Lately, an unusual and lucrative business opportunity has been created in Africa for Indian beauty and wellness companies—human hair.
Indian hair, renowned for its strength and texture, has become a sought-after commodity in Africa, where it is sold as wigs or extensions. The demand is such that it has encouraged many Indian companies to not only weave hair export into their global strategy, but also to invest in hair care business in the continent itself.
On Tuesday, Godrej Consumer Products India announced its plans to acquire the South Africa-based hair extension company Friska hair for an undisclosed amount.
“This acquisition reflects our continued commitment to providing African consumers with a wide range of superior quality products at affordable prices,” the company’s managing director Vivek Gambhir said in a statement (pdf). “We remain very excited by the tremendous potential of the African market.”
Other Indian firms including Marico, Dabur and VLCC also have hair care businesses in African countries such as South Africa, Morocco and Nigeria.
India’s hair export market is believed to be worth about Rs2500 crore ( $393.5 million), and is posting annual growth between 10% and 30%.
Since urban Indians tend to get chemical treatments for their hair at beauty salons, rural temples and villages are the preferred destinations for exporters looking for natural, high quality hair.
Among the biggest contributors is the Tirupathi Temple in Andhra Pradesh, which holds online auctions annually. Since 2011, it has managed to collect Rs618 crore ($97 million) through the sale of hair via e-auctions.
The Indian hair market is typically known to export two types of hair: Remy and non-Remy. Remy hair, usually collected from temples, is of the highest grade and gives a 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 treated with hydrochloric acid to remove the cuticles, which reduces the quality of hair, before export.
Africa’s dry hair market—as the market for weaves, wigs and extensions is known—is currently estimated to be worth $6 billion a year and growing. As a result, it has drawn global consumer giants such as Unilever and L’Oreal, who are investing heavily in African hair care products.
Since Africa’s young population is poised to expand rapidly (pdf), and urbanisation is increasing, consumer spending on personal care products is also expected to rise. And by all indications, that’s likely to include a lot of Indian hair.