There's a big business behind the wig that Meng Meiqi dumped.
According to the data of the National Health Commission, the number of people with hair loss has risen sharply, and the number has exceeded 250 million, that is, an average of 1 out of every 6 people have hair loss. And the final destination of hair loss is baldness.
Whether in order to seek beauty, or in order to cover bald, concealer, in recent years, like the maintenance and hair transplant industry, wigs have also ushered in "bald" business opportunities, and even become a fashion item in the eyes of many consumers.
On Taobao, more than 20,000 pieces of wig pads and fake bangs are sold every month. Data from a cross-border platform also shows that a wig can be sold every two seconds, with an annual turnover of 1.5 billion yuan. Some professionals said that the domestic wig industry annual sales of 60 billion yuan, practitioners more than 1 million people.
The arrival of the epidemic, but also let the wig product supply and demand side has changed, so that the "head business" suddenly hot up.
Some wig manufacturers said that their inventory is now seriously insufficient, and dealers have come specifically to ask for goods but can only return empty-handed. Because of the loss of workers, the production end can not keep up, he did not dare to sell.
In addition, although a large number of offline stores of wigs were closed during the epidemic, they also promoted online purchases, but some companies' sales increased by 80%.
The online craze is not unique, with sales of wigs on AliExpress, known as the "international version of Taobao", also soaring. In April, wig sales on AliExpress in major markets such as Europe and the United States increased by 100%. In May, compared with March, the number of wig buyers worldwide increased by 40%.
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In addition to the changes brought about by the epidemic, in fact, in recent years, the wig industry is rapidly attracting more players into the circle. According to data from the App, there are nearly 33,000 businesses in China that contain "wigs and hair products." In 2016, the registered growth rate of such enterprises in China reached 41.79%, the highest growth rate in the past decade. In 2019, a total of more than 8,400 wig-related companies were registered in China, the highest increase in nearly a decade and an increase of 47% year-on-year.
However, behind the hot industry, the problem always exists. Like many foreign trade concentrated industries in China, brand OEM and OEM production is still the core of the business of these wig companies. In addition, there are many domestic wig brands and large competition, and some companies have to cut prices to win market share in order to obtain living space, which directly leads to a decline in wig industry profits and even vicious competition.
However, in recent years, with the influx of young entrepreneurs into the wig industry, their focus on branding and marketing has also brought changes to the industry. In the view of newly entered practitioners, in the traditional industry of wigs, playing cheaper than who has long been impossible, branding, high-end, differentiation and other means or ways to overtake.
Note: The content of this article is mainly from interviews with journalists and public information on the Internet. The arguments are inevitably biased and there is no deliberate misleading.
Top business is booming under the epidemic
After sending off the third wave of visitors today, Lu Xiao, general manager of a wig production company in Xuchang, was exhausted and collapsed on the sofa. Despite the burning pain in his throat, he would not get up to go three meters away to get a glass of water.
Recently, the stock of wigs in Lu Xiao Company is relatively tight, and many commonly used specifications of products have been out of stock, resulting in the speed of delivery and delivery cycle have been affected. "Many dealers came to our company from other places, just to get the goods, but they can only run for nothing."
In his view, the reason for this phenomenon is simple: the supply and demand side has changed.
On the supply side, during the new coronavirus epidemic this year, the wig industry has also suffered a great impact, and in the early stages of the outbreak, various factories were difficult to resume work.
Lu Xiao said that during the worst of the epidemic, he had to let employees take leave, and the turnover rate of employees was also high, the highest was more than 10%, so he also implemented financial subsidies during the epidemic period, half-work and half-training to ensure that employees did not lose. "At the end of the epidemic, there will still be a shortage of workers, so recruiting new employees will continue to be an important job for the company."
Some professionals said that if we want to maintain the stable operation of the wig industry with more than 1 million practitioners and annual sales of 60 billion yuan, the employment gap is as high as 100,000 people.
In addition to the domestic, affected by the new coronavirus epidemic, some overseas production links can not resume production, which also leads to the domestic wig industry facing the dilemma of industrial chain disruption.
At present, there are two raw materials for wigs on the market, chemical fiber and real hair. Although the price of real hair is high at this stage, it is still difficult to be replaced. For practitioners, domestic hair raw materials have been unable to meet the demand of the wig industry, and fewer and fewer people are now willing to sell hair. Therefore, many wig production companies mainly source their hair from neighboring countries, such as India, Bangladesh, Myanmar, Pakistan, and semi-processing in the local area.
However, in the case of insufficient supply, on the demand side, the orders received by Lu Xiao in recent months have not decreased but increased. During the epidemic, Lu Xiao even thought that the company's business in 2020 was "finished", but the reality gave him a big surprise: in the recent period of time, orders doubled compared with 2019, and overseas orders increased significantly.
Lu Xiao himself also analyzed the reason, "It may be that they also need to tweet and Instagram at home, but also to communicate through social media and relieve loneliness, so they not only buy wigs, but also buy more."
On the one hand, there is a steady stream of orders, and on the other hand, production lines that cannot be started because the industrial chain is incomplete. "Because the production side can't keep up, they don't dare to sell." Lu Xiao helplessly said.
A wide variety of wig needs
In fact, the appeal of wigs has always existed, but with the growth of user consumer demand and changes in habits, bald, beauty, concealer, different user groups began to differ in the appeal of wigs.
According to the survey of hair loss people released by the Health Commission in 2019, the number of people with hair loss in China has risen sharply in recent years, and the number has exceeded 250 million, that is, on average, 1 out of every 6 people have hair loss.
Anti-stripping products, hair transplants, wigs and other industries have ushered in huge opportunities for development.
In 2019, the majority of young and middle-aged people not only became the main force generating GDP. It has also become the backbone of hair loss. A "hair loss population survey" shows that China's hair loss population is mainly between 20 and 40 years old, and the fastest development is around 30 years old. They call themselves Buddhas, pursue slashes, retweet koi, but they are no longer calm when bald comes.
At first, the post-90s began to buy a large number of anti-stripping shampoo, the year before the hair growth equipment became their new favorite, and last year wigs became the keyword of the post-90s search. On Double 11 in 2019, the report card of the wig was even hot.
And today's wig products seem to have become a "fashion".
Lu Xiao found that wigs are also the standard for many fashion girls. In order to look rich on top of their heads, girls are buying fake bangs. On Taobao, a wig piece can sell 20,000 pieces a month.
In China, many stars and fashion bloggers will also use wig sets or wig pieces to enrich their styling.
In fact, whether it is domestic hair loss groups or beautiful girls, they are not mainstream consumers of wigs. From a global point of view, the real consumer of wigs is the main black women, they have also become the main export users of domestic enterprises.
Wig practitioner Dai Rui introduced that due to black physiological reasons, the hair is naturally curly, close to the scalp, hard texture, difficult to comb and shape, and slow growth, if only from the natural hairstyle is difficult to distinguish between men and women, seriously affecting black women's pursuit of beauty. So black people need hair products most urgently. "Black women buy wigs the same way we buy clothes. It's just-in-need, fast-moving consumer goods."
At present, the domestic wig industry exports the largest region is Africa, which exports to South Africa and Nigeria more. The wigs produced by Dai Rui's company are no exception, all of which are exported and not sold internally.
According to previous reports, many normal office workers in the area will own at least 3-4 wigs per person. Even girls who grow up in slums spend a third of their monthly income on wigs.
Number one in overseas transactions
Dai Rui and Lu Xiao are in Xuchang, a city known as the "wig capital", where there are more than 5,000 wig-related businesses, and it is said that one in three people in Xuchang can relate to wigs.
In the wig street of Xuchang, both sides of the road are wig production enterprises. Almost without exception, these enterprises are hanging at the door of the recruitment of inspiration, but now the recruitment of work is more detailed, such as packing workers, Qu workers, packers and so on.
With the east wind of e-commerce, Xu Chang has now sold wigs all over the world.
According to the South China Morning Post data show that in 2018, China is the world's largest wig manufacturer and exporter, with export sales of $3.6 billion, accounting for nearly 70-80% of the global market, and Xuchang's export sales reached 1 billion yuan.
On AliExpress, Alibaba's cross-border retail e-commerce platform, a wig is sold every two seconds on average, with an annual turnover of 1.5 billion yuan, ranking first in overseas transactions.
Africa is a major battleground for Dai Rui, but the company has also been hit hard by the outbreak. He said that affected by the epidemic, the overall sales of wigs fell by about 40%, and mainly concentrated in Africa. "Because the epidemic in Africa is more serious and the local epidemic prevention measures are relatively poor, our business in Africa is basically at a standstill." On the contrary, sales in Europe and the United States increased by 80 percent due to the closure of local offline stores, which promoted online purchases."
This phenomenon is not unique, since the outbreak of the epidemic, AliExpress wig sales have also soared. "In April, the turnover of wigs on AliExpress in major markets such as Europe and the United States increased by 100%. The number of wig buyers sold worldwide increased by 40% in May compared to March." Ni Qianqing, head of the fake hair industry, said earlier.
In the case of the overall decline in demand, many enterprises have begun to expand new traffic channels, from the direction of efficient promotion, improve the conversion rate and cultivate long-term customers, such as the use of social media, network anchors and other means to enhance exposure and transformation.
"It's like livestreaming goods in China." On his Instagram and Youtube accounts, Derek posts wig styles, wearing videos, and hair-making illustrations, as well as finding black influencers to make videos and take photos.
To sell products on e-commerce platforms, you need to pay commission. Darry said that Amazon's commission rate is 20 percent, AliExpress is 15 percent. To this end, some wig companies have also begun to explore more new sales models and channels, and to establish their own brands in overseas markets, rather than just doing OEM, relying on overseas orders.
Some wig brands with budgets will place Google bidding ads to appear on the first page of wig-related search results, directing consumers to their official websites and guiding consumers to place orders directly.
New ideas for new entrants
The wig industry in Xuchang, Henan Province is the same as many foreign trade concentrated industries in China, and brand OEM and OEM production is the core of the business.
"Although this model is low profit, but the advantage is that the business model is relatively simple, usually the customer pays 30 percent deposit, the factory will start production." Lu Xiao said.
In the entire OEM order, the role of the factory is similar to the porter, the human hair raw materials moved from abroad to China, after the company's simple processing of bundling, processing into semi-finished products of "file hair", and according to the customer's requirements moved to Europe and the United States, "in the middle, the profit point is not high, but earn a little processing fees."
Different from the past business model, today, many young post-80s and post-90s entrepreneurs quietly walk to the front of the industry with the help of cross-border e-commerce. This new force not only has a strong impact on traditional foundry leaders such as Rebecca and Ruimei real hair, but more importantly, they have given the wig industry brand awareness and considerable profits.
"Also, the wig industry has always been very competitive, and this will be a new game changer." The post-90s wig industry entrepreneur Xavier said.
The data show that there are nearly 33,000 wig-related enterprises in China whose business scope includes "wigs and hair products" and whose status is in the business, existing, moving in and moving out.
In the past ten years, the registration increment of wig related enterprises in China (all enterprise status) has fluctuated and increased. In 2016, the registered growth rate of such enterprises in China reached 41.79%, the highest growth rate in the past decade. In 2019, a total of more than 8,400 wig-related companies were registered in China, the highest increase in nearly a decade and an increase of 47% year-on-year.
In the face of domestic wig brands, competition, some companies in order to obtain living space had to reduce sales to win market share, which directly led to a decline in domestic wig industry profits, in the long run, this is harmful to the development of domestic wig industry without profit.
In Xavier's view, "the traditional way of playing cheaper than anyone is no longer viable." He chose to go in the opposite direction, using wigs as luxury goods and focusing on creating a high-end wig brand.
He introduced that for the American market, the African-American population is large, the number of potential consumers of African American women is large, and the consumption power is stronger than in other regions, and after field research, local customers are more approved of high-end real hair products. The European male population is prone to hair loss, the need to use wig blocks, wig sets, these products are relatively high prices, and the export of finished products is also higher. A high-end wig can even cost as much as a Louis Vuitton bag.
'I have experienced hair loss myself and many of my friends. Wigs don't solve the problem, but they provide the easiest way to hide it.' In Xavier's view, with the further maturity of wig technology, the future is likely to form opposition to the hair growth and hair transplant market.
(At the request of the interviewees, all names in this article are pseudonyms.)