Frost & Sullivan officially releases the 'White Paper on the Current Situation and Development Trends of China's Shampoo Industry 2024': Domestic Brands Break Through with Innovation and Differentiation

The 'White Paper on the Current Situation and Development Trends of China's Shampoo Industry' starts with a study of the overall cosmetics industry in China, introducing the classification of cosmetics, the industrial chain, and market size. It also conducts a study on the market size of China's skincare industry, which is a related sector to cosmetics. Subsequently, it investigates the shampoo industry, a segmented sector within the cosmetics category, systematically elaborating on the market size, competitive landscape, and development trends of China's domestic shampoo industry. It showcases the main challenges faced by domestic shampoo brands at present and the competitive advantages of leading enterprises.

According to the 'Regulations on the Administration of Cosmetic Labels' published by the General Administration of Quality Supervision, Inspection and Quarantine of China, cosmetics refer to chemical industrial products or fine chemical products that are dispersed on any part of the human body surface through application, spraying, or other similar methods, such as skin, hair, fingernails, toenails, lips, teeth, etc., with the purpose of cleaning, maintaining, beautifying, modifying, changing appearance, or correcting body odor while keeping the person in good condition. Based on their functionality, cosmetics are divided into the following categories:

• Skin care products: Refers to products that can improve skin integrity, alleviate skin conditions, and solve specific skin problems (such as acne, dark spots, etc.).

• Skin care: Refers to products that can clean and repair the skin, body, hair, etc., mainly including shower products, hair care products, oral care products, etc.

• Cosmetics: refer to products that can enhance or change the appearance of the face or body, mainly including eyeliner pencils, lipsticks, foundations, etc.

•Others: Refer to other products, including maternity and infant care, men's care, perfumes, deodorants, and other related products.

• Domestic products filled market gaps (1978-2001): With the rapid development of the national economy, the variety of goods further enriched, and domestic cosmetics companies rose to prominence. In an environment where per capita disposable income continued to increase, the urbanization process accelerated.

• International Brands Entering the Chinese Market (2001-2008): The scale of China's cosmetics industry continued to expand, with domestic and international brands entering the market one after another, intensifying competition further. Sales channels increased, and online sales became one of the important channels in the industry.

•International Brands Dominating the Chinese Market (2008-2018): China's economic growth rate showed an 'L' shape, and the subprime mortgage crisis hit. The rise of e-commerce brought new opportunities to the cosmetics industry.

• Rapid development of domestic brands (2018-present): The e-commerce and live streaming industries have flourished, with domestic brands achieving significant sales growth through new retail strategies and a variety of products.

The industrial chain of the Chinese cosmetics industry covers multiple links, from upstream raw material suppliers, to midstream manufacturers and brand owners, to downstream sales channels.

The cosmetics industry has been dominated by international brands for many years. In recent years, thanks to the domestic cosmetics brands' profound insight into the dynamic changes in Chinese consumer behavior and consumption patterns, their cost-effective positioning, and the promotion of multi-channel internet marketing, domestic cosmetics brands have shown strong development momentum.

From 2018 to 2021, due to the increase in consumer spending, the Chinese cosmetics market showed rapid growth. However, in 2022, the cosmetics market was hit by the pandemic. In 2023, market size eased to 953.7 billion yuan, mainly due to the strong performance of domestic brands in the market. It is expected that by 2028, the market size will reach 1.4025 trillion yuan, with an annual compound growth rate of 8% from 2023 to 2028.

Shampoo is a type of hair care product within skincare products, also known as shampoo essence or shower gel. It is formulated with surfactants as the main active ingredient, aiming to remove dirt, oil, etc., from hair and scalp, keeping the hair clean and healthy. Based on functionality, it can be classified as:

• Cleansing and Deodorizing Shampoos: Mainly aimed at addressing scalp dandruff and itching. Their core ingredients are usually antifungal and antibacterial agents, which can effectively inhibit Malassezia fungi that cause dandruff. Combined with cleansing ingredients, they remove dead skin cells and excess oil, achieving a refreshing, dandruff-reducing, and itch-relieving effect.

• Oil-Controling, Puff-Flavored Shampoos: Designed specifically for oily scalps. They aim to regulate sebum secretion and prolong the hair's fresh state. These products usually contain ingredients that absorb oil and mild cleansing surfactants, which can deeply clean the hair follicles, remove excess oil without over-stimulating the scalp.

• Repair and nourishing shampoos: These are mainly designed for dry, frizzy, split, damaged (especially from perming or dyeing) hair. Their formulas are rich in nourishing and moisturizing ingredients that form a protective film on the hair surface, effectively filling the gaps between hair scales, reducing water loss, and restoring the smoothness, luster, and combability of the hair.

• Strong and anti-falling-out shampoo: Focused on improving hair loss and breakage issues, it aims to strengthen hair roots and reduce hair loss. Such products often contain ingredients that promote scalp blood circulation and nourish hair follicles. By providing nutrients to the hair follicles, they extend the hair growth cycle, thereby enhancing the toughness and firmness of the hair strands and fundamentally improving hair loss conditions.

•Other shampoos: including soothing and anti-allergy shampoos, color-locking shampoos, and deep cleansing shampoos.

• Germination Period (1970-1980): During this phase, the shampoo industry was not yet mature, focusing mainly on basic cleaning functions. Residents mostly used soap and shampoos to clean their scalp and hair, with a single type of product available. This category had not yet become a mass consumer product.

• Rapid Development Period (1981-2000): In the 1980s, consumers began to develop a sense of hair care, and shampoo and conditioner products entered the market. In the 1990s, foreign brands entered China and built large-scale factories to accelerate industrial production. Strong communication methods such as TV advertisements and celebrity endorsements rapidly promoted the popularization of hair care concepts.

• Integration and Development Phase (2001-2019): Brands continuously carried out consumer education on hair maintenance, and new hair care products such as hair oils and masks began to become popular. At the same time, e-commerce channels developed rapidly, with a significant increase in online sales of shampoos. Consumers shifted from focusing on basic efficacy to function-driven consumption, and brands targeted specific demographics for precise marketing.

• High-quality development period (2020-present): Consumers are no longer satisfied with single efficacy but are seeking professional care and personalized experiences, placing higher demands on product ingredient safety, fragrance experience, and hair care logic. The new concept centered on 'scalp health' has rapidly become popular, driving shampoo products towards refinement and high quality.

The Chinese shampoo industry has long been dominated by international brands. International giants have penetrated the market deeply through their strong brand effect, mature supply chain, and rich product lines. In recent years, with the rise of national trend culture, domestic brands have emerged and developed rapidly in the shampoo market. Domestic brands are gradually occupying market share through continuous innovation and differentiated competition. Offline channels remain one of the important sales channels for shampoos, and brands are continuously strengthening the layout and management of offline channels to improve offline sales efficiency and service quality. Seizing the opportunities of rapid development in e-commerce and social media, brands are continuously broadening their sales channels through online channels. In terms of sales volume, the market scale of China's domestic shampoo industry was 630 million bottles in 2024, with a compound growth rate of 3.1% from 2019 to 2024. As consumers pay more attention to hair health care, the Chinese domestic shampoo industry continues to develop.

Consumers' demand is trending towards diversification and personalization, driving the segmentation of the shampoo market. Shampoo products tailored to different hair types, scalp conditions, and specific needs are emerging continuously, expanding the market size. It is estimated that by 2029, the sales volume of domestic Chinese shampoo will grow at a compound annual rate of 6.6% to reach 870 million bottles.

Shuree was born in 1996 and has been focusing on the plant-based care segment since its inception. The brand was the first to combine natural plant ingredients with modern technology, and its wheat protein care series has led the industry in innovation. In recent years, Shuree has continuously upgraded its products, developing silicone-free formulas, amino acid care formulas, and scalp-specific care formulas to meet consumers' needs for healthy washing and grooming. By collaborating with professional research institutions, the brand has continuously increased the technological content of its products and consolidated its professional position in the field of domestic hair washing products. Currently, Shuree leads in sales volume in the domestic hair washing product industry.

In terms of product matrix layout, Shuree focuses on 'Plant-based Care' as the core, covering the product line from daily maintenance (basic cleansing, softening) to efficacy care (deep repair, dandruff removal, oil control), and from men's exclusive to youth-specific research series, catering to all scenarios of demand. Shuree's refined product matrix is based on combinations of different plant ingredients and specific effects, targeting consumers with different niche needs.

After decades of operation, Shulei's offline distribution network has penetrated into markets at all levels across the country, especially in third- and fourth-tier cities as well as small towns and townships, where it has established a strong offline traffic barrier. While stabilizing its offline foundation, Shulei has also fully entered mainstream e-commerce platforms, reaching young consumers through online marketing and achieving full coverage of both traditional offline markets and emerging online markets.

Shulei R&D Laboratory SLEK LAB possesses international-level scientific research capabilities. After more than 20 years of R&D accumulation, Shulei R&D Laboratory has reached in-depth cooperation with over 100 leading raw material suppliers globally and more than 20 scientific R&D teams, establishing more than 400 stringent monitoring standards.

Adolf was established in 2013. Unlike traditional shampoos that emphasize functionality (anti-dandruff, oil control), Adolf elevates the brand dimension to emotional and olfactory experiences. It innovatively applies perfume technology to skincare products, developing a multi-layered fragrance series that transforms shampooing into an "sensory SPA." In terms of product research and development, Adolf has established a comprehensive R&D system and has established strategic partnerships with top international fragrance companies to ensure the stability and sophistication of fragrance quality, building core technical barriers and forming differentiated competitive advantages over other brands. In terms of channel development, the brand adopts an online-offline integrated model. It not only deeply cultivates high-end offline channels but also actively positions itself on e-commerce platforms to achieve full-channel coverage. In the early stages, the brand focused on specialized beauty stores and high-end salons, which highly align with its positioning as a high-end fragrance. After establishing brand momentum, it began to enter premium display areas in high-end boutique supermarkets and large shopping malls to ensure offline visibility. Online, the brand focuses on reinvigorating social platforms for "grooming," emphasizing its high-end and exquisite brand image through KOL reviews, fragrance experiences, and other sharing methods, guiding consumers to make purchases.

Fenghua was established in 1985. As a national classic skincare brand with over thirty years of history, it has always adhered to the concept of "providing the public with high-quality and cost-effective products." It has deeply understood the hair care needs of Chinese consumers, forming a profound brand heritage and widespread user trust. In terms of products, Fenghua focuses on balancing basic research and development with practical efficacy, insisting on using mild formulas and effective ingredients that have been proven in the market. It specializes in basic care products such as hair conditioners and shampoos, winning market reputation with its solid functionality and extremely high cost-effectiveness. In terms of channel strategy, Fenghua has long been deeply involved in traditional distribution channels such as offline shopping malls and convenience stores, establishing a wide and stable offline distribution network that reaches markets at all levels. In recent years, it has also actively laid out on e-commerce platforms, expanding its coverage through online channels such as Tmall, JD.com, and Douyin to meet the purchasing habits of the younger consumer group.

The industry is currently showing a clear trend towards product diversification and personalization. Brands are continuously conducting refined research across different dimensions, including consumers' hair texture, scalp type, efficacy needs, and fragrance preferences. They have launched a variety of functional combinations such as exfoliation, oil control, anti-dandruff, and repair, along with different fragrance experiences, to meet the personalized care needs of different groups of people. At the same time, health concepts such as natural ingredients and silicone-free oils are emerging, and digital technology is being used for hair texture testing to promote personalized customized formula services, transforming shampoos from basic cleaning products into high-value personal care solutions. The gradual rise of multi-functional composite products has evolved shampoos from a single cleaning category into systematic scalp health solutions, driving the industry into a new stage driven by value.

Driven by the concept of green consumption and the 'dual carbon' policy, the shampoo industry is accelerating its transformation towards sustainability. Brands are introducing natural ingredients, silicone-free oils, and biodegradable raw materials into their formulas, emphasizing low irritation and environmental friendliness. They also adopt concentrated products and green manufacturing processes to reduce carbon footprints and resource waste. Green has been upgraded from a product highlight to a core competitive advantage for businesses, becoming an important path to win consumer recognition and shape brand value. More and more brands are using recyclable packaging and renewable plastics, and indicating green product certification logos on their bottles. They are gradually incorporating ESG performance into their brand strategy and regularly releasing annual sustainability reports.

With the continuous enrichment of consumption scenarios and user touchpoints, the channel layout in the shampoo industry is accelerating its development towards an online-offline integration from traditional shopping malls and daily chemical specialty stores. Content marketing channels such as live e-commerce and short videos are emerging continuously. Enterprises use blogger recommendations, efficacy tests, user feedback, and other forms to create content-based word-of-mouth campaigns, promoting consumer brand awareness and driving sales growth. At the same time, offline channels are extending to exclusive counters and boutique supermarkets, emphasizing terminal experience and meeting immediate needs. The linkage between offline experience and online data constructs a full-channel closed loop, enabling enterprises to adapt to new consumption trends and continuously get closer to the life scenarios and decision-making paths of target consumers.