The primary difference is their objective and consumer experience. Hand soap (assuming bar soap) is primarily soaponified fats that can be pressed into a shape. The solid form can provide some mild abrasiveness to help remove dirts. The goal is to remove as much as you can, and that’s why it generally leads to drying of the skin.
Liquid body wash will typically include less soap, more sufactant (sodium salts rather than calcium salts). It will typically include solvents like glycols which help to lather. The better body washes are careful to balance hydrophicity of the surfactants so they don’t dry your skin out too much.
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