Driving through townships throughout South Africa, it is easy to see why hair salons are considered one of the biggest entrepreneurial endeavours next to shebeens.
Colourful barbershops or salons occupy almost every block, located in everything from shopping centres, to shacks and shipping containers. A vital source of jobs for women, who make up a large percentage of the informal economy on the poorest continent, the black hair industry continues to grow.
The black hair market is divided into two categories: Dry Hair (weaves, wigs and extensions) and Wet Hair (shampoos, conditioners, relaxers).
While market research firm Euromonitor International estimates $1.1bn (R12.1 bn) of shampoos, relaxers and hair lotions (Wet Hair products) were sold in South Africa, Nigeria and Cameroon last year; Garron Reynolds, Managing Director of FR!KA Hair estimates the South African black hair market (Wet Hair and Dry Hair) is worth at least R4,5-billion.
FR!KA is Africa’s quality African hair company dedicated to supplying braids, weaves, wigs and hairpieces (Dry Hair products).
“Since a large part of this market is traded in the informal sector; reliable statistics as to the size of the market are hard to come by but I believe a conservative estimate of the South African Market spend is R3-billion (65%) on Dry Hair and R1,5-billion (35%) on the Wet Hair industries. Based on the 2011 Census, there are 11.5 million black women in South Africa aged between 15 and 49. Applying a 35% expanded unemployment rate, and adjusting for an estimated 10% of woman who don’t spend on hair care, factoring in R80 a month average (does not include installation), the potential hair care market in South Africa could be as large as R6.1 Billion rand.
Between 2008 and 2013, FR!KA sales showed a compounded annual growth rate of 30%.
Black woman favour variety in their hair styles more than White and Indian woman. “It is commonplace for a black woman to change her look completely, going from short to long, curly to straight, weave to braids.” These hairstyles can last for up to three months, but typical duration is about six weeks.
FR!KA’s Style Committee, made up of Beauty Editors, Stylists, Bloggers and Salon owners, meet twice a year to discuss trends happening both locally and abroad. New products are designed based on the discussions at these meetings. Garron himself has a large input into new colours and what materials are used to make up the final product.
Contributing to the company’s success is that FR!KA’s in-house product development team are continually innovating new products, all of which must pass vigorous quality control processes in China where some products are manufactured, and again once they arrive in South Africa.
“The Maxi Dread and Ombre Braid are great examples of new braid innovation, both are firsts from FRIKA; these products have taken the South African market by storm with the units sold of these items showing double digit growth from 2013 to 2014. Another sign of a successful style is when competitors try desperately to copy our styles; style names are trademark protected, yet competitors try and copy the names and style so as to ride the FRIKA wave.
The Euromonitor report revealed that ‘ethnic’ consumers in South Africa “are increasingly demanding products that are less damaging to their hair…shifting towards natural hair styles that are chemical-free and are trying to grow their hair out.” To this end, the FR!KA Hair Wrap and Shield Protector, which provides hair and scalp protection by ensuring bonding glue never touches the natural hair, has been a success.
“The scalp protector was developed to prevent hair loss, a major problem arising from the consumers of the Dry Hair market.” It also helps a woman suffering from hair loss to wear a weave.
Reynolds said that most of FRIKA’s growth for the coming year was expected to come from expansion into markets outside of South African borders. “This is due to the poor local economic forecast. The 20% customs duty is also hindering growth of a market that is very price sensitive.”
But as long as women continue to place emphasis upon the perfect hair-do, the haircare market will continue to grow. Reynolds cited the “lipstick index” coined by Leonard Lauder, chairman of Estee Lauder in 2001; where lipstick sales increase in recessions as a bit of optimism during these tough economic times in South Africa.
- Redstor offers Joyce’s Soup Kitchen some much needed support| #eBizPayItForward - December 4, 2019
- How what you study can lead to unexplored paths |#eBizInsights | Jamal Sahib - December 4, 2019
- Software licencing should be getting simpler, but it’s not | #eBizInsights |Richard Firth - December 4, 2019
- Syrex spreads some Santa Shoebox joy this festive season | #eBizPayItForward - December 4, 2019
- The real value of Paid Search and tracking the consumer journey |#eBizInsights| - December 4, 2019
- HAWKERS, HUSTLERS AND HERO’S | #Opinion | Ingrid von Stein - December 3, 2019
- SAB Urban Agriculture Podcasts: #10 A wrap up with SAB| #eBizEntrepreneur |Phumzile Chifunyise - December 3, 2019
- Offshore Investments: A Road map| #eBizFinance | Sylvia Walker - December 2, 2019
- SAB Urban Agriculture Podcasts: #9 Crispy Crop| #eBizEntrepreneur |Siphamandla Bilitane - December 2, 2019
- The power of positive sentiment, rugby and great business | #eBizInsight | Chris Botha - November 28, 2019