WELL-KNOWN consumer electronics giant Dyson is expanding into haircare and beauty products, with its first haircare product line, Chitosan, launched in Singapore in late August.
Chitosan is a range of hair treatment products created to maintain the hair’s natural movement and shine while removing stiffness. It is suitable for all hair types.
While the move represents a significant shift from Dyson’s traditional focus on high-tech consumer electronics, it is part of the company’s longer-term strategy to grow the business by diversifying into a new range of products.
“Our goal is to introduce more than 20 new products over the next four years,” said Kathleen Pierce, president of Dyson Beauty.
That goal is part of an investment made in 2022, when the group reportedly set aside £500 million (S$855 million) in its research and development (R&D) budget for haircare innovations.
Whether the move is prescient and strategic for Dyson remains to be seen, as haircare is already a crowded market segment – with incumbents at every price point.
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Players The Straits Times spoke with indicated that the company’s credentials in consumer electronics and tools do not necessarily mean its foray into haircare products will translate into similar success.
They expect Dyson’s entry into the new business to be challenging.
Tony Ong, regional general manager for Asean at Kao Salon Division, Kao Corporation’s professional arm, said haircare products typically require substantial spending on advertisements as well as promotions “because the market is very saturated”.
This could potentially cost well over S$1 million in the Singapore market alone, and would involve marketing activities such as participating in hairstylist exhibitions and engaging with celebrities or influencers.
“These costs would grow proportionately with the geographic breadth of the marketing efforts,” he said.
Ong also said that while Dyson has been successful on the consumer front, it may be harder for it to break into the hair-salon network with its new Chitosan line of products.
“Even for a brand as widely known as Kao, we are probably at the 60 point mark out of 100 in terms of trust level, something that takes years to build.”
Karen Lam, founder and chief executive of haircare treatment range Verdure, echoed the sentiment.
“Without any brand equity, it would be really hard to penetrate an already saturated consumer care market space. It would take a lot of marketing and spend to get the necessary brand visibility.”
Based on her experience launching a new brand that she created in 2018, Lam estimates that the cost could easily run into six or seven figures, even without accounting for the back-end support teams, such as digital marketing, social media and logistics.
“You would need some serious capital and retailing experience to manage this,” said Lam.
In Dyson’s case, however, it is important to remember that the company isn’t “starting from scratch”, said assistant professor Jane Jiaqian Wang at NUS Business School’s Department of Marketing.
“Starting from scratch requires a substantial range of resources, which can be prohibitive for any upcoming business.
“As an established brand renowned for its styling tools, Dyson is well positioned to leverage its existing resources and capabilities to gain a competitive advantage.”
She added that Dyson has accumulated considerable insights into consumers’ haircare needs through its experience in the electronics business, and there is also significant awareness of the Dyson brand.
“Marketing scholars have found that the fit between the parent brand and the extended new product are among the most important drivers of brand extension success,” said Wang.
Venturing into this new territory of haircare consumables aligns with Dyson’s image as an innovative, high-performance brand in hairstyling tools, which makes its expansion into haircare products both natural and exciting, she said.
Dyson’s new range of goods is likely to face another major hurdle – pricing. At just under S$80 for a 100ml bottle of product, the price is set at the high end of the spectrum.
At that price point, Dyson’s product is significantly higher than comparable top-selling products from established brands such as Moroccanoil – at S$30 to S$50 for 300ml, and Mielle – at around S$20 for 240ml.
Wang said Dyson’s price tag might deter many consumers. “While consumers may justify the purchase of a Dyson styling tool as a long-term investment, the same logic cannot be applied to consumable haircare products.”
An example of the more pragmatic consumer is Wong, a 30-something-year-old mother of two. She said: “Many of us ordinary Singaporeans wash our hair daily because of the humidity, and – unsurprisingly – I would baulk at paying for an expensive hair product only to see it go down the drain.”
Nevertheless, there are some loyal Dyson fans who would still pay for the Chitosan brand.
“I have their signature hairdryers and straighteners, I am familiar with the Dyson quality. So, I am definitely willing to give it a try,” said Yu, a media professional in her 40s.
On why Dyson decided to branch into haircare products, Pierce said: “We are always looking at nascent categories that we can disrupt.”
She highlighted Dyson’s 12-year involvement with hair science that had led to the development of styling tools such as the Supersonic.
“Since we already have the data and the research, it makes sense to also apply that knowledge to the adjacent business line of consumables.”
It has taken the company five years to build the product from the ground up.
“Everything was done internally,” Pierce said.
She said that Dyson uses the same approach to the new Chitosan line as with its traditional consumer electronics, in that “it is grounded in Dyson’s core technology”.
She expects the Chitosan range to ride on the distribution infrastructure that the company has already developed. It will also be sold through Dyson’s online and brick-and-mortar stores, as well as third-party distributors such as Sephora.
To win over consumers, Dyson will rely on its network of professional stylists and a team of styling ambassadors.
In Singapore alone, the company has worked with more than a thousand stylists and 300 Dyson exclusive salons, including Passion, Evolve and Jo:Hwa.
Financially, while revenues have increased over the past five years, operating profit fell to £1.3 billion in 2022, down from £1.5 billion in 2021.
The decline was attributed to rising operational costs, which eroded profitability.
However, Dyson rebounded with improved profits in 2023, suggesting that the company had navigated these challenges.
Cost-cutting has continued in 2024. In July, the company said it would lay off about 1,000 employees in Britain, primarily from manufacturing and procurement, citing increased competition as the reason for the job cuts.
In October, Dyson announced another round of retrenchments in Singapore despite assurances that no further cuts would occur outside Britain.
The exact number of affected workers in Singapore has not been disclosed. THE STRAITS TIMES