Henkel Consumer Brands Asia R&D Center opens in Shanghai

With an investment of approximately 100 million yuan ($13.9 million), Germany's Henkel opened the Henkel Consumer Brands Asia R&D Center, the largest R&D facility for the company's consumer brands in the region, in Shanghai on Jan 16.

The R&D center is aimed to attract top scientific talent and strengthen the company's local research and development capabilities in the business categories of Hair, Laundry and Home Care.

Based on consumer habits and insights across 11 markets in Asia, the center is also aimed to facilitate flexible product innovation and further bring the company's consumer products under the brands, such as Schwarzkopf and Syoss, to the forefront of the industry.

With design concept of innovation, digitalization and sustainability, the center covers an area of more than 2,500 square meters and includes functions of consumer insights, cutting-edge technology research, product formulation development, packaging design, physicochemical analysis, and product performance evaluation.

David Tung, regional president of Henkel Consumer Brands Asia, said that the center will shape the company's product portfolio with unique research synergies to achieve higher growth, create more value for the Asia market, and drive Henkel's consumer brands to new heights.

"China is undoubtedly a highly significant market within our Asia business, currently contributing over half of the market share in the region. This makes the establishment of the R&D center here at this time crucial for us," he said.

According to Euromonitor International, a global market observer, the market of hair wash and care products in China grew at a compound annual growth rate of 6.7 percent from 2019 to 2023, and is expected to reach 131.2 billion yuan in 2023. Foreign brands accounted for the majority of sales among those with the highest sales value.

The center will help the company better observe Chinese consumers and their unique focuses and needs, said Frank Meyer, corporate senior vice-president R&D of Henkel Consumer Brands.

"Asian consumers, especially Chinese, generally have thicker and darker hair compared with Europeans. Moreover, Asians are highly concerned about scalp care, which they believe promotes healthy hair," said Meyer.

Tung echoed, "Chinese consumers are increasingly adopting a 'skincare approach' for scalp care, using ingredients commonly used on face to achieve enhanced scalp care effects."

Premiumization is a noticeable trend in the hair wash and care market in China in recent years, Tung said.

"Chinese women, especially those who go to salons regularly, are looking premium products with better quality these years," he said.

A report released by Chinese e-commerce giant JD in February 2023 showed that the online sales growth rate of high-end shampoo products priced at 120 yuan or above reached 114 percent, which became the main driving force for the increase in online sales of shampoos.

Tung said the R&D Center will focus on sustainability, particularly in packaging, in the long run. He raised the example of Schwarzkopf's Extra Care series, of which 50 percent of the current packaging bottles are made from recycled plastics.

"We aim to seek improved solutions to possibly reach 100 percent recyclable or reusable use," he said.