market of branded oil will experience more growth in the coming years.
The market is dominated by foreign brands, leaving less room for the domestic players as the latter fails to gain market share due to lack of technological support, weak distribution network, and access to affordable financing, industry stakeholders said.
Foreign brands, such as Marico, Dabur, and Emami dominate the market.
Multinational company Marico Bangladesh’s flagship brand Parachute is a market leader in the country with 80% market share in the hair oil industry.
The company is also a dominant player in value added hair oils (VAHO) space with brands such as Parachute Advanced, Parachute Advanced Beli Phool, Parachute Advanced Extra Care, Parachute Advanced Aloe Vera, Nihar Naturals, Shanti Badam Amla, and Nihar Naturals Joba Amla.
Coconut oil accounts for the highest share at 46% in the market, followed by light hair oil 16%, amla based oil 15%, cooling oils 11% and other oils 12%.
Copra, or dried coconut meat, is the key raw material used to produce coconut oil. India, followed by Indonesia, Sri Lanka, and the Philippines are the prime locations from which copra is imported.
When copra price increases in the international market, profit margins shrink as it becomes more expensive to manufacture coconut oil.
Local hair oil companies lack research and development facilities to produce good quality oil products. Besides, weak distribution network and lack of low-cost capital funding also hinders the prospects for local hair oil companies, lamented the owners and industrialists involved in the hair oil business.
They also said foreign brands offer a wide range of products, as well as a well-established presence in the country's hair oil market, and high distribution network enable the key players to hold a significant market share.
Talking to Dhaka Tribune, Managing Director of Mousumi Industries Limited (Cute Brand) Kazi Moin Uddin Ahmed said that many consumers also think the quality of foreign hair oil is better than that of local oil, which is not always true as both local and foreign firms produce the hair oil from the same raw materials.
“Our hair oil is a trusted name in homes across Bangladesh. Our unparalleled dedication towards quality has made our products recognizable instantly in the Bangladeshi market,” he commented.
Some local brands such as the Cute brand of Mousumi Industries and Gondhoraj brand hair oil of Lalbagh Chemical Company have been dedicated to provide the best hair care solutions keeping the special needs of Bangladeshi consumers in mind. At one time consumers relied on the products of these companies.
Meanwhile, Jui Hair Care Oil is the ultimate solution for dry, damaged and frizzy hair, the brand of Square Toiletries growing as a trusted brand in the local market.
People in local and multinational companies in the sector said that the ongoing Covid-19 did not pose any threat to diminishing their business prospects despite the havoc it caused globally.
