Hair is big business and a smart start-up, San Hair, is taking its cut of the black hair business in South Africa.
Nompumelelo Madubedube (26) is the sole shareholder of San Trading (Pty) Ltd – a 100% black-, female- and youth-owned company – which owns a human hair manufacturing plant in Midrand.
South Africa has an ever-increasing demand for hair care products, significantly in weaves and other hair products made from natural human hair. The most sought-after of these are usually imported from Asia and South America.
“Without a doubt, black consumers are driving this growth,” says entrepreneur Madubedube, whose company now produces a range of authentic 100% human hair weaves, wigs and hair accessories at her factory.
Madubedube says a big driver of the growth is consumers having access to social-media platforms such as Instagram and Facebook, which means they can get the latest trends and styles from fashionistas around the globe. Then they want to mimic that style at home.
Unsurprisingly, multinational companies such as Johnson & Johnson, Unilever and L’Oréal are firmly entrenched in this market. So, despite the growth in demand, competition for market dominance is stiff.
However, despite multinational heavyweights squeezing margins and creating unnatural barriers for aspiring entrepreneurs, Madubedube quit her salaried job to follow her business dream.
“The local market is home to a young and increasingly urbanised and working population. In addition, the emergence of a black middle class that has sufficient disposable income is encouraging to those looking for a break in this industry,” says Madubedube.
As a lover of weaves, she was concerned with the quality of the products that she had been buying in local shops. This is why she started importing weave products from India.
“During one of my trips to India, where I had gone to visit a supplier in 2014, I came across the sale of bulk unprocessed hair. This is what prompted me to conduct research into the production of weaves. It was then that the idea of manufacturing unprocessed hair in South Africa to minimise import costs was conceptualised.”
She compiled a business plan and submitted it to the Industrial Development Corporation (IDC) for processing. After the IDC approved her request for funding, Madubedube quit her accounting job to focus solely on her business. It’s been three years since she launched San Hair and prospects are looking good.
“Getting into business was a risk because I had to quit my job. As a young person, it was hard to start a business in manufacturing. The perception out there is that young people are not mature enough to start and run a business. Some lenders or other funding institutions prefer to provide funding support to existing business as opposed to risking their capital by funding an inexperienced young person,” she says.
While securing funding can be a frustrating time for an entrepreneur, Madubedube urges other aspiring entrepreneurs to be patient and pedantic about getting their strategy right.
“It took about a year for the IDC to approve and disburse the money required to kick-start our operations. Although the IDC kept me abreast of the gaps that I needed to close in order to secure funding, it was a frustrating period.
“Once the application was approved, I used the money to secure the machinery required to start the business, but, most importantly, the IDC also allocated a mentor to help me through the initial teething phase.”
The business currently has six full-time employees, but that figure could soon swell to double digits – especially as the business is registering a consistent 30% month-on-month growth.
“The irony about the hair care industry is that the Chinese and Indians, among others, have mastered the art of producing products that they don’t even use. I’ve yet to see an Indian or Chinese person who wears a weave.
“The fact that we at San Hair not only use these products, but produce them too, gives us a competitive edge and insight into how we can best grow our product range.”
As part of its growth plans, the company plans to branch into the production of synthetic hair, accessories and cosmetics that she hopes will be distributed in retail stores.
“The beauty about our products is that they aren’t seasonal. Every woman, regardless of race or income group, wants to look good every day and we want to be the preferred supplier of quality hair products that enhance beauty.”
A project in partnership with the IDC
Call the IDC on 0860 693 888, email them at email@example.com, or apply online: www.idc.co.za
The pre-investment business centre walk-in centre is at the IDC head office at 19 Fredman Drive, Sandton or visit one of the regional offices