Article source: Kaiboluo Caijing (ID: kaiboluocaijing)

"If I had 1,000 yuan to spend on skincare and hair care products, I would spend 900 yuan on my hair."

Xiaojing often complains to her friends about her hair troubles: oily scalp, fine and limp hair, constant hair loss, and maintaining natural curls—it's too difficult. After struggling for a long time, she has become a dedicated "ingredient enthusiast" when it comes to saving her hair.

For a while, her strongest demand was oil control, so she bought shampoos containing sulfate surfactants, alternating with amino acid surfactants and salicylic acid shampoos. To maintain her curls, these products had to be silicone-free. To protect her hairline, she also bought a scalp scrub and scalp treatment essence, "which must contain Aminexil, a molecule specifically for preventing hair loss."

Xiaojing's father scoffs at this, thinking that the Bawang brand he has used for decades is just fine—"old brand, reliable."

Xiaojing's mother dislikes that her hair washing takes at least half an hour: "Layer after layer, like applying skincare products. Isn't it tiring?" Xiaojing responds, "For over 20 years, my mom still prefers Rejoice and Pantene—big bottles, cheap, and effective. I knew from childhood they weren't suitable for me; anything with silicone is absolutely out."

The different shampoo consumption habits of the three family members have filled an entire shelf with bottles and jars. This shelf also offers a glimpse into the history of shampoo changes in China.

In 1988, Procter & Gamble (P&G) established a joint venture in Guangzhou, bringing shampoo formulas that had been proven successful in Western markets to China, launching its first shampoo brand, Head & Shoulders, followed by Rejoice and Pantene, which once dominated half of China's shampoo market. Their competitors were Unilever's Lux, Hazeline, and Clear.

However, these Western shampoo formulas were more suitable for Europeans and Americans, whose hair cross-sections are oval, yellower, and more prone to curling. They clearly could not fully meet the needs of Chinese consumers, whose hair cross-sections are round, blacker, and straighter.

Seizing this opportunity, during the 30 years when P&G and Unilever divided the Chinese hair care market, we saw old domestic brands like Bee & Flower, Oni, Slek, Lafang, and Houdy emerge one after another, trying to attract consumers with concepts like plant-based ingredients and anti-hair loss effects. However, due to outdated branding and selling points that never hit the core pain points of users, their emotional appeal gradually faded.

Over time, shampoo became one of the hardest things to buy for many people—constantly switching, constantly making mistakes, in a vicious cycle.

Finally, years later, with the arrival of the new consumption era, a batch of emerging domestic brands rose, returning to the origin of hair care: how to make a shampoo suitable for Chinese consumers.

Young people who have been troubled by shampoo choices can now look forward to escaping their choice paralysis.

P&G vs. Unilever: Even "Foreign Monks" Find It Hard to Chant Scriptures

The history of China's shampoo market over the past 30 years can basically be summarized as a "palace intrigue" between two international FMCG giants: P&G and Unilever.

As early as the mid-1980s, China's first local professional hair care brand, Bee & Flower, was born. The yellow transparent bottle of "Bee & Flower" shampoo is a childhood memory for many born in the 1980s and 1990s. However, despite seizing the first-mover advantage, Bee & Flower failed to quickly enter ordinary households.

In the 1990s, it was P&G's three major brands—Head & Shoulders, Rejoice, and Pantene—that truly dominated China's shampoo market. Compared with local brands like Bee & Flower, international giants clearly knew better how to do marketing.

Head & Shoulders focused on anti-dandruff. On TV, young men and women often found themselves in awkward situations at work or in life due to falling dandruff, and all they needed was a bottle of Head & Shoulders to solve the problem. Later, Head & Shoulders also invited the then heartthrob Tony Leung to endorse the brand.

(Advertisement of Tony Leung endorsing Head & Shoulders)

Rejoice, as the name suggests, makes hair "silky and smooth." Back then, Rejoice launched a classic ad featuring flight attendants, representing fashion and modernity, whose flowing long hair easily won the hearts of countless young women—this was probably the "seeding" of that era. Additionally, it was the first brand to introduce the concept of "2-in-1 shampoo and conditioner."

Pantene's ads also liked to have female celebrities walk toward the audience with shiny hair. Compared with Rejoice, it emphasized health and shine, with the slogan "contains Pro-Vitamin B5," representing the earliest ingredient-consciousness in the hair care world.

Looking back now, these ads are still classic, and the product selling points were sufficiently gimmicky. In that era, these "big-name" shampoos were not just consumer goods but synonymous with fashion. By 1993, P&G had captured more than half of China's shampoo market.

Seeing its old rival about to win big, Unilever did not sit idly by.

In the mid-to-late 1990s, Unilever's Lux and Hazeline made their debut. Compared with Lux, Hazeline, which used the plant ingredient "black sesame" as a gimmick and focused on healthy, shiny black hair, was more like Unilever's killer move against P&G.

Hazeline's selling point of "jet black" actually imitated the local brand Oni, which burst onto the scene in 1996. Oni's most famous shampoo was "Shouwu," endorsed by Andy Lau. However, after once reaching a market share of 12.5%, second only to Rejoice, Oni shifted its focus to promoting soap nut products and later to perfume shampoos, eventually fading away due to confused positioning.

(Hazeline shampoo advertisement)

To counter Unilever, P&G acquired Herbal Essences, which focused on plant-based concepts, and launched Rejoice and VS Sassoon. Rejoice was once considered P&G's trump card because it was the first international brand to claim to be "designed specifically for Orientals," and its focus on traditional Chinese herbal ingredients was also a traditional Chinese symbol. However, Rejoice's selling point of "making hair blacker and more beautiful" was still too singular for Chinese consumers.

On another front, to counter Head & Shoulders, Unilever launched Clear, which also focused on anti-dandruff. Starting in 2007, Clear adopted a series of aggressive marketing strategies, including signing Cristiano Ronaldo, sponsoring F1 teams and the Chinese Super League team Guangzhou Evergrande, and focusing on the sports market, successfully wresting the male market share from P&G.

(Cristiano Ronaldo endorsing Clear advertisement)

In this history of P&G and Unilever's rivalry, a hidden problem was that brands were always "educating" consumers, rather than having products driven by demand. When consumption upgrades and users increasingly understand their own needs and pain points, the original product logic begins to fail.

In fact, by around 2018, both giants were facing bottlenecks of declining sales and sluggish growth.

Tang Liang, former P&G marketing director and founder of the hair care brand Zhixi, once analyzed the failures of Herbal Essences and Rejoice's Perich in his article "The Mistakes I Made at P&G That Cost Billions of Yuan."

In Tang's view, one reason for Herbal Essences' decline was that, to cater to the new generation's aesthetics, it completely changed the formula, fragrance, liquid, and bottle design, making it unrecognizable to users. This lesson taught him that trying to change consumers' long-standing habits is very difficult. Additionally, he subtly expressed that Herbal Essences' upgrade at that time was not "innovation" based on consumer needs.

As for Rejoice's Perich, it was launched to compete for market share with Germany's Schwarzkopf and Japan's Syoss. However, it turned out that Perich's high-end, professional positioning clashed with Rejoice's mass-market image, failing to capture consumer mindshare.

This may partly explain the difficulties these two FMCG giants' hair care brands faced in transformation. Ultimately, P&G and Unilever still do not understand Chinese consumers well enough.

In this regard, Gao Jianfeng, founding partner of Shanghai Bogao Consulting, analyzed to Kaiboluo Caijing that consumption upgrades have led to market diversification and segmentation, but traditional leading brands, after reaching a certain scale, often fail to cater to or incorrectly cater to new-generation consumers due to heavy baggage, ultimately leading to slowing growth or decline. On the other hand, the rise of e-commerce channels has given domestic emerging brands and foreign niche brands an opportunity.

Old Domestic Brands Renovate, But Is It "Desperate Remedies"?

Of course, during the 30 years of P&G and Unilever's battle, local brands, though weak, did have their moments.

Following Bee & Flower in the 1980s, Oni and Slek in the 1990s, in 2000, domestic hair care brands born in Guangdong, such as Lafang, Houdy, and Dihua Zhixiu, propped up the local shampoo market.

That year, Houdy and Lafang targeted more affordable second- and third-tier markets, attempting a "rural surrounding the city" route. Entering the new century, local brands' marketing capabilities also improved. Back then, Lafang's slogan "Love life, love Lafang" and Houdy's spokesperson Coco Lee's "Everyone is good only when everyone is good" became popular across the country through TV screens.

(Coco Lee endorsing Houdy advertisement)

However, more than a decade later, when shampoo also began to undergo consumption upgrades, the situation for Slek, Houdy, and Lafang may be even more difficult than for Head & Shoulders and Rejoice.

Local brands seem to believe they understand Chinese consumers' demands better, and their product upgrades closely follow consumption trends, basically "whatever users want, we do." This, to some extent, went to the opposite extreme of Rejoice and Head & Shoulders—catering to the market, abandoning education, and lacking focused exploration of shampoo formulas suitable for Chinese hair and scalp.

For a while, almost all brands began to emphasize that they were "silicone-free" shampoos that could make hair smoother, and some brands introduced popular skincare ingredients into shampoos.

For example, after Slek was acquired by Germany's Beiersdorf and then returned to the domestic camp, it quickly launched the Bokali Xiang amino acid hair care series, focusing on gentle cleansing, with "soap-free formula, safe for sensitive skin." Lafang, the former "king of affordability," also used the gimmick of "hyaluronic acid," claiming it was "like injecting a water glow needle into your hair."

When young people began to emphasize "wellness," pure natural, herbal, and plant-based ingredients also became labels that old domestic brands scrambled to claim. Among them, the most favored by brands was ginger, which is believed to strengthen hair roots and promote hair growth.

In the past two years, old domestic brands like Ziyuan, Lafang, Piaoying, and Dicai have launched multiple ginger shampoos. Regardless of their effectiveness, the prices are not cheap. For example, a three-bottle set of a certain brand's ginger anti-hair loss shampoo sells for 259 yuan on e-commerce platforms, even more expensive than Bawang, which once dominated the anti-hair loss segment. However, judging from sales, not many people are willing to pay.

(High-end series shampoos launched by old domestic brands)

Speaking of Bawang, that's another story that evokes sighs.

In 2005, with Jackie Chan's "duang," Bawang shampoo ads made a grand debut, presciently seizing the "anti-hair loss" segment that the two international giants had not yet targeted.

Unfortunately, just one year after going public, Bawang was rumored to contain carcinogens, which was later refuted by the drug administration's quality inspection. However, this negative publicity still caused Bawang's net profit to plummet by 132% in one year.

Even without this incident, Bawang's anti-hair loss shampoo might struggle to continue its legend in the new consumption era. This is because hair loss is actually influenced by multiple factors such as genetics, staying up late, and anxiety, meaning Bawang's effectiveness varies from person to person. As more and more ineffective cases emerged, Bawang also fell into controversy over being a "IQ tax."

(Bawang anti-hair loss shampoo classic packaging)

Moreover, judging from consumer complaints online, Bawang's "rustic aesthetic" of printing the founder's head, who has lost most of his hair, on dark green packaging for decades does not align with today's young people's consumption logic.

In recent years, Bawang has started to move closer to young people, for example, by adding amino acids to products, upgrading packaging to a simple and high-end dark green, and even launching pink packaging for female anti-hair loss shampoo. But by then, the blue ocean of anti-hair loss hair care had long been targeted by brands of all sizes, both domestic and foreign.

The innovation and upgrade of these old domestic brands are somewhat awkward, like "desperate remedies." According to the "2021 Sensitive Scalp Health White Paper" released by CBNData, dandruff, oily scalp, and fine hair are the three most common scalp concerns among consumers. Despite their efforts, it must be admitted that whether in product efficacy or packaging marketing, old domestic brands always seem to lag behind consumer needs.

Gao Jianfeng believes that seizing the segmented needs of new-generation consumers in the hair care market to create products is an opportunity for old brands that have long been suppressed by P&G and Unilever to overtake on curves. However, the current poor sales are also because their scale is still far from traditional leading brands, and their online marketing and e-commerce strategies are not as aggressive as those of newer consumer brands, inevitably leading to a cold market.

Who Can Make a Shampoo Suitable for Chinese People?

In the past two years, with the advent of the new consumption era, as the internet saying goes: all brands are worth redoing.

The track is almost changing rapidly. Five or six years ago, Ziyuan, which pioneered silicone-free shampoos in China, and Adolph, known for its essential oil fragrance, were emerging local brands and leaders among e-commerce players. Compared with foreign brands and traditional domestic products, they sensed the consumption preferences of the younger generation earlier. Their products not only featured new concepts but also had to be "high-value in appearance," winning over consumers at first impression.

However, this generation's aesthetic changes faster than brands imagine. With the wave of new consumption, their consumers have found new favorites. In this year's upcoming Double 11 promotion, appearing in super anchor live streams are newer brands like Spes, KIMTURE, and Rocking Zoo.

Born in the new consumption era, they appear with a typical online strategy: top anchor live streaming + KOL seeding + celebrity promotion. Take Spes's hot-selling sea salt scalp scrub as an example; this product once sold 110,000 bottles in one night in Li Jiaqi's live stream, with sales increasing.

Actually, just looking at the product's appearance and texture, it's not hard to understand why consumers are attracted: it looks like a jar of smoothie or a box of macaron ice cream, and the sea salt makes you feel like you're by the ocean. The new brand's visual presentation wins.

(Spes sea salt scalp scrub)

Consumers may make impulse purchases because of "good looks," but for new consumer brands, the real challenge is how to get consumers to repurchase continuously. "Consumers vote with their feet." Clearly, marketing alone is not enough; products must speak for themselves.

Regarding how to make products, new brands can actually "learn from history." When Rejoice and Pantene were still making smoothing shampoos, Ziyuan made waves with silicone-free; when Clear and Head & Shoulders were focused on anti-dandruff, Adolph began studying fragrance, and Zhiguan introduced the amino acid hair care concept.

From past brand changes, although brands have made some innovative efforts for Oriental hair, they mostly focused on a new ingredient concept or a single efficacy. However, current consumer needs are multifaceted, such as wanting both cleansing and anti-hair loss, as well as oil control and volume.

For new consumer brands to avoid the old path and create convincing products that address user pain points, they must invest in R&D. This is much harder than marketing, channel building, or supply chain, but once a breakthrough is achieved, the results are immediate.

With the improvement of internet infrastructure and the empowerment of Made in China, new consumer brands now have the ability to gain faster insights into consumer pain points. For example, Spes, which has recently gained high attention, was founded by a former head of NetEase Yanxuan and one of the promoters of the new consumption wave, who knows better how to identify user needs and research solutions around user pain points.

According to media reports, to research hair care products suitable for Chinese consumers' scalps and hair, Spes's product R&D team, based on data insights into user pain points, once went directly to a well-known top-tier hospital and followed a hair follicle research expert for three months of outpatient consultations, using over a thousand user scalp problem cases to substantiate the scalp troubles faced by Chinese people, and then developed "prescribed" products.

After that, Spes replaced the anti-hair loss ingredients, which some traditional brands liked to use like amino acids, with Aminexil, which has similar anti-hair loss efficacy to the drug Minoxidil, not only ensuring efficacy but also winning the favor of ingredient enthusiasts.

Judging from Spes's subsequent product influence, this is indeed a viable path. According to the "2021 National Scalp Health White Paper" released by CBNData, four of the top 10 online scalp hair care brands in 2021 are from China, with Spes and KONO ranking second and third, only behind Kérastase. Last year, only Bawang was a Chinese brand in the top 10.

In Gao Jianfeng's view, the future hair care market will continue the current pattern of category segmentation, and like other tracks, more new brands will emerge.

However, because brands are new, small in scale, and have limited funds, and the entry barrier is relatively low, the industry will inevitably face some problems. For example, with the development of more segmented categories, some brands with weak R&D innovation capabilities and severe product homogenization may face elimination.

In terms of identifying user pain points, new consumer brands in the hair care market have reached a consensus: what kind of shampoo can help users solve their problems cannot rely solely on marketing; deep technological refinement may be the way to produce domestic products that can compete with European and American giants.

*At the request of the interviewee, Xiaojing is a pseudonym.

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