Lucrative Hair Extension Business: Cambonian Hair
PHNOM PENH, Cambodia – For an Internet start-up, Arjuni faces more challenges than usual.
The e-commerce site that sells hair extensions operates out of a five-story building here that lacks elevators and, sometimes, power. Employees typically have to travel to remote villages bymotorbike or on foot to pick up the goods that Arjuni sells. And the office floor is cluttered withpiles of hair strands instead of computers.
But in just two years, the company has grown from a handful of employees to 80, and it nowmakes more than $1 million in revenue. The start-up is also slowly gaining market share fromthe industry’s dominant players in India and China, as well as retailers in the United States andEurope.
“We not only buy and collect the hair ourselves, but sell it directly to our customers. This makesus stand out,” founder Janice Wilson said. A large proportion of Arjuni customers, like Ms.Wilson, are African-Americans seeking fuller styles for their tresses.
India has long provided much of the world’s natural hair, sold to wholesalers mainly in China,which in turn marketed their products to retailers in Europe and the United States. But Ms.Wilson found that Cambodians have similar hair quality, long with cuticles in alignment.
“Nobody had thought of Cambodia,” said Ms. Wilson, 39.
The hair extensions business generates annual revenue of$250 million. Extensions can cost thousands of dollars, buttypically average around $500.
Ms. Wilson provides employees with free English, computerand math classes. A third of workers come from troubledsituations like sex trafficking or spousal abuse. That efforthelped attract seed capital from a Japanese investment fund,Arun, formed in 2009 to help social enterprises in emergingnations. Additional money came from the Cambodian ExportMarket Access Fund, a World Bank-financed project thathelps companies trying to develop exports. The rest camefrom her savings, friends and family.
Like many new ventures, Arjuni is harnessing the latestInternet tools like Twitter and social media to build a loyalcustomer base. Customers eagerly describe their orders onhome videos that they upload on YouTube, with segments ontopics like hair design, delivery and grooming.
Clients are encouraged to send in pictures of stars they wantto emulate, like Catherine Zeta-Jones or Beyonce. Arjuni alsofloods Facebook with testimonials and promotions.
Ms. Wilson, originally from Green Bay, Wisconsin, is a lawyer by training. When she was onvacation in Cambodia four years ago, she began thinking about opportunities to start abusiness here.
She started off in real estate, but Cambodia’s property market fell with the global economy. Thecollapse of Cambodia’s textile industry largely led to her idea. Cambodian workers with sewingskills were suddenly unemployed.
“I was thinking, what is recession-proof?” Ms. Wilson recalled. The answer: “vanity.”
Hair extensions made from natural human hair must be cut, cleaned and sewn into individualpieces. “It was low-tech, they just needed to learn how to make them, and we just neededsewing machines. We could use the skills already here,” she said. Natural hair makes the bestextensions.
This spring, Arjuni started a series of in-person events in the United States called Halo, wherethe staff could meet and help groom customers.
“When I worked in a law office, I was bored out of my mind,” Ms. Wilson said. “When you havethis entrepreneurial spirit, you just have to do it.”
The New York Times
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