Human Hair Business – One of the Lucrative Million Dollar Business in South Africa: If I were to ask you to name ten highly lucrative business opportunities in Africa, you would never think of human hair. That’s what makes this article so insightful.
The African dry hair market, namely the market for weaves, wigs and hair extensions, is currently estimated to be worth over US$6 billion annually and growing very rapidly.
And there seems to be good reason for the overwhelming size of the African hair market.
Studies show that black women are willing to spend at least twice as much as white women on hair and beauty products.
With more than 40 percent of the population living below the poverty line, the continent’s beauty business, especially hair products, is booming.
The trade value of shampoos, relaxers and hair lotions in Nigeria, South Africa and Cameroon exceeds US$1.1 billion annually. That figure also doesn’t include sales in her 40-plus other sub-Saharan countries.
Also, according to Euromonitor International, the African liquid hair care products market is expected to continue growing by he 5% from 2013 to 2018.
This article is not focused on the beauty industry as a whole, but on the multi-billion dollar human hair business.
And I’m talking about someone’s shaved real human hair, not the equally popular “synthetic” human hair extensions.
As you can see in this article, the enormous demand for human hair in Africa has made many entrepreneurs and investors very wealthy.
Unfortunately, many of these people are not African.
But Why Are African Women Crazy About Imported Human Hair?
Let’s not be sentimental about this.
The main reason the market for imported human hair is booming in Africa is because millions of people, predominantly women, are demanding for it.
And why are women willing to spend more than $250 (on average) on foreign hair?
Well, any woman who’s a fan of hair extensions will likely give you an exact, or varied response along the following lines:
“Hair extensions are the vogue and they make me look great.”
“I like to play with different hairstyles. I get bored if I have one style for too long.”
“My natural hair is fragile (breaks easily) and can be hard to deal with. Hair extensions make life easy for me.”
To be fair to the ladies, there’s a raft of evidence that proves that Afro-textured hair is notorious for fragility and coarseness (which can make it difficult to comb).
However, whether it is right or wrong for African women to ditch their natural hair for foreign hair, is a debate that’s beyond the scope of this article.
And Where Does All This Human Hair Come From?
Have you really ever wondered where all the human hair that gets imported into Africa comes from?
On the African market, human hair products are often branded along ethnic or racial lines. ‘Brazilian’, ‘Peruvian’, ‘Malyasian’ etc. are just a few of the very common names you’ll hear.
But in this section, we’ll take a good look at the real sources of the human hair that are available in thousands of stores, markets and beauty salons across Africa.
Here we go!
India is one of the biggest players in the human hair industry and exports up to $400 million worth of human hair every year.
With a population of roughly 1.3 billion people, of which just over 600 million are women, India certainly has the capacity to supply human hair at a global level.
Most of the virgin human hair sourced from India are from rural temples and villages where female Hindu pilgrims often shave their hair as a sacrifice to the gods, or as part of a yearly ritual. Most of these women in rural India have natural, high quality hair that may have never been treated with chemicals.
One woman can yield up to 280 grams of hair (about 10 oz). The longer the hair, the higher the price it fetches on the market.
Before the boom in the human hair trade, shaved hair in the temples were burned or used as stuffing for mattresses. But these days, they are collected, processed and auctioned to the highest bidder.
Some of the hair is packaged and sent to Africa. But most of it still makes its way to Europe and the USA where the demand for human hair is also very huge.
But there are two main types of Indian hair that reach Africa. They’re Remy and non-Remy hair:
Remy hair is usually collected from temples, and is often the highest grade of human hair because it retains its natural look since the hair cuticles face same directions.
Non-Remy hair, on the other hand, is processed because the cuticles do not face the same direction. So it is usually treated with hydrochloric acid to remove the cuticles, which reduces the quality of hair, before export.
So far so good, it looks like Indian hair is sourced from legit sources – women who voluntarily donate their hair.
However, due to the lucrativeness of the human hair business in India, there have been reports that reveal some shocking developments:
For example, more Indian husbands are forcing their wives into selling their hair, slum children are being tricked into having their heads shaved in exchange for toys, and human hair harvested from dead bodies in graveyards have often been rumored to be on the market too.
China has the world’s largest population of 1.4 billion people, of which about 50 percent are women. Like India, China also presents a significant supply pool of human hair for the global market.
China is a big player in the human hair industry, and exports a huge volume of human hair to Africa every year.
According to the World Trade Organisation, China exported nearly 75 percent of the world’s ‘bird skin, feathers, artificial flowers and human hair products’ in 2012.
And it continues to dominate the international trade in human hair.
But unlike in India where most of the human hair is ‘voluntarily sacrificed’ by women, in China it’s a full-fledged business – poor Chinese women, usually in rural areas, sell their hair for a fee to hair collectors, who are middlemen in the virgin human hair business.
Because of the growing demand for human hair, the Chinese market now trades in a wide variety of human hair collected from neighbouring countries like Myanmar, Vietnam, Laos and Bhutan.
But all of this hair is branded on the market as ‘Chinese’ hair.
The human hair business in China is very vibrant and the biggest buyers from Africa are: Nigerians, Ghanaians, Congolese, South Africans, Angolans, Kenyans and Ugandans.
But again, like in India, the fast-growing demand for human hair is leading to desperate measures.
For example, this investigation by the BBC into the human hair business in China found that human hair is often mixed with goat hair to improve profit margins.
And to command higher prices, Chinese hair is often labeled as Brazilian, Indian or Peruvian hair. I’ll reveal a little more about this in the next section.
3. South America (Brazil, Peru etc.)
This is where it gets really interesting.
I’m sorry to break your heart, but the truth is, a huge percentage of human hair sold in Africa as ‘Brazilian’ and ‘Peruvian’ are actually Indian or Chinese hair.
In her very revealing book, The Truth About the Human Hair Industry, international hair expert Alix Moore confirms the following:
“Brazilians do not sell their hair, nor do they cut it for profit or religion. It would be impossible for enough hair to be cut in the Brazilian community in abundance to provide for the world. There are no large-scale Brazilian temples shaving hair,” she wrote.
In fact, did you know that Brazil, and several countries in South America also import a lot of virgin human hair from India and China as well?
Due to the growing demand for human hair in Brazil, tons of human hair are smuggled into the country from India every year.
Like this incident in 2013 where a ton of smuggled human hair from India (worth some $400,000) was seized by Customs at the Sao Paulo International airport.
In the past few years, human hair dealers have been going to great lengths to disguise Chinese and Indian hair as Brazilian, Peruvian, Malaysian and other varieties.
Here’s another shocking revelation from a highly experienced US-based Indian hair importer and salesman who has been in the business for nearly 20 years:
“It’s all the same hair[Chinese or Indian]. They have different names for it. Whenever they exhaust one name they tag on another name. So, at the moment they have Brazilian hair, they have Peruvian hair, Indonesian hair, they have Malaysian hair, Italian and French too. Customers think it’s a new product and so they are going to buy it and try it at least once.”
If you still need more evidence to confirm these claims, then I recommend you take the time to read this BBC investigation that reveals just how Chinese hair is ‘re-branded’ as Brazilian, Peruvian and Indian hair.
This, my friends, is the secret sauce that the big and wealthy human hair importers in Africa know, but won’t tell anyone.
Because the profit margins on the ‘Brazilian’ and ‘Peruvian’ hair brands can be as much as 1,000 percent!
So, Who Are The Biggest Money Makers in the Human Hair Business in Africa?
As you may have already guessed, the wealth in the human hair business is firmly in the grip of Indian and Chinese merchants who feature prominently at the top of the pyramid.
African entrepreneurs and business people only feature at the bottom of the pyramid; usually at the import, wholesale and retail levels.
In this section of the article, I’ll walk you through the value chain of the human hair business and how a lot of money is made at different levels until the human hair product ends up on the head of a pretty African lady.
a) Sourcing level
The sourcing level is where the global human hair business starts. And the ‘collectors’ dominate this level.
Collectors, who may be individuals or organisations, are the first to come in contact with human hair, whether sacrificed by their owners (as in India) or sold (as in China).
In India, the rural temples are the biggest collectors of human hair. During the annual rituals, tons of ‘sacrificed’ hair are collected, bagged and sold off to the highest bidder during auctions. These ‘highest bidders’ are often exporters, processors or middlemen in the human hair business.
And these temples make a lot of money from collected hair.
To give you an idea, one of the biggest collectors of human hair in India is the Tirupathi Temple in Andra Pradesh. Since 2011, it has made over $97 million from human hair auctions.
In China, it’s common for collectors to ride through rural areas on bicycles, collecting hair from poor rural people who often sell their hair for additional income.
All of these collected hair is aggregated and makes its way to specialist hair markets where they are sold on to exporters, processors and middlemen.
b) Processing level
Most of the human hair collected from rural India and China are usually virgin – they have never been dyed or subjected to chemicals, or anything more abrasive than coconut oil and herbal soap.
Which is a good thing. That’s why the hair, in its natural and virgin form, is strong and healthy.
The problem is, due to market demand, a large portion of collected human hair is processed in different ways to make them look more European, Brazilian, Peruvian etc. All of this helps to boost the profit margins of the product.
In India and China, there are hundreds of factories dedicated to processing human hair.
After sorting and measuring, the first step of processing is washing, and this is often done by hand in giant baths. Then the hair is laboriously pulled through long beds of spikes by hand to smooth it before being tied into neat bundles of 200 strands each.
To create blonde or coloured hair (or any desired variations), the hair is soaked in chemical compounds for up to 20 days to remove the pigments.
And to make the product ‘high grade’, polymer bonds, which mimic the molecular structure of real hair, are attached to them.
All of this processing is targeted at increasing the perceived value of the final product, which can command a much higher price on the market.
c) Dealers & Exporters
In the human hair export business, quantity is measured in tons. And one ton of human hair is roughly equivalent to the contribution of 3,000 women.
Every year, India exports nearly 2,000 tons of human hair. I suspect China exports even more.
After the hair is processed and graded, it is packaged and branded for export.
Many of the big human hair exporters who used to be based in India and China, have now expanded their presence on the African continent.
Indian entrepreneurs like Ali Godrej, Chairman of the $3.3 billion Godrej Industries, have been acquiring African companies that specialize in hair care products – wigs, sprays, gels and hair extensions.
Other major human hair dealers like Dabur, Marico and VLCC have been growing their presence in Africa and are also betting big on the African hair care market.
d) Importers, Wholesalers & Retailers
Most African entrepreneurs in the human hair business feature at this level.
And the biggest guys here are the importers of human hair. These are the traders and entrepreneurs who often travel to China and India to buy human hair and import them back home.
The biggest human hair importers are in Nigeria, South Africa, Ghana, Congo, Angola and East Africa. And most of the cargo is imported to Africa by air and sea.
When the imported hair products arrive, they are sold on to wholesalers and bulk buyers who then sell on to the retailers.
Some of the biggest players in the retail segment of the human hair market are beauty hair salons. That’s hardly surprising given they’re closest to the final consumers, and women are more likely to trust and buy their human hair supplies from their favourite beauty salons.
Some beauty salons in Africa’s big cities like Lagos, Johannesburg, Cairo, Kinshasa and Nairobi make over $50,000 in human hair extension sales in a year.
However, there are consumers (usually bargain hunters) who prefer to buy their human hair products directly on the open market or from trusted friends.
The Business of Human Hair in Africa: Putting it all together…
When I started the research for this article, I never anticipated the surprise discoveries I would make.
Just before I rounded off, I had to call my wife to let her know how naïve we have all been about the human hair that’s sold to us in Africa. We hardly know where it comes from, and who the ultimate winners are in this impressive global business.
Of course, she was very shocked.
It left me wondering how many women have spent significant amounts on what they believed to be virgin ‘Brazilian’, ‘Peruvian’ or ‘Malaysian’ hair.
But you want to know what I really think?
I think African women, especially fans of human hair, won’t really care about all this. The truth is, the vogue of human hair speaks to several powerful triggers like convenience, functionality, beauty and vanity – the key reasons why African women buy human hair extensions.
And this is why I think the market for human hair extensions will continue to experience an explosive growth in Africa.
With its fast-developing economies, rapid urbanization, a growing influence of Western fashion, and a population of over 400 million African women who are under the age of 40, the demand and market for human hair in Africa is very likely to continue its upward growth.