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UGANDA MARKET

ANALYSIS FOR WOMEN’S


DRY HAIR PRODUCTS

JULY 2017
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
A. TABLE OF CONTENTS

S/NO. DESCRIPTION PAGE

1.0 PRODUCT DESCRIPTION 1


1.1 Introduction 1
1.2 Product Definition 1
1.3 Production of Hair Extension 3
1.4 Classification of Hair Goods 3
1.5 Types of Human Hair Extension 4

2.0 SUMMARY OF DATA AND HEADLINE ISSUES 5


2.1 Market Overview 5
2.2 Commonalities with other Markets in Africa 5
2.3 Implications for Product Manufacturers 6
2.4 Data Sources 6
2.5 Currency 6
2.6 Date of Publication 6

3.0 MARKET SIZE AND SEGMENTATION 7


3.1 Introduction and Summary 7
3.2 The African hair Extensions Market 7
3.3 Size of Uganda Potential Market Demand 8
3.4 Reasons for Strong Market Growth in Uganda 8
3.5 Target Market Customer Profile 9
3.6 Sources for Human Hair Products in Uganda 10
3.7 Local Manufacturing in East Africa 11

4.0 HAIRCARE MARKET BY PRODUCT CATEGORY 13


4.1 Introduction and Summary 13
4.2 Market Trends 13

5.0 MARKET STUDY AND PLANT CAPACITY 15


5.1 Introduction and Summary 15
5.2 Product Differentiation 15

MARKET SPECIFIC CONSUMER BEHAVIOUR,


17
6.0 PURCHASING CRITERIA, UNMET DEMANDS
6.1 Introduction and Summary 17
6.2 Demand Variations by Consumer Segment 17
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
6.3 Impact of Different Regimes on Purchases 17
6.4 Relaxing Extends Spending 18
6.5 Style Switching and Motivations for Switching 18

7.0 BRANDS, MARKET SEGMENTS AND PRICES 19


7.1 Introduction and Summary 19
7.2 Price Variations 19
7.3 Taxation 20

8.0 GLOBAL DEVELOPMENT TRENDS 21


8.1 Rapid Expansion of Synthetic Hair Goods Industry 21
Continuous Innovation in Manufacturing Techniques and
21
8.2 Product Designs
8.3 Shift in the Hair Goods Industrial Landscape 21

9.0 ENTRY BARRIERS 23


9.1 Strong Relationships with Hair Suppliers 23
9.2 Brand Effect 23
9.3 Technology 23
9.4 Cost Control 24

10.0 GLOSSARY OF TERMS & DEFINITIONS 25


10.1 Symbols Used in Tables 25
10.2 Extensions and Related 26
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
B. LIST OF TABLES

T/NO. DESCRIPTION PAGE

1 Haircare Market Share (Percentage) Sales by Product Category 5

2 Ugandan Dry Hair Products Market Summary Data 7

3 Haircare Formulations, African Specific and General 13

4 Summary Profile, Haircare Brands Numbers Identified 15

5 Hair Styling Regimes and Product Sales are Interdependent 17

6 Examples of Brands in Different Price Segments 19

Indicative Kampala Market Pricing for Selected Hair


7 Extensions 19

8 Definitions of Wet and Dry Product Categories 26

9 Relaxer Product Strength and Formulations 26


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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
C. LIST OF FIGURES

F/NO. DESCRIPTION PAGE

Global Production Market Share of Hair Extension by Type in


1 2015 2

2 Picture of Hair Extensions 2

3 Human Hair Extension Manufacturing Process Flow 3

4 Synthetic Hair Extension Manufacturing Process Flow 3

5 Classification of Hair Goods 4


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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
D. LIST OF ANNEXES

A/NO. DESCRIPTION PAGE

Tips on How to Start making Money from Hair Extension


I: Business 28

II: Indicative Kampala Market Price Lists 29


UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
1.0 PRODUCT DESCRIPTION

1.1 Introduction

In most black nations of the world including Uganda, hair extensions and wigs are
arguably the most sought after hair products. This is due to the widespread preference
for a long, straight hair as opposed to the short and kinky nature of the African woman.
This taste has created a huge market for these products over the years.

Due to the increasing number of trends evolving in the world today, women have no
choice but to adopt the new trends. The market is now flooded with artificial hair pieces
or extensions that come in different styles, textures, colours, brands as well as prices.
Women today are literally spoilt for choice when it comes to hair extensions.

Women choose hair styles depending on what they love, what they do, who they look
up to or according to their daily schedules. They usually change their hairstyles weekly,
monthly, bimonthly and so on. Every woman desires to look new and fresh always.

It is worth noting that there are a number of hair extensions and their affiliated
products in the market. The types of hair extensions in the market nowadays range
from Brazilian, synthetic, human hair, Peruvian hair, Indian hair, amigos attachment,
expression attachment, pony tails and wigs. We should know as well that the cost of
procuring these extensions come in a stratified way.

Then to top it off, there can as well be an extension to the hair extension business, in the
sense that you would also include the products for hair maintenance as well.

1.2 Product Definition

• Hair extensions are a type of cosmetic product that alters the appearance of
natural hair by making it appear longer, thicker, layered, or simply a different
style. They can be made with two different types of material — human hair and
synthetic hair.
• Human hair extensions are made from real human hair, while synthetic ones are
manmade from a variety of synthetic fibers. The primary advantage of synthetic
hair extensions is affordability, as they tend to cost far less and are more readily
available.
• A bundle of hair extensions is about 100--110g.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Figure 1: Global Production Market Share of Hair Extension by Type in 2015
Human hair extensions Synthetic hair extensions

14.32%

85.68%

Source: QY Research Reports

Figure 2: Picture of Hair Extensions

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
1.3 Production of Hair Extension

Figure 3: Human Hair Extension Manufacturing Process Flow

Figure 4: Synthetic Hair Extension Manufacturing Process Flow

1.4 Classification of Hair Goods

Hair goods consist of head coverings or hair extensions used for lengthening or adding
fullness to one’s hair by incorporating additional human or synthetic hair. They are
worn as daily wear for beauty and grooming purposes or for functional purposes such
as to cover for hair loss. They are also worn as part of cultural traditions or religious
observance, or for occasions or festivities, such as Halloween. Wigs and accessories can
be wide-ranging, and include full wigs, half wigs, toupees, doll wigs, braids, bangs and
buns. Hair extensions are hair products for adding length and/or fullness to one’s hair
by adding human or synthetic hair through taping in, clipping, fusing or weaving. Wigs

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
and accessories can be made from human hair or synthetic hair. Hair extensions are
made from either human hair or synthetic hair.

Human hair goods offer the most natural look and feel. While human hair goods are
generally more costly than their synthetic hair counterparts, with proper care human
hair goods are generally more durable and can last over a year. Human hair goods are
generally made from either Chinese, Indian or European/Caucasian hair.

Synthetic hair is made from non-human materials such as synthetic fibre. It is less costly
than human hair.

The following diagram illustrates the classifications of hair goods.

Figure 5: Classification of Hair Goods

Hair Goods
Chinese Hair European/
Caucasian Hair

Indian Hair Others (such as


Wigs and Hair Extensions Indonesian)
Accessories

Human Hair Wigs Human Hair


and Accessories Synthetic Protein
Extensions
Filament Filament

Synthetic Wigs Synthetic Hair


and Accessories Extensions

1.5 Types of Human Hair Extension

 Brazilian Hair  Chinese Hair


 Peruvian Hair  Synthetic Human Hair
 Malaysian Hair  Expression Attachments
 Indian Hair  Amigos Attachments, etc.

All these hair extensions come in varieties of length, colour and brand.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
2.0 SUMMARY OF DATA AND HEADLINE ISSUES

2.1 Market Overview

Market estimates vary, but the estimated 36.59 million Ugandans spent approximately
US$ 52.887 million (approx. UGX 190.39 billion) a year, in 2016, on haircare products.
Uganda, is now one of the fastest growing haircare markets on the African continent.
The country is also becoming an important hub and distribution centre for the eastern
part of the continent.

The Ugandan haircare market is now looking bouncy and very positive. Experts
forecast average sales growth of about 20 percent in 2017, compared to 2016. However,
in the current economic slowdown, consumers cut back on haircare and beauty
spending – in particular the low-end consumers, who could account for 65-70 percent of
sales.

Table 1: Haircare Market Share (Percentage) Sales by Product Category


(Ranked as average percentage of haircare sales by companies interviewed. Figures rounded.)
Product category % US$
Relaxers 14.80 % 12.52 million
Extensions 65.23 % 55.20 million
After care products 6.64 % 5.62 million
Liquids 10.44 % 8.83 million
Colour 2.89 % 2.45 million
TOTAL 100.00% US$ 84.62 million1
Source: Euromonitor International

The table above lists the products in the Ugandan haircare market, broken down into
percentage sales.

2.2 Commonalities with Other Markets in Africa

The following sets out the chief commonalities identified between the market in
Uganda and other countries in Africa, among which are South Africa, Nigeria, Ghana
and Kenya.
• Haircare regimes for Ugandans are high maintenance. These regimes determine
both the demand for products, and the demands made of products.

1 Total gives the estimated actual current market consumption for all haircare products in Uganda.
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
• Ugandans use a very extensive range of products because they like to alternate
different types of styling, that is, to change from relaxing hair to using
extensions.
• There is a very profound consumer fear of damage to hair from the use of
relaxers.

2.3 Implications for Product Manufacturers

The regularity with which people switch hairstyles has implications for product
manufacturers and distributors. Manufacturers must offer products in a range of
categories that are used in the many different styling regimes.

Brands that do not, for example, offer oils for braids miss out on sales to that, large,
consumer segment. Braids are one line in a category that accounts for 40% of sales in
retailers.

2.4 Data Sources

This report is based on desk research and interviews with market experts, products
suppliers, distributors, and beauty supply stores (retailers) specializing in the Ugandan
haircare market. Interviews are essential to market analysis, as there is often a shortage
of data, and the published data available may be significantly outdated or lacking in
detail.

2.5 Currency

The currency used throughout this report is the Uganda Shilling (UGX). The official
symbol for the currency is UGX, but the use of the term Shilling is common place.
Current value of 1 USD is 3,600 (www.xe.com) at time of publication.

2.6 Date of Publication

July 2017.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
3.0 MARKET SIZE AND SEGMENTATION

3.1 Introduction and Summary

There are more positive drivers than negative in the Ugandan hair care market, where
the consumer fundamentals are strong.

In Uganda, the main growth driver is rising disposable incomes for the growing
numbers of middle class Ugandans, and the large numbers of young people and their
willingness to spend money on their appearance.

Table 2: Ugandan Dry Hair Products Market Summary Data


Currency Value
US$ 211.55 million
Uganda Shillings (UGX) 761.57 billion
Source: Euromonitor International

Table 2 above sets out the estimated value of the dry hair products market in Uganda,
in US$ and UGX (Uganda Shillings)

3.2 The African Hair Extensions Market

Hair is a lucrative industry in Africa, estimated to be worth $6 billion. According to a


Reuters 2014 African market survey report, African women, particularly those in
Nigeria, South Africa and Cameroon, reportedly spent approximately $1.1 billion
dollars on hair products such as shampoos and hair lotions in the 2013/2014 financial
year. Africa’s dry hair market of weaves, extensions and wigs both from synthetic or
human fibre is estimated to be worth $6 billion and has attracted multinationals such as
L’Oreal and Unilever.

The hair-care sector is also one of the biggest sources of job creation for women in the
informal sector as they open their own salons or create make-shift salons in the streets
of urban areas. The demand for Indian and Brazilian hair extensions and wigs as well as
synthetic hair continues to grow on the continent, with estimates of the market being
worth $600 million. Indian hair extensions are surpassing synthetic ones in popularity
on the continent due to their durability, easy maintenance and easy reusability. As a
result, the continent will see an upsurge in Indian hair demand, creating lucrative
businesses for independent beauty stores and distributors.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Indian beauty firms that sell hair extensions are also set to make big bucks from Africa’s
demand for the product. Marketing hair products on the continent is set to grow with
extensive use of credible celebrities, and also used social media to popularize the brand
as well as Indian hair extensions.

Black women favour variety in their hair styles more than White and Indian women. “It
is commonplace for a black woman to change her look completely, going from short to
long, curly to straight, weave to braids.” These hairstyles can last for up to three
months, but typical duration is about six weeks.

3.3 Size of Uganda Potential Market Demand

Since a large part of this market is traded in the informal sector; reliable statistics as to
the size of the market are hard to come by, a conservative estimate of the Ugandan
Potential estimated market spend would be about is UGX 495.02-billion (65%) on Dry
Hair products (including braids, weaves, wigs and hairpieces) and UGX 266.55-billion
(35%) on the Wet Hair products (including relaxers, after care products, liquids and
colour). Based on the 2014 Census result projections, there are about 8.9 million black
women in Uganda aged between 15 and 54. Applying a 65.2% expanded
unemployment rate, and adjusting for an estimated 10% of women who don’t spend on
hair care, and factoring in USD 8 (UGX 28,800) a month average spend (does not
include installation), the potential hair care market in Uganda could be as large as USD
211.55 million (UGX 761.57 billion) – Please, refer to Table 2 above.

3.4 Reasons for Strong Market Growth in Uganda

Why has there been such an upsurge in demand for women’s dry human hair
preparations in Uganda in recent years?

First, Uganda’s economy despite the current slump has been relatively stable to the
extent that it has fostered the emergence of a established middle class with western
style tastes and consumer preferences. Within this sizeable (mostly urban-based)
middle class population, people’s living standards are now much higher and much
wealthier than they were 10-15 years ago. Uganda is also a pivotal member of the
regional trade bloc EAC and is able to positively influence its neighboring countries and
also play a leading role in the region. As the demand of hair products increases, more
neighbouring countries would rather buy from Uganda owing to the centrality of its
location within the eastern Africa region, favourable business investment regime, and
stability of its macro-economic regime.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Second, Uganda has a large and fast-growing population and averagely good
consumption capacity. By the end of 2016, Uganda’s total population was estimated
36.59 million (Data was collected according to the UBOS 2014 Census population
projections). There are African, and Indian/Asian populations, in which the black
African population is the majority, making up the 98.5% of the total population. This
98.5% population is the most potential hair buyer. They love to wear hair extensions as
well as wigs. In the recent years, with the fast development of Ugandan economy, the
mid-to high-end hair products like virgin hair and Brazilian hair becomes more popular
with them.

Third, light industry is a weak point in Uganda, which makes it necessary to import
large quantities.

Ugandan light industry is almost blank. The domestic production capacity can’t meet
their ever-increasing demand of hair products. Besides, it is difficult to reach to hair
material resource in Africa. Thus, they need to import. Hair products from China are
one of the popular items in Uganda. In the past few years, synthetic hair products at
low price from China were the best seller and gain numerous Ugandan buyers even
African buyers. It is estimated that natural human hair products will be a trend in the
future.

Overall, comparing with African hair products market in the last two years, Uganda is a
good choice and a place of potential for investment in the manufacture and/or trading
in hair extensions since profit margins are one of the highest on the African continent.

The haircare business is also a vital source of jobs for women in Uganda, who make up
a large slice of the informal economy on the poorest continent.

3.5 Target Market Customer Profile

There are a wide variety of people now using hair extensions, from people who want to
cover a hair loss, to those who use it to change their looks and styles and for other
fashionable purposes as well.

Empirical market research allows us to gain insight into what the market would expect
from a hair products enterprise and what it would in turn expect from the market. Due
to the market research carried out, we are able to discern the commercial and private
customers that would need hair extension products;

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
 Black African women
 Celebrities
 Female senior citizens
 Cancer patients
 Movie actors and actresses
 Male and female artistes
 High classed personalities
 Hair stylists
 Tourists
 Business people
 Fashion Designers
 Hair Studios

The typical hair extensions consumer in Uganda would however be more narrowly
defined to fall within the following categories:
 Between the ages of 30 and 55
 Income levels ranging anywhere above UGX 1 million a month
 Female
 Typically employed part or full-time

3.6 Sources for Human Hair Products in Uganda

Wigs and weaves have become the biggest moneymakers in Uganda, in an industry
dominated mostly by Asian-based companies. Local players are however catching up
quite fast in this highly competitive and lucrative market (especially in retailing) and
can be seen in places such as GAZALAND shopping mall on Luwum/William Street
and MABIRIZI shopping mall complex on Kampala Road.

As the countdown for the end of the year season begins and the Christmas mood sets
in, most hair salons and beauty parlours in cities like Kampala, Mukono, Jinja, Mbarara,
Mbale, etc, are a flurry of activity as customers seek to modify their looks with new
hairstyles and wigs.

When it comes to artificial hair extensions a woman’s hair speaks volumes about her
personality and style. “The hair on a woman is the beauty, without the hair I am not
sure one can be totally beautiful, so ladies hair is one of their pride, a woman has to
make her hair,” to look presentable. The scramble for quick cash from artificial or
synthetic hair has seen several Asian-based companies from as far as China and Japan

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
set up factories in places like the Namanve Industrial Business Park (e.g. Darling Ltd)
where they make a roaring trade selling their products.

The bulk of the hair sold in Uganda comes from Asia and is made up of cheap synthetic
fibres, while natural hair is offered at higher prices. Some imported hair extensions
have easily sold for as much as 1000 – 2500 US dollars and buyers are plenty.
Competition is fierce there is a lot of hair out there, different hair manufacturers out
there, not just in Uganda but also coming from abroad especially from China and now
Korea, now flooding the Ugandan market.

This emerging trend now rings a bell that it is now high time for indigenous Ugandan
entrepreneurs to wake up and smell the coffee by starting to invest in artificial or
synthetic hair manufacturing as well and just watch the money flood in.

3.7 Local Manufacturing in East Africa

Within East Africa, one company has emerged as a particularly rich and exciting
example of industrial investment in the hair extensions line of business: that of Darling
Ltd (figure 1 and 2). The Darling group is made up of a number of Lebanese-run
companies producing synthetic hair extensions across 22 African countries. They are the
largest producer of this product on the continent. The Ugandan branch, based in
Namanve industrial park on the outskirts of the capital city of Kampala, is headed by
Yousef Chamas. Under his direction, the company has sustained its position as a
leading producer for the East African region and a highly successful example of local
manufacturing, while also exporting products to the Democratic Republic of the Congo,
the Republic of Rwanda, and the new Republic of South Sudan.

The Darling Ltd network of companies has flourished through a family-based model of
business practice, mirroring the long history of Lebanese enterprises on the continent.
Indeed, although Darling has recently gone public, with 51% of the shares now owned
by the Indian chemical giant Godrej, Chamas still regularly referred to Darling Ltd as
“one family”. The geographic siting of Darling factories and distribution centers is also
rooted in historically produced pathways of migration, settlement and trade. The
company was originally formed in Senegal in 1960, the center for initial Lebanese
settlement and trade in the 19th century. Chamas felt that East Africa offered new
markets and economic opportunities and he moved first to Kenya in 1985, and then
Uganda in 2004. Between 1992 and 2011 Uganda, alongside its East African neighbors,
underwent rapid economic growth, with an average rise in GDP of 7%/year (AEO
2013), albeit unevenly centered on the south and particularly the capital city of

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Kampala. With a growing middle class, estimated by the African Development Bank to
be around 6.1 million people, and mirroring those of Kenya and Tanzania (Tentena
2012; AfDB 2013), Kampala emerged in the last decade as a vibrant city for the East
African beauty trade.

After 30 years in East Africa, Chamas has set up Darling manufacturing plants in
Kenya, Tanzania and Uganda. Their most recent expansion is to Burundi, which has a
far smaller middle class than Uganda and Kenya, but offers geographic proximity to the
large, lucrative and fashion-conscious Congolese market. The company’s director,
Nadar Barak, has been selected to take the lead in setting up Darling’s operations in
Burundi.

The company leaders have worked hard on innovating and developing new styles for
their market: women from across the age and socio-economic class spectrum. Darling
Ltd Uganda releases three to four new styles a month, around fifty a year, in order to
ensure the company remained positioned as a fashion leader, and to ensure customers
continue to purchase new products.

Though this is small compared with their sister company Darling Kenya, which releases
over seventy-five a year, they still produced and sold an impressive 800,000 weaves of
varying designs a month in 2012, expanding this to 1.2 million the following year.

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4.0 HAIRCARE MARKET BY PRODUCT CATEGORY

4.1 Introduction and Summary

Ugandans use a wide range of products, treatments and services. The product
categories are somewhat different to those in the general (e.g. Asian/White consumers)
consumer market. For example, the products include both African and general
formulations, and not only wet, but also dry products.

Table 3: Haircare Formulations, African Specific and General


(As percentage of haircare market)
Formulation %
African Type of Hair 98.2%
General or White Hair 1.8%
TOTAL 100.0%
Source: Euromonitor International

The table above sets out experts’ estimates of the percentage of products used by
consumers in Uganda that are specifically formulated for Black African hair, and the
percentage that are general formulations, that is for all hair types.

4.2 Market Trends

The hair extension business has snowballed into a huge business, with more people –
men and women using the extensions to achieve styles that could not otherwise be done
by the natural hair. However, asides from the fashionable use, there are practical uses
for hair extensions such as protecting the natural hair from constant styling and harsh
hair chemicals. Any entrepreneur who intends to get into this market must however
study the trends so as to be able to identify where reliable vendors can be sourced so
that customers can get the best quality hair extensions needed.

Because the hair extension business is one that has a huge market share, more hair
extension producing businesses have entered into the industry, which has caused stiff
competition as regards getting customers. In this regard, most of these businesses have
resorted to using various strategies aimed at attracting all the different kinds of
customers such as giving discounts to hair stylists since most people trust the opinions
of their hair extensions.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Also, because of the huge positive impact of the internet, more hair extension business
owners are running part of their businesses online especially as more people are
beginning to shop online for most of their wants and needs. Also, the internet affords
the hair extension business the opportunity to be able to reach a wide range of
customers than would have been possible otherwise.

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5.0 SUMMARY OF LEADING BRANDS

5.1 Introduction and Summary

There are well over 100 companies and brands that sell into hair care market in Uganda.
Of these only 10 are market leaders.

The brands identified include both special or ethnic formulations and general hair care
formulations. The market is very fragmented in terms of brands. It runs the spectrum
from premium quality brands to low quality lines. Further, the quality brands that lead
in the upper end of the market may have no sales in other market segments.

Table 4: Summary Profile, Haircare Brands Numbers Identified


Metric Data
Number of brands (total) 64
Number of brands products 115
Number of brands (dry hair) 18

Number of market leaders 10


The leader’s/leaders’ share 73%
Source: Author’s research

The table above shows that, of the many companies identified, there are only 10 market
leaders in haircare in Uganda.

Research conducted in 2017 identified some 64 companies in the haircare products


market, and another 18 companies in dry hair category.

The top two companies could have a combined 55 percent market share, and all other
brands share the remaining 45 percent. The leaders dominate the market through their
relaxers, and their relaxer-related treatments.

5.2 Product Differentiation

Today there are more than 100 brands of hair in Uganda, making the market worth
about US$210 million, he said, roughly four times more than in 2005.

Much of the hair sold is the cheaper synthetic type and comes from Asia. Pricier natural
hair is prized because it lasts longer, retains moisture and can be dyed.
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS

Some companies dealing in braids for instance, sources much of their natural hair from
India, which has a culture of hair collection, particularly from Hindu temples or village
"hair collectors".

The hair is then sent to China where it is processed into extensions and shipped to
Africa. Hair from yaks, to which some people are allergic, is now used less.

In one clue to the potential for Africa, market research firm Mintel put the size of the
black haircare market in the United States at $684 million in 2013, estimating that it
could be closer to $500 billion if weaves, extensions and sales from independent beauty
stores or distributors are included.

What is certain is that Africa's demand for hair products, particularly those made from
human hair, is only growing.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
6.0 MARKET SPECIFIC CONSUMER BEHAVIOUR, PURCHASING CRITERIA,
UNMET DEMANDS

6.1 Introduction and Summary

Sales trends for the different product categories are the result of the specific haircare
regimes of Ugandans. These regimes determine both the demand for products, and the
demands made of products.

Ugandans generally have a range of unmet, and only partially met, product demands.

6.2 Demand Variations by Consumer Segment

Haircare regimes vary by consumer segment. One consumer segment, affluent young
Ugandans (including men) consume a greater variety of products than other consumer
segments.

Table 5: Hair Styling Regimes and Product Sales are Interdependent


Regime Direct Purchase Related Purchase
Relaxing 35% 37%
Extensions 45% 47%
Short Hair 20% 16%
Source: Deloitte Consumer Review Africa 2016

The table above sets out the different hair styling regimes and how they affect demand
for products. For example, people who have relaxed hair not only buy relaxers, but they
also buy aftercare products.

6.3 Impact of Different Regimes on Purchases

The impact of the hairstyle chosen on the demand for products can be significant. These
are some examples:
 People who use relaxers and extensions generate significant sales, directly and
indirectly when they buy a lot of products to take care of their hair.
 People who get extensions use shampoos and sprays to keep them fresh, and
hair foods for their own hair.
 People who get weaves use oil sheens, and sprays to keep the weaves looking
fresh and glossy.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
 People who opt for natural hair styling generate a relatively low level of product
sales, as one retailer noted: “People wearing their natural hair only use liquids,
and gels, and maybe colourants.”

6.4 Relaxing Extends Spending

Furthermore, some people can indulge in different hair regimes at the one time. That is
they not only relax their hair, they also use extensions.

One expert explained why: “Some relax their hair before putting on extensions.
Relaxing before putting on extensions is indeed a double expense. But customers do not
mind because the extensions are re-usable so they are happy to buy expensive ones that
last longer. (A person relaxes her hair and puts on a weave, keeps it on for four to five
weeks and then takes it off to wash hair, as it begins to smell, and then puts the weave
back on).”

6.5 Style Switching and Motivations for Switching

A notable feature of the Ugandan haircare market is the long established practice of
many consumers –– mainly women –– to regularly switch their hairstyles, for example
changing from relaxing to extensions. This switching among styles is also seen among
Black consumers in other countries both in Africa, and elsewhere e.g. UK, and USA.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
7.0 BRANDS, MARKET SEGMENTS AND PRICES

7.1 Introduction and Summary

Table 6: Examples of Brands in Different Price Segments


Segment Brand(s)
High Great Lengths,
Hair Dreams,
Donna Bella,
Hotheads
Middle Racoon,
Extensions Plus,
Halley’s Curls
Low Abuja,
Anhui,
Jinruixiang
Source: Author’s research

The table above lists the brands that have been noted on the market, and their price
point. For example, Great Lengths and Hair Dreams & Hotheads were recognized as
being part of the top price segment band and Abuja (Nigerian) and Anhui (Chinese)
part of the lowest price segment band.

7.2 Pricing Variations

One of the good aspects of this investment in Uganda is the presence of little or no price
regulation. Price varies from place to place. You may decide to set your own price based
on the financial status of your potential customers as well as your locality. Price of hair
extensions also depends on the length and thickness of the hair, In Uganda, getting
these products from the open market is way less expensive than buying from a
boutique. Prices range from $20 (UGX 72,000) to $200 (UGX 720,000) a pack.

Table 7: Indicative Kampala Market Pricing for Selected Hair Extensions


Product Description Unit Price (UGX) Package Size (No. of Units)
Braids 1,600-2,000 200
Weaves 13,000-19,000 150
Source: Author’s research

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
7.3 Taxation

The URA Import Duty rate for importing human hair preparations into Uganda is 25%.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
8.0 GLOBAL DEVELOPMENT TRENDS

The hair goods market has been characterized by the following development trends:

8.1 Rapid Expansion of Synthetic Hair Goods Industry

After the introduction of cheap, mass-produced synthetic hair goods in the last century,
synthetic hair goods have penetrated the previously unexplored middle and low
income consumer groups and gained substantial market share in the past decades. In
terms of quantity, synthetic hair goods account for a larger proportion of hair goods
sold globally due to their low price and variety. In terms of quality, synthetic hair goods
are increasingly natural looking due to technical improvements, making them hardly
distinguishable from human hair products without close inspection. Synthetic hair
goods provide a cheaper but decent substitute for the more expensive human hair
goods for customer groups with lower income.

8.2 Continuous Innovation in Manufacturing Techniques and Product


Designs

To improve the quality of raw materials, reduce discomfort and enhance the
authenticity and aesthetics of hair goods, especially those made of synthetic fibre,
increasing attention is expected to be paid on innovation in production technology and
product design globally. An increasing number of hair goods manufacturers are
introducing machinery that enables some of the manufacturing processes such as
dyeing, washing, and weaving to be highly automated. Moreover, technical innovations
in chemicals used in the manufacturing process, such as high-quality conditioners and
detergents, are enabling more manufacturers to preserve the quality of raw materials,
such as delicate human hair. In terms of product design, hair goods with up-to-date
fashion features are increasingly popular, especially for consumers in developed
countries, which in turn will stimulate more hair goods manufacturers to focus on
product design of their products rather than simply meeting customers’ needs, and
introduce more higher profit margin products to the market.

8.3 Shift in the Hair Goods Industrial Landscape

Hair goods manufacturing is a labour-intensive industry, thus the rising labour costs
have forced hair goods manufacturers to shift their production bases to lower labour
cost regions. In China and India, hair goods manufacturers have capitalized on low
labour costs and proximity to hair sources to dominate the global hair goods
manufacturer market. In the future, however, as the labour costs in China and India
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
continue to rise with their economic expansions, the production bases of hair goods will
gradually shift to other developing countries with lower labour costs and more
available land resources such as Bangladesh, Vietnam and Laos.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
9.0 ENTRY BARRIERS

The hair goods market is subject to the following entry barriers:

9.1 Strong Relationships with Hair Suppliers

Hair goods manufacturers are heavily dependent on human hair and synthetic fibre
suppliers. Therefore, it is important for manufacturers to develop a good relationship
with upstream suppliers in order to secure adequate supplies. However, many existing
manufacturers have already established close relationships with human hair suppliers.
Existing manufacturers tend to form exclusive deals with certain quality suppliers,
depriving new entrants of quality sources of the scarce human hair supply. Moreover,
large human hair goods manufacturers tend to purchase and keep large stocks of
human hair, further keeping new entrants from obtaining large quantities of human
hair supplies.

9.2 Brand Effect

Manufacturers of well-known brands are often associated with better quality and are
considered more trustworthy in terms of product safety and other aspects. Wholesalers
and consumers alike, with limited knowledge of the hair goods industry, tend to choose
reputable hair goods manufacturers. New entrants will find it hard to establish their
own brand and expand their market share. Without relatively strong brand awareness,
new hair goods manufacturers may struggle to find potential customers compared with
the experienced manufacturers. Furthermore, without industry expertise and client
resources, new market entrants will find it very difficult to gain an edge over the
existing hair goods manufacturers.

9.3 Technology

Some existing manufacturers have already researched and developed technology for
producing synthetic fibre such as multi-colour fibre production. New hair goods
manufacturing entrants that do not already possess sufficient technological proficiency
have to procure good quality synthetic fibre from existing manufacturers at higher
prices. In addition to having established technical expertise in the production of hair
goods, existing manufacturers have skilled personnel, with know-how in the hair goods
manufacturing industry, to produce their handmade hair goods. Furthermore, existing
manufacturers can afford to conduct thorough research on the latest developments in
human hair goods production techniques and thereby provide a wider range of
products by utilizing advanced knowledge and technology. New entrants would need
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
to either have professional personnel in manufacturing or sufficient capital investment
in developing new technology in order to effectively compete. Therefore, small market
entrants with little prior experience or weak technical capability will find it difficult to
enter the market.

9.4 Cost Control

Hair goods manufacturing involves numerous labour-intensive processes that require


workers and hair specialists. Consequently, labour costs constitute a large proportion of
the production costs. For existing hair goods manufacturers, particularly the large
players and industrial leaders that employ thousands of workers, labour costs can be
more easily managed with economies of scale and better labour management skills. In
contrast, small manufacturers will generally find it more difficult to control costs and
therefore will achieve smaller profit margins as compared to larger players, which may
be an impediment to rapid expansion to gain market share. For new market entrants,
the high costs involved in the production process serve as a significant barrier.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
10.0 GLOSSARY OF TERMS & DEFINITIONS

10.1 Symbols Used in Tables

AEO African Economic Outlook


AfDB African Development Bank
Av. Average
CAGR Compound Annual Growth Rate.
C&T Cosmetics and toiletries
DIY Do It Yourself
e.g. for example
est. Estimate
K Thousand
mil. Million
MITC Ministry of Industry, Trade and Cooperatives
M2 Square metres
N/ A Not Available
Neg. Negligible
Negative growth e.g. minus 10 percent represented in tables as – (10) percent.
OTC Over the Counter, sales of retail products
UBOS Uganda Bureau of Statistics
URA Uganda Revenue Authority
VIP Very Important Person

For formatting reasons, accent marks and foreign characters are not always used in the
text.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Table 8: Definitions of Wet and Dry Product Categories
Term Definition
Wet Shampoos, conditioners, relaxers, treatment, spray, cream
Relaxers Products that straighten hair
Hair food Provides moisture and nutrients to the hair
Colourants Products that colour the hair
Liquids Shampoo/conditioner
Dry Hair extensions, weaves, wigs
Hair extensions Clip on fake or real hair
Weaves Fake or real hair that is weaved/sewn into the hair
Wigs Fake or real hairpiece that covers the whole head
Other Includes products such as accessories, decorations, styling
tools
The table above lists the products, by category, and provides a definition for each.

Table 9: Relaxer Product Strength and Formulations


Strength and End Client Formulation
Super, regular, mild, regular Sodium
Regular No ammonia oxide or peroxide
Super, Regular Lithium
Adult, Children Calcium

The table above sets out details of relaxer formulations, strengths and users. The regular
(medium) strength relaxers do not contain ammonia oxide or peroxide. Experts report
that the main ingredient in consumer relaxers is calcium hydroxide, which works more
slowly than ingredients in salon (professional) lines. This is to reduce the possibility of
damage to the hair or scalp. The mild formulations are mainly for children.

10.2 Extensions and Related

Extensions, also called hairpieces, are available in (i) bulk hair, that is, loose hair tied in
a bundle ready for use, and in (ii) wefts, that is, hairpieces tied with threads by hand or
by machine, or bonded (with hair glue) into a track ready for the weaving process.

Medium (not fine or heavy) machine wefted extensions account for most of the market.

Detailed descriptions of the many types of hairpieces can be found under the AQs on
the websites of suppliers. (See among many others:

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
www.perfectlocks.com;www.lfhair.com/html/hair_extension_techniques.php; and
www.buzzle.com/articles/hair-weaving-techniques.html.)

Many different types of hair are used in extensions and other styling:
• Synthetic hair e.g. Yaki bulk braid, a straight braiding fibre made from a
synthetic man-made material.
• Natural or human hair e.g. Remy hair, Indian Temple Hair. Indian Temple hair is
in virgin condition, that is it is unprocessed by chemical treatments. It is similar
in structure to Caucasian hair.

Remy hair refers to the highest-grade human hair that comes from one individual. The
hair is sectioned, and falls into its natural growing pattern. Then the hair is cut and
hand sewn so that the cuticle layers are in the natural direction from root to end. This
reduces or eliminates matting and tangling.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
ANNEX I: TIPS ON HOW TO START MAKING MONEY FROM HAIR
EXTENSION BUSINESS

 Take some time to learn about weaving and other applications of human hair. This
way you can understand which hair is best for different types of extensions, braids
and weaves.
 Do a general market survey for the prices and size of your market. For instance, how
much is a carton of expression attachment?
 Look for a supplier with good price, there are lots of weave-on and expression
attachment distributors in Uganda.
 You may also shop around online using online stores like Amazon, Alibaba and
Aliexpress.
 Be ready to travel to China or India so you can negotiate for a better price on bulk
purchases.
 When you buy in bulk, you get good deals.
 Import your goods into the country and do the necessary customs clearing.
 Find a shop or warehouse, strategically located where you resell to wholesale
distributors, retailers and end-users at a good profit margin.
 Nobody gets to know about a business that is not promoted. So, adopt various
strategies in order to spread word about your hair-selling business.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
ANNEX II: INDICATIVE KAMPALA MARKET PRICE LISTS

Prices for Weaves

The following are the typical Kampala downtown market prices for Brazilian
Weaves as well as Peruvian, Indian and Malaysian weaves. Our weaves prices are the
same regardless of hair colour, or curl type. Each piece or bundle weighs approximately
100g. The prices below are per bundle and you need approximately 3 bundles to
achieve a full look. Please note that short weaves are less expensive than longer
weaves. However prices for curly weaves and straight weaves are the same.

Length Price per Bundle


10 inches UGX 290,000
12 inches UGX 320,000
14 inches UGX 350,000
16 inches UGX 375,000
18 inches UGX 400,000
20 inches UGX 430,000
22 inches UGX 460,000
24 inches UGX 490,000
26 inches UGX 520,000

Prices for Brazilian Knots


The following are the typical Kampala downtown market prices for Volure's Brazilian
Knots (also known as Bulk Hair Extensions). Each piece or bundle weighs
approximately 100g, and approximately 3 bundles are required for a full look. The
prices below are for one bundle.

Length Price per Bundle


10 inches UGX 280,000
12 inches UGX 310,000
14 inches UGX 330,000
16 inches UGX 360,000
18 inches UGX 390,000
20 inches UGX 420,000
22 inches UGX 445,000
24 inches UGX 470,000
26 inches UGX 500,000
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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Prices for Lace Closures
The following table lists prices for Lace Top Lace Closures, Lace Top Three Part
Closures, Silk Top Lace Closures, and Lace Top Lace Frontals. Prices do not depend on
colour, curl type or hair type. Prices depend only on length.

Lace Top Three Part


Length Lace Frontal
Closure Closure
10 inch UGX 360,000 UGX 360,000 UGX 500,000
12 inch UGX 390,000 UGX 390,000 UGX 560,000
14 inch UGX 420,000 UGX 420,000 UGX 610,000
16 inch UGX 445,000 UGX 445,000 UGX 670,000
18 inch UGX 470,000 UGX 470,000 UGX 720,000
20 inch UGX 500,000 UGX 500,000 UGX 780,000
22 inch UGX 530,000 UGX 530,000 UGX 835,000

Prices for Clip In Hair Extensions


Clip In Hair Extensions are usually sold in sets of 160g each. Clip Ins are thick and are a
great choice when you want to add both length and volume. These Clip In Hair
Extensions are meant for those with medium to thick hair, and is not ideally suited if
you have fine hair. All our Clip In sets come in 10 weft pieces and includes the
following: 2 x 20cm weft piece, each with 4 clips | 2 x 15cm weft, each with 3 clips | 2 x
10cm weft piece, each with 2 clips | 4 x 2.5cm piece, each with 1 clip. Together, the 10
weft pieces of our Clip In Hair Extensions are designed to cover your entire head. Only
one set is required. All our Clip In Sets are 20 inches in length, and prices vary based on
colour.

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UGANDA MARKET ANALYSIS FOR WOMEN’S DRY HAIR PRODUCTS
Colour Price per 160g Set
Jet Black - #1 UGX 585,000
Natural Black - #1B UGX 585,000
Dark Brown - #2 UGX 585,000
Chocolate Brown - #4 UGX 585,000
Chestnut Brown - #6 UGX 610,000
Strawberry Blonde - #16 UGX 610,000
Auburn - #33 UGX 610,000
Toffee - #20 UGX 720,000
Honey Blonde - #144 UGX 720,000
Ash Blonde - #60 UGX 720,000
Bleach Blonde - #613 UGX 720,000
Dirty Blonde - #120 UGX 720,000
Silver UGX 720,000
Chestnut Ombre - #T2C6 UGX 780,000
Blonde Ombre - #T2/C20 UGX 780,000
Teal Ombre - #T1B/Teal UGX 780,000
Pink Ombre - #T613/Pink UGX 780,000

Prices for Keratin Bonds, Micro Ring Hair Extensions and Clip in Ponytails
Colour Keratin Hair Micro Ring Clip In Ponytail
Natural Black UGX 530,000 UGX 530,000 UGX 530,000
Brown UGX 530,000 UGX 530,000 UGX 530,000
Blonde UGX 530,000 UGX 530,000 UGX 530,000

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