Why Do Koreans Own the Black Beauty Supply Business?

R. Asmerom, Atlanta Post, September 27, 2010

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But what can explain the seemingly random attraction of Black hair to Korean entrepreneurs? Is it that they love Black hair so much? Was there a plan amongst the first wave of Korean immigrants to hone in on the black hair care industry and dominate the beauty supply store market? From a business perspective, it was no coincidence.

The wig business and the explosion of the wig business in South Korea in the 1960s is instrumental to understanding the Korean ownership of beauty supply stores. According to the book “On My Own: Korean Businesses and Race Relations in America”, the rise of the YH Trade wig manufacturing company was significant. Founder Yung Ho Chang, conceived the idea of the company while working as the vice-director of Korean Trade Promotion Corporation in the U.S. Between 1965 and 1978, his company exported $100 million worth of wigs.

The wig business was doing so well, especially amongst African-American consumers that the Korean Wig Merchants pushed to corner the market. “In 1965, the Korean Wig merchants joined together and convinced the Korean government to outlaw the export of raw hair,” said Aron Ranen, a filmmaker who has documented the marginalization of African-American entrepreneurs in the hair care industry. “[This ban] made it so that one can only buy the pre-made wigs and extensions.” In other words, Korean hair could only be manufactured in Korea. “Six months later, the United States government created a ban on any wig that contains hair from China,” effectively putting South Korea in prime position to exploit the market.

The business structure helped set up many Korean entrepreneurs in the sale of wigs and over the past five decades, wig stores have evolved to become full fledged beauty supply stores where hair for weaves and extensions represent the top selling products. Since then, it’s been a chain reaction as one store beget another; family members and employees of one store owner duplicated the business. According to said Dr. Kyeyoung Park, associate professor of anthropology and Asian American Studies at UCLA, competition also played a role in the proliferation. “Korean immigrants are more concerned with peer competition,” she said. “If one is running a business so well, then another Korean will open up a similar business very quickly.”

Today, there are over 9,000 Korean-owned beauty supply stores serving a billion dollar market for Black hair. Between manufacturing, distributing and selling these hair care products, Korean entrepreneurs appear to control all major components. {snip}

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According Ranin, there are only four central distributors serving beauty supply stores in the country and these Korean owned distributors discriminate against Black store owners in order to maintain their monopoly in the market. Ranin interviewed Lucky White, the owner of Kizure Ironworks which specializes in making styling tools like curling irons, for his 2006 documentary. Ms. White claimed that distributors told her that her products were no longer in demand as an excuse to turn away her products in favor of knock-offs produced by Asian companies.

Devin Robinson, an economics professor and author of “How to Become a Successful Beauty Supply Store Owner”, organized a boycott last November against Non- Black Owned Beauty Supply stores. “The problem is with the distributors.” he has stated. “Distributors are mainly Non-Blacks and they handpick who they will distribute products to. This oftentimes leaves aspiring black owners disenfranchised.”

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