Making a fortune from the billion-dollar Hair Business
A low median age, social media and an expanding middle class are driving the multi-billion hair industry in Kenya, riding on influences from around the world and in the process creating opportunities for investors. The industry’s potential caught the eye of Indian multinational Godrej Consumer Products Limited earlier this decade and in 2011, Godrej JCPL entered a joint venture with the then owners of Darling Kenya. In 2016, Godrej announced that they had acquired 90 per cent of the Kenyan subsidiary of Darling, which was started in Senegal in 1979 and by the year 2000 had a Pan-African presence and was establishing itself as a strong player in the Kenyan market.
Growth in the industry is driven by the expanding middle class and the increasing influence of social media, which typically means that the hairstyle Beyoncé wore at the Global Citizen concert in South Africa will soon be on the head of a young Kenyan girl. Euromonitor, an independent provider of strategic market research, puts the value of the hair care industry in Kenya at KShs.12.7 billion in 2017, growing at seven percent per year. Some industry players say the actual figure could be KShs.2 billion higher. Gaurav Kaushal, who oversees Godrej’s interests in Kenya, says that the country’s low median age “influences trends drastically”. “We are now dealing with millennials.
They get interested very fast, they have access to social media and they change their preferences equally fast. They want new trends even faster than what earlier generations wanted,” he says. With earlier generations, a trend in the United States would find its way to Kenya after three or four years, but with the beauty influencers available a click away on Instagram, this takes six months to a year. “The life cycle of trends is becoming very short,” he says. Afrohair, or a natural look, has also become the norm. The black world sat up and listened when award-winning Nigerian author Chimamanda Adichie told American magazine The Cut in December 2016, “I can say very excitedly now that I absolutely love my hair and I wouldn’t change it.” The author, who has inspired Beyoncé to the extent of being quoted in her work, then described her struggles with keeping her hair in the best state possible, something many African women can relate to, and which sparked one of the biggest debates. For Darling, said Gaurav, the growing interest in keeping it natural is a huge trend.
“Anything which is linked to afro hair, natural hair, those styles are picking up fast,” he says. He also says that businesses are creating more styling and maintenance products, known in the industry’s parlance as wet hair products, to enable consumers keep a natural look. Mainstream companies have a firm grip on the hair care market in Kenya, with Haco Tiger Brands, L’Oreal East Africa and PZ Cussons the leaders. While the big brands have product ranges formulated for ethnic hair, the mainstream companies are still associated with relaxers and other unnatural products. “As a result, some customers still pledge their support to small, independent companies who produce products specifically for ethnic hair. The rationale is despite the influence the bigger brands have, these customers still perceive that the products they produce are not designed for women with ethnic hair,” Euromonitor says in their country report dated July 2018. For Paul Ng’ang’a, who owns Alkhemy Brands Limited, makers of the Mikalla range of hair products, the potential lies in the fact that only about 60 per cent of Kenya’s population uses cosmetics and other products, meaning that the 40 per cent will need a product sometime in the future. As the population has more and more money at their disposal, the numbers will grow.
The reported growth of the middle class is also another key factor for growth. “More money is coming into people’s pockets. If you were only using body lotion you are now using body lotion and maybe lip gloss and lip stick,” says Paul. He says that with people who were 15 a decade ago now turning 25 and earning, that is a market that small manufacturers like him and big brands like Darling will be fighting to get. Last year, Darling set up a unit whose core job is to understand consumer trends and styles.
They have so far spent close to KShs.200 million on research and development. The findings, says Gaurav, are pointing Godrej to the right direction. For example, they realised that the Kenyan market is very experimental and that it is influenced by social media – the customer’s presence, who they follow and what they see there – but the stylists make a big difference. “I was in Kenyatta Market and met a lady who travels 40 kilometers because she will only get her hair done by the same stylist.
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