How the pandemic has the global wig business hanging by a thread
- From India to China, North Korea and the United States, buyers and sellers of hair products are grappling with supply disruptions thrown up by the coronavirus
- Shortages are driving up costs that the smallest businesses are least able to afford
American hair salon owner Nik Smith-Serrano has been desperate for any signs that a border half a world away will reopen soon.
The trade flow has dried up, and prices have soared, and many worry that a devastating second wave of pandemic in India, the major source of human hair used in wigs and extensions, could further drive supply-chain woes.
“When the borders were closed in January last year, my vendors [in China] were telling me to stock as much as you can right now,” Smith-Serrano said.
“They said at that time that March could be better, and then maybe by August things might be back to normal, and that was in 2020 and we are still at the same position as the cost is going up.”
The bulk of the trade that it does do – roughly 90 per cent – is with China, and one of the thriving categories has been in hair and wigs, which are not banned under the sanctions.
China is the world’s largest wig export, accounting for 70 per cent of the global supply, but it relies heavily on labour in North Korea, where Chinese factories have long outsourced production to reduce costs, industry insiders say.
In wig processing factories in North Korea, well-trained workers, paid only half – or even less – that of their Chinese counterparts, skilfully knot each strand of hair into the wig cap by hand, making a premium wig that gives a more natural look and fit.
These semi-finished wigs are then sent back to China, where they are further processed and packed before being shipped to the rest of the world, particularly the US, which accounts for over 40 per cent of global demand.
“One of the biggest sellers in the hair industry are wigs as that goes for just people who like to use them, but also especially in the States for not just cosmetic purposes, but practical purposes to cancer patients,” Smith-Serrano said.
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Xuchang city: China’s wig capital
Before the pandemic, Chinese companies would send tonnes of human hair to North Korea each month, according to Chinese data. In January last year when the coronavirus outbreak started, 14 million yuan (US$2.17 million) worth of “human hair, wool and other textile prepared for use in making wigs” was shipped to North Korea but a month later, that total had dropped to 452,000 yuan. Since then no trade in human hair between the two countries has been recorded.
Chinese companies have looked for alternatives, such as employing local workers to fill the gap, but Smith-Serrano said prices continued to keep going up “almost every week”. The knotting on the North Korean product also appeared to be better too, she said.
A Chinese wig vendor in Shandong province confirmed the cost increase, saying a wig hand-knotted by Chinese workers was 30 per cent more expensive “but the quality is not that good”.
According to Chinese magazine People, the wig industry in China was so desperate for skilled workers that they launched a national campaign – all to no avail.
“Knotting is like sowing seeds, it depends not only on the spacing of the rows but there are various techniques such as single layer and progressive stitching, which cannot be learned in a short time,” the report said.
Then there is added cost of the disruptions to imports of natural hair, mostly from India and Myanmar, which have been largely suspended since last year.
Human hair has become such a coveted commodity in China that in March, police in the southwestern province of Yunnan said they arrested 11 cross-border gangs and arrested 48 people for smuggling 1.1 billion yuan worth of human hair from India, Pakistan and Myanmar. According to police, human hair that once sold for 220 yuan each kilogram could now fetch more than four times that amount in China.
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Smith-Serrano said the supply-chain disruptions were taking a heavy toll on small businesses like hers that were less able to absorb the higher costs or pass them along to customers.
Since the pandemic, shipping times have lengthened and her revenue is down by about 20 per cent.
“It’s very bad, especially when you’re just so dependent on China, that’s kind of just how this business is run, no matter if you have your own little factory or conglomerate-type situation, you’re just so dependent on it. And it’s when the source dries up, it dries up,” she said.
Her biggest concern, however, is that if the China-North Korea border restrictions are prolonged, her store, now running out of stock for the premium lace wig and hair extensions, will eventually lose her edge.
“I did look into maybe circumventing China, going to India or Brazil or the Philippines. However, the level of technology, the latest technology in hair extensions which we have been known for, they just didn’t have it,” she said.
Additional reporting by Xiaoxiao Yang
