The economics of the $7B+ human hair industry

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The economics of the $7B+ human hair industry


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It’s used to make calligraphy brushes, suit linings, and furniture. It’s enlisted to clean up oil spills. It’s even a part of the bagel-making process at Dunkin’ Donuts.

Most severed locks, though, end up on other people’s heads.By one estimate, the global wig, weave, and hair extension market is worth ~$7B — and it’s projected to grow to $10B+ by 2024 (an 8% CAGR).
In the United States, these products have long been popular among sufferers of hair loss, African American and Orthodox Jewish communities, and entertainment professionals.But in recent years, celebrities and social media influencers have attracted a new subset of human hair consumers.

Khloe Kardashian has a whole closet in her house dedicated to extensions; her sister Kim caused a Twitter storm when she posted a picture with a hair extension on the floor in the background. It seems every classic coiffure — from “The Rachel” to Ariana Grande’s signature ponytail — started life elsewhere. The journey that a strand of human hair takes from a grower’s head to a consumer’s head is complex and often opaque.

This process begins with harvesting, or collecting hair from the original source’s head. The vast majority of the world’s unprocessed hair comes from just 2 places: Hong Kong ($30.2m/year in exports) and India ($19m). According to Emma Tarlo’s book, Entanglement: The Secret Lives of Hair, local hair traders in China and India circulate from village to village searching for women who want to sell or barter their hair.

One major source is Hindu temples in Southern India, where pilgrims sacrifice their hair in a practice called tonsuring.

Venkateswara Temple, in the hill town of Tirumala, employs 1,320 barbers who shave an average of 40 heads per day. This tonsured hair is sold through e-auctions. In February 2019, one such auction brought in $1.6m from 157 tons of hair.

It takes at least 2 years for a woman to grow her hair to the minimum saleable length (generally 10 inches) — and as communities develop, women become less willing to part with it.This has forced harvesters in India and China to expand their search areas to less developed countries like Myanmar, Laos, Mongolia, and Indonesia.

The price of unprocessed hair is largely variable and depends on its length, texture, and condition.Hair cut directly from a woman’s head (called Remy) fetches the highest price and is commonly referred to as “black gold” by traders.

In 2018, hairdressers in Myanmar’s largest city, Yangon, were offering between $11 and $150 for a head of hair — anywhere from 4x to 55x the country’s minimum wage of $2.70.

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