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Why the $15b luxury haircare market is booming

$260 shampoo, anyone? No longer confined to professional salons, high-end hair products have become a must-have to turn 'untameable' hair into shiny manes.

The pointy end of the luxury haircare market is booming. Getty

Natalie ReillyWriter

May 13, 2020 – 10.18am

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The Russian Amber Imperial Shampoo is one of those products that looks more like elixir than hair wash. Its sturdy gold pot, which holds 355ml of mostly natural ingredients, such as chamomile, rosemary and nettle, can be easily found on the luxury fashion website Net-a-Porter. A shampoo fit for a tsar, perhaps, given it retails for $256.

This particular pot of gold from luxury haircare brand Philip B is hardly an anomaly. Cult haircare brand Oribe, which launched in Australia in 2014 with an aim to mimic designer perfume in its fragrance and packaging design, has a "restore shampoo", a litre of which will set you back $265. The company, which was acquired by KAO manufacturers in 2017 for $620 million, is now so successful it has a skincare line, too.

Online shopping has made luxury haircare more accessible. Getty

French luxury skincare brand Sisley Paris, meanwhile, has done the opposite, jumping from skincare to a haircare range with the release of its Revitalising Fortifying Serum in 2018. It's now a bestseller, with one bought every five minutes somewhere around the world. That's a lot of serum, particularly when you consider a60ml bottle costs $260.

Australia's general manger for Sisley Paris, Irene Robinson, says the company thinks of luxury haircare as the next skincare. "We had already incorporated anti-ageing ingredients into our sun care, so we thought that after over 40 years of skincare expertise, we could care for the scalp and hair fibre – that's what led to the creation of the brand."

Designer label Balmain Paris is another with its own haircare range, including a "hair perfume" you can spray on your hair to enhance shine. According to Adore Beauty, purchases of the $56 bottle are up 133 per cent since last month. Swedish luxury brand Sachajuan launched its anti-pollution shampoo and conditioner three months ago and is already winning awards. Davines just released its first carbon-neutral product, called A Single Shampoo. It's being hailed by the green smoothie set as practically medicinal and retails for a healthy $45.

Pot of gold: Philip B Russian Amber Imperial Shampoo.

Many of these products, such as Oribe and Philip B, were once available only from professional salons. Now they account for a huge share of the market, the pointy end of which is booming. According to a report published by Allied Market Research, the global luxury cosmetics market's size (which includes hair products) was valued at $US55 billion ($85 billion) in 2019 and is projected to reach $US81 billion by 2026.

While haircare accounts for just 15 per cent of the luxury cosmetics market now (skincare holds the lion's share with about 40 per cent), that's still $US10 billion a year. It's a long way from supermarket haircare – so when did haircare become so high maintenance?

According to Allied Market Research, it was when e-commerce became popular. Online shopping made luxury haircare, like so many other high-end products, more accessible. The other factor? They work. Really well. In the past, people with curly, flyaway or coarse hair could find relief only in a salon. Thanks to advances in technology, these products can transform previously "untameable" hair into sleek, shiny manes – the type you usually see on shampoo commercials. Reviews on beauty websites rarely fall below four-and-a-half stars.

Then there is the surge in consumer demand for products labelled organic, which almost all of the luxury brands proudly carry. Not even the current climate can dint their glow. "Thankfully, the hair category has been largely unscathed by COVID-19, especially when compared with, say, fragrance or colour cosmetic markets, which have been smashed," says Oribe co-founder Jared Fisher, who launched the brand here. Particularly strong for the brand, he says, have been at-home hair treatments.

That's not to suggest that salons haven't been affected. The $4.3 billion industry, which employs more than 67,000 people in Australia, who are responsible for colouring the hair of more than 2.7 million women, has had to quickly pivot to virtual sessions and online consultations after 90 per cent of hairdressers closed under lockdown.

Olaplex's patented bonding formula was an immediate industry disrupter.

"The past few months have seen digital integration for salons become imperative," says David Higgins, general manager of L'Oréal Australia's professional products division. But, he adds, online shopping has always been where it's at.

"We know that social media is where consumers spend their time and that they are more educated and aware than ever. And they absolutely know what they want from their luxury hair care regime."

Higgins knows what he's doing. According to Adore Beauty, sales of L'Oreal's Kérastase Nutritive 8hr Magic Night Serum are up 131 per cent.

But it's not just online technology affecting the industry – advancements in chemical technology have also paved the way. Prestige brand Olaplex, for example, began like a tech start-up. Its patented bonding formula, which protects hair even while it is being chemically treated, was invented by two scientists in California in 2014.

It was an immediate industry disrupter. Within six months, the company had received 20,000 orders. The following year, L'Oreal tried to buy it out, but Olaplex refused to sell (eventually, though, private equity firm Advent took a stake in the brand for a rumoured $US1 billion). Sephora proudly calls it one of its top-five performing luxury haircare brands.

Actress Emma Stone's hair stylist, Tracey Cunningham, told Forbes that the product "filled a hole that every hair colourist/stylist/every person needs".

Make that every celebrity. The wall between the aspirational lifestyle of an Oscar winner and an ordinary consumer is crumbling, thanks to Instagram. It appears that now we know which products celebrities use, we're willing to snap them up, even when they come with a celebrity price tag.

"The combination of a visual medium like Instagram and an accomplished artist can have a significant impact on consumer behaviour," says luxury beauty consultant Neil Petrocelli, who adds that hair done right should provoke the consumer to stop scrolling and click to find out about the products immediately. Luxury haircare brands are confident those few clicks mean the difference between a good hair day and a bad one – and a great big gold pot of money.