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smartanalyst, inc. www.smartanalyst.com
Shampoo and Hair Care Market in Taiwan and
Malaysia Analysis KM Reference Number 3826 May
5, 2004
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TABLE OF CONTENTS

• Executive Summary
• Asia Pacific Market
• Overview of market in Malaysia
• Shampoo Brands and Strategies
• Values in Malaysia Market
• What Advertisements convey
• Overview of market in Taiwan
• Shampoo Brands and Strategies
• What Advertisements convey
• Market Dynamics
• Links and Sources
• Methodology

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Executive Summary

• Overview
• In 2001 (for which the latest statistics are
  available in the public domain), Malaysia and
  Taiwan accounted for 140 mn and 247 mn,
  respectively, of retail hair care market.
• Malaysia
• PG and Unilever are fighting it out for the top
  slot. Unilevers Sunsilk has recently overtaken
  Pantene. The third slot is held by PGs Rejoice.
  Along with Kao, these players account for nearly
  50 of the hair care market.
• Pantene has repositioned itself by stressing the
  end result (shining hair) in shampoo category
  rather than the earlier model of asking the
  customer to identify the type of hair and pick
  the right technologically correct choice of
  Pantene sub-brand. Dove conveys the message of
  smoothness with non-traditional advertising like
  having a long satin cloth hang down from the
  ceiling of a concourse into a Dove bottle.
  Sunsilk hangs cloth ads on pillars to convey the
  message of softness.
• Hair care market beyond shampoo hectic
  lifestyle, environmental pollution and regular
  consumption of junk food have led to hair loss
  and balding among the young. Hair-loss programs
  offered by salons and hair care centers offer to
  tackle hair loss and balding. To fill the gap,
  smaller companies provide easier and affordable
  programs using herbal extracts to treat hair loss
  and balding.
• Advertisements in Malaysia focus on shining,
  long, black, swaying hair in women. And
  traditional anti-dandruff line for men. Ad wars
  are fought mostly on TV. The top three shampoo
  market players are also the top three in TV ad
  spends. The TV ads also focus on non-hair
  attributes like confidence, modernity,
  togetherness.

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Executive Summary

• Taiwan
• Shampoos are one of most strongly contested
  markets in Taiwan. Kao holds a 22 volume share
  of the shampoo market compared with FUICs 2O.
  Kaos lead brand is their top seller in Japan,
  Pure shampoo. FUICs main weapon is Timotei,
  also brand leader in Japan. Unilever has been
  consistently making attempts to achieve
  leadership in Taiwan's dynamic shampoo market.
• Kao, the leader in shampoos, has re-formulated
  for Taiwanese hair, water, and washing habits.
  Kao also has hair care salons and an RD facility
  to help keep track of consumer needs, product
  performance and check competition. Kao became the
  first marketer to introduce a telephone hot-line
  for customers to call the company with questions
  or complaints. Timoteis ad campaign did not work
  in the beginning. It was based on images of
  blonde Scandinavian girl. Black-haired Taiwanese
  consumers found the blonde hair imagery too way
  out to relate to. Dove managed to transfer its
  brand value as a soap into its shampoo. Earlier,
  PGs Ivory tried the same but failed.
• Ads focus on long, black, shining hair. Non-hair
  attributes stressed are confidence and the
  ability to overcome fears of closeness due to
  hair problems.

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Asia Pacific Market Overview
Retail Value of Asia Pacific Hair Care Market in
2001

Country Value in mn
Malaysia 139.6
Taiwan 247.1

Marketshare of Brands in Hair Care
Brand Market Share
Pantene Pro- V 5.1
Lux 4.5
Bigen (Hoyu) 4.1
Vidal Sassoon 3.0
Rejoice 2.7
Merit 2.6
Levenus 2.4
Head Shoulders 2.2
Sunsilk 2.2
Others 71.4
Retail Value by Segments
Segment Value in mn
Shampoos 2186.1
2-in-1 products 1448.3
Conditioners 1917
Styling Agents Sprays 1248.5
Colorants 1464.2
Perms Relaxants 49.1
Source Euromonitor
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Market Overview Malaysia 1

• Shampoo Market
• A fragmented market. Nearly half of it held by
  three players PG, Unilever and Kao, who also
  account for the top three ad spends on TV.
• There are a host of brands struggling to maintain
  low, single-digit share.
• SunSilk overtook Pantene at the top in 2003,
  according to AC Nielsen. SunSilk had 18.7 of the
  market (12.2 in 2002), while Pantene held 18.3
  (21.4 in 2002). PG's Rejoice occupies the third
  slot.
• During Jan-Sep 2003, the shampoo brands spent
  RM47.4 mn in ad campaigns.
• About 86 of that adspend was in the beauty
  category, as opposed to baby shampoo, medicated
  shampoo and conditioners.
• Shampoo Conditioner segment is among the top 5
  products in terms of adspends on TV. In fact, the
  shampoo war is fought largely on TV.
• Both PG brands run exclusive campaigns.
  Unilever's SunSilk focuses on TV, but also
  spends around 23 on other media.

Player Adspend on TV in a year
PG 24.07 RM mn
Unilever 36.28 RM mn
Kao 27.36 RM mn
Top TV Ad Spends By
Players (source AC Nielsen)
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Market Overview Malaysia 2

• Major players offer a full range of shampoos to
  fit different consumers needs and different
  spending levels.
• Increasingly common conditions such as brittle
  hair, dropping hair and balding are driving up
  the demand for repair shampoos and two-in-one
  shampoos (shampoo plus conditioner).
• Beyond Shampoo
• Hectic lifestyle, environmental pollution and
  regular consumption of junk food have led to
  hair loss and balding among the young.
• Hair-loss programs offered by salons and hair
  care centers offer to tackle hair loss and
  balding. Hi Tech equipment are used by certain
  companies such as SVENSON. However, these
  programs are expensive and beyond the reach of
  most consumers.
• To fill the gap, smaller companies provide easier
  and affordable programs using herbal extracts to
  treat hair loss and balding.
• 2 out of 10 women color their hair. The "in"
  colours are the red shades.
• More of the younger generation of
  fashion-conscious men color their hair.
• Market Size
• One estimate puts the market size of the hair
  care market to be RM 450 mn. Of this, RM 390 mn
  is derived from retail sales and the rest from
  salons and other outlets.

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Major Shampoo Brands and Strategies

• PGs Pantene
• In Malaysia, as across Asia, Pantene is
  positioned as a premium, hair care mega-brand. A
  survey in Readers Digest chose Pantene as the
  Platinum Super Brand among shampoos and
  conditioners.
• Research showed that Pantene had lost unique
  benefits and was viewed as the most expensive
  shampoo on the shelf, with no perceived benefit
  to justify that cost. Pantene has revamped its
  strategy in line with the new strategy
  implemented in other markets.
• Previously, Pantene offered consumers benefits
  based on a particular hair type. For example,
  damaged hair would become non-damaged, healthier
  hair. With the "Reborn" campaign, Pantene
  promised consumers a transformation, the ability
  to achieve a particular look they have always
  wanted.
• Most consumers misdiagnose their hair type,choose
  the wrong shampoo which leads to dissatisfaction
  with results. Based on these findings, PG and
  Grey revamped the Pantene brand with new
  packaging, colors and 5 new names - Smooth
  Sleek, Sheer Volume, Hydrating Curls and Vibrant
  Colors - marketed by end hair looks, rather than
  by hair type.
• Classic Clean is a fall back, for consumers who
  used to buy the normal variant, but are not sure
  which "new look" product they want to buy.
• Pantene Pro-V's range of shampoos and
  conditioners are marketed as products that offer
  the best damage protection, making hair up to
  seven times healthier.

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Major Shampoo Brands and Strategies

• Pantene (continued)
• Campaigns
• Emphasis on Shine Consumers who purchase
  Pantene shampoo or conditioner would take part in
  a contest and have a chance of winning up to RM
  30,000 worth of diamond jewelry.
• Bald Mystery Women Teaser Female "protesters,"
  covered with masks which made them look bald,
  called for a change in high foot-traffic areas -
  a ploy which caught the attention of media and
  engineered significant word-of-mouth. When they
  reappeared on the streets, they were transformed
  into beautiful girls with flowing hair.
• Awareness of new Pantene reached as high
  as 81 in the first week of the launch and the
  new strategy grew Pantene's sales of shampoos and
  conditioners to retailers more than 20.
• Greys integrated media strategy
  "Reborn, aired on TVs in Malaysia, Thailand,
  Indonesia, the Philippines, India, Vietnam and
  Singapore was the largest initiative in the
  history of the Pantene brand.

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Major Shampoo Brands and Strategies

• Unilevers Sunsilk And Dove
• Unilevers wanted to convey the softness of its
  Sunsilk shampoo. It posted ads on the pillars,
  printed on soft cloth.
• Satin cloth was hanged from the high ceilings in
  lobbies and concourses which cascaded down
  escalators - shampoo-like, into a giant Dove
  shampoo bottle downstairs.
• MindShare Malaysia, the media agency for
  Unilever, came up with a novel TV campaign for
  Sunsilk In the middle of a popular TV program,
  the screen suddenly goes black like a telecast
  interruption-for a few seconds. Then slowly the
  black screen transforms into shimmering black
  shiny hair with the message in Malay 'Black hair
  that shines.
• Sunsilk is perceived as a local brand by
  consumers in Malaysia.
• PGs Rejoice
• Aims to build a brand that is fun, energetic,
  fuss-free and simple.
• It is a shampoo and conditioner. In addition,
  there is hot oil essence for hair care. The
  emphasis in advertisements is on the hair care
  aspect of the shampoo.
• Event Campaign PG held a Shampoothon,
  shampooing 1000 heads with Rejoice, at a shopping
  center in a single day. The event was filmed and
  telecast.

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Major Shampoo Brands and Strategies

• PGs Rejoice (continued)
• Blind Trial Rejoice commissioned 100 hair
  stylists in Malaysia to test Rejoice for two
  weeks but by hiding the identity. Rejoice was
  transferred to generic bottles and given to them.
  Rejoices end line the solution for bad hair is
  finally here.
• Results
• 83 gave the shampoo a rating of "like/like very
  much
• 72 voted Rejoice "much better/slightly better"
  than general shampoos on the market
• 79 agreed the hair was very soft after using the
  shampoo
• Sub-brand Rejoice Rich targets consumer who go
  for messy, time-consuming and expensive hair
  treatments by offering to eliminate these
  hassles.
• Follow-Me (Earth Chemical Co, Japan)
• Has been recently introduced in Malaysia.
• Advertising titled "no more messy flakes"
  emphasizes that the "Scalp Care" formula that
  contains vitamin B5 and UV protection, while text
  on the bottle highlights the "cool and
  refreshing" sensation that results from use.

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Common Promotions and Distribution Channels

• Promotional counters at major shopping centers
  and pharmaceutical outlets are used to attract
  shoppers.
• Cut-out coupons are first advertised in daily
  newspapers. Consumers can cut out the article in
  exchange of free samples at designated outlets
  during the promotion period.
• Sales persons distribute samples at
  crowd-catching areas.
• The products are usually very attractively packed
  with informative illustrations.
• Samples are distributed to individual households.
  This is done by dropping the water-resistant
  sachets into letter-boxes.
• Television advertisements in womens magazines.
  As Malaysia is a multi-racial country, the
  magazines are available in three major languages
  English, Malay and Chinese.

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Values Trends in Malaysian Hair Care Market

• Malaysia is principally a Muslim country and a
  certain wariness of western popular culture is
  present. This affects hair care market too.
• Among those who can afford to spend up to 400
  per hair treatment, Rebonding is increasingly
  popular. Demand for it is so great, salons like
  The Hair Shop have had to limit the number of
  customers for rebonding each day. (Rebonding
  keeps the hair straight even after shampoo).
• Hair stylists stress the importance of
  maintenance. They advocate a hair cut once every
  five weeks instead of every six months. Harsh
  climate and constant blow-drying are known to
  harm the hair.
• Images evoked in advertisements targeted at women
  are straighter hair, bouncier hair, long and
  shining hair, long and black hair.
• Curls are meaningless in Malaysia. No one has
  them or aspires for them. Volume of Hair is
  another concept that people dont usually relate
  to. For men, the traditional anti-dandruff and
  bouncier lines work in shampoos.
• Fancy names some salons are now called hair
  care solution centers. Staff assisting consumers
  in selecting hair care products in shops are
  called Beauty Advisors.
• Hair Color trend More and more women and men
  realize they can enhance, add texture and
  personalize their natural hair colour. In
  Malaysia, the percentage of users of hair
  colorants is very small. However, the potential
  to create a market with home-colorant product
  that is reliable, safe, affordable and
  easy-to-use is promising. Red shades are
  considered most suitable for Asian hair and their
  darker complexion. Conversely, the global trend
  is now moving towards hair colours like ashtone
  or silverblonde.

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What Advertisements convey - 1

• TV is the medium on which ad wars are fought.
  Typical TV ads on shampoos run for 30 seconds,
  sometimes 15 seconds. There is a story line and
  end line. Languages used are Malay, Chinese and
  English.
• For example, for Sunsilk, Black Shine hair
  wash range, the ad goes like this
• Title Lady with Long Black Hair 30 secs
• Story Line A woman uses a computer in a room.
  She looks at different clothing and she looks
  at her long hair on the mirror.
• End Line Shines naturally.
• Language Malay
• Among the non-hair aspects brought to fore are
• Modernity, Well-educated women, Working women
• Enhanced feeling of Togetherness thanks to the
  effect of shampoo (man and woman dancing and
  womans hair swaying in Pantene Pro-V ad)
• For men, enhanced ability of men to attract women
  (Two men one scratching his head another
  smiles, and a lady touches his hair Head
  Shoulders Anti-Dandruff Shampoo)
• Family (A lady talks about her hair. A child
  touches her hair. Dove)
• Confidence (A lady walks confidently amidst a
  group of young men. Rejoice)
• Smoothening Difficult relationships (A man
  introduces his girlfriend to his family. His mom
  touches her hair. Rejoice)

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What Advertisements convey - 2

• Among the hair aspects brought to fore are
• Black shining long hair
• Swaying hair
• As straight as a rebond
• Experiencing the REAL difference
• For softer, NATURALLY black hair
• REBORD hair with a HEALTHIER shine

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Market Overview Taiwan

• Shampoos are one of most strongly contested
  markets in Taiwan.
• Kao holds a 22 volume share of the shampoo
  market compared with FUICs 2O. Kaos lead
  brand is their top seller in Japan, Pure
  shampoo. FUICs main weapon is Timotei, also
  brand leader in Japan.
• Unilever has been consistently making attempts to
  achieve leadership in Taiwan's dynamic shampoo
  market.
• About 50 of Taiwanese households buy at least
  one shampoo.
• One estimate forecast a 7.4 growth in hair care
  market and volume to touch 452.8 mn in 2004.
• In 2000, Dove, marketing its moisturizing
  strength, claimed a 9.2 of the marketshare only
  after two months, and 12.7 after five months on
  shelves. The fact that Kao and Timotei are still
  the top two brands indicates that Doves growth
  has plateaued since then early days.

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Brands and Strategies

• Taiwanese women are highly selective
  about hair care choices. So brands think twice
  before applying a global or regional campaign in
  Taiwanese market.
• Kao
• Kaos approach to Taiwan shows a certain degree
  of sophistication. Shampoos and hair care
  products have been re-formulated for Taiwanese
  hair, water, and washing habits.
• Kao also has hair care salons and an RD facility
  to help keep track of consumer needs, product
  performance and check competition.
• Kao became the first marketer to introduce a
  telephone hot-line for customers to call the
  company with questions or complaints.
• Timotei
• Timoteis flip, flop, flip In Japan, Timoteis
  emotive Scandinavian advertising and positioning
  as a shampoo that offers superior mildness
  enabled it to overtake Kaos Pure, to become
  brand leader. In Taiwan, similar advertising,
  based on images of blonde Scandinavian girl ran
  into problems. Black-haired Taiwanese consumers
  found the blonde hair imagery too way out to
  relate to. Some feared if Timotei would turn
  their hair blonde.
• The campaign was changed to feature
  black hair. Perversely, consumers didnt notice
  the difference, so the blonde girl was
  re-introduced. Promotions and merchandising
  helped get the message across and now Timotei is
  challenging Kaos Pure for leadership.

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Brands and Strategies

• Dove
• Is positioning itself as a gentle, clean and
  gentle shampoo. Was introduced in Taiwan in 2000.
• OM, Taipei does the advertisements. The campaign
  is based on both local market needs and consumer
  insights, while adhering to the brand's global
  testimonial advertising format.
• Unilevers challenge was in converting a strong
  soap brand into a shampoo brand. While the
  functionality of cleansing was the only attribute
  emphasised in soap, in shampoo it was not enough.
  The attribute of making a woman feel good was
  focused.
• Taiwanese women were familiar with Dove as a
  moisturizing brand. Dove Bar was already deeply
  rooted among local consumers.
• Mild," "gentle" and "moisturizing" were values
  already associated with it by Taiwanese women.
  Unilever claims that it converted these to
  shampoo.
• Dove's success is credited to to three factors
• The right category and consumer insights for
  launch.
• Ability to build credibility in hair care and
  relevance with women.
• Leverage on the strength of Dove's communication
  format, testimonials.

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Brands and Strategies

• Pantene and others from PG
• Pantene communicates a soft and feminine feel in
  addition to the basic shampoo functional benefit
  delivery.
• Vidal Sasoon communicates expression of
  individuality, showing a much more confident and
  outgoing personality type than before.
• Head Shoulders communicates not only the key
  functional benefit (danddruff cleansing) but an
  added cosmetic advantage.
• Meanwhile PGs shampoo strategy has been to
  introduce premium priced brands such as Pert, (a
  2-in-1 shampoo). While these only account for 12
  of market volumes, they have made PG brand
  leader in value with a 25 share of the NT 2.5
  Billion (about 62 million) retail shampoo and
  conditioner market.
• Pantene was reformulated, a new advertising
  campaign was launched. The new ads focus on how
  it makes users' hair look, rather than on the
  technology of Pantene and how it makes hair in
  general look (which was the line earlier).
• The new television and print ads feature the tag
  line, "love your hair," and emphasize individual
  consumers. In the past, Pantene ads featured
  models.
• PGs Ivory was a brand that tried to convert its
  values of soap into shampoo and failed.
• Fructis targets a younger, unisex demographic.
  Fructis' positioning is more in strengthening
  hair than in conditioning it.

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What Advertisements convey - 1

• The advertisements are usually in Mandarin,
  English.
• A typical ad runs like this
• Media Television
• Product Pantene Pro-V, Black / Long Black Hair
  Wash Range
• Title Lady with Long Hair
• Story Line The lady with long hair talks and
  opens the room. The product appears and her hair
  becomes smooth.
• End Line Lets wash you more comfortably.
• Duration 30 seconds
• Language Mandarin
• Hair Attributes focused in advertisements
• Long smooth hair (An actress touched her long
  hair in a crowd).
• Softer, smoother and moisturized hair (A lady
  talks while her hair is focused).
• Shining hair  (Sunlight passes through a hair
  strand).
• Cooler way to get rid of dandruff (a lady vacuums
  a mans hair)

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What Advertisements convey - 2

• Non-Hair Attributes focused in advertisements
• Swimming is often a setting for the ads for hair
  care, indicating a large number of women and men
  who swim, among the target audience.
• Confidence (A woman with swaying hair walks
  through a crowd of men).
• Overcoming fear of togetherness (A woman leans on
  a mans shoulder. The line reads You dont have
  to hide when you are close.

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Market Dynamics in Taiwan

• Declining population growth has meant players
  have been forced to seek sales growth by adding
  new lines or offering product variations to
  existing lines.
• The Taiwanese consumer continues to be bombarded
  with information. So companies have reacted in an
  attempt to cut through the clutter. Communication
  has moved beyond simply "educational" advertising
  which solely communicates functional benefits, to
  a more subtle proposition incorporating appeals
  to deeper emotional factors driving consumers
  into the category and brand franchise.
• How to get one's message through the clutter
  requires increasing innovation, rather than the
  traditional heavy reliance on television
  advertising alone.
• The success of PG's SK II, which rose to become
  one of the top selling skin care products in
  department stores, bore testimony to the high
  purchasing power of female consumers aged 35 and
  above. Perhaps it points at potential
  opportunities for hair care players launching
  products for mature consumers.
• The outbreak of SARS in 2003 highlighted the
  growth of the direct sales channels such as
  internet sales and catalogue shopping as
  consumers turned to these channels to avoid
  public places. This applies to hair care products
  too. There is a spurt in direct to home
  marketing.

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Links and sources

• Information accessed through Nexis
• http//www.ice.it/estero2/kuala_lumpur/market.pdf
  
• www.ads.xtremeinformation.com
• http//www.grocersreview.co.nz/archives/jul03_3.ht
  m.
• http//adtimes.nstp.com.my/archive/2001/jun15.htm
• http//www2.gol.com/users/kilburn/taiwan.htm
•  

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Methodology

• The research was conducted out of information
  gleaned from websites of individual players,
  advertisement magazines, research organizations
  and others.
• Information regarding advertising strategies is
  scanty in the public domain.
• Proprietary sources such as Dialog and Nexis were
  also used to access information.
• Information on consumer segmentation too was rare
  to come by.
• Information on marketshare of shampoos in the two
  countries too was scanty on the public domain.