Ron Gluckman for The New York TimesThe Arunji founder Janice Wilson showing a hair extension that is ready to ship from Phnom Penh, Cambodia.
PHNOM PENH, Cambodia — For an Internet start-up, Arjuni faces more challenges than usual.
The
e-commerce site that sells hair extensions operates out of a five-story
building here that lacks elevators and, sometimes, power. Employees
typically have to travel to remote villages by motorbike or foot to pick
up the goods that Arjuni sells. And the office floor is cluttered with
piles of hair strands instead of computers.
But like many new ventures, Arjuni is harnessing the latest Internet tools like Twitter and social media to build a loyal customer base.
In just two years, the company, founded by Janice Wilson, has grown
from a handful of employees to 80, and it now generates more than $1
million in revenue. The start-up is also slowly gaining market share
from the industry’s dominant players in India and China, as well as
retailers in the United States and Europe.
“We not only buy and
collect the hair ourselves, but sell it directly to our customers. This
makes us stand out,” Ms. Wilson said. “We’re small, but considered one
of the top brands.”
Ron Gluckman for The New York TimesOn
the rooftop of Arjuni, a hair company in Cambodia, workers begin
sorting the natural-grown hair according to length and quality.
While hair extensions have been around for decades, they became a fashion craze in recent years, when stars like Paris Hilton
and Britney Spears started using them to change their looks. A large
proportion of Arjuni customers, like Ms. Wilson, are African-Americans
seeking fuller styles for their tresses.
India has long provided
much of the world’s natural hair, sold to wholesalers mainly in China,
which in turn marketed their products to retailers in Europe and the
United States. But Ms. Wilson found that Cambodians have similar hair
quality, long with cuticles in alignment.
“Probably 99 percent of
the world’s hair comes from India. Nobody had thought of Cambodia,” said
Ms. Wilson, 39, straddling piles of hair on the floor.
It is a small but potentially profitable niche. The hair extensions business generates annual revenue of $250 million.
Ms.
Wilson said it was important to her to have a business serve a social
purpose. Many of Arjuni’s employees formerly worked in Cambodia’s
notorious sex trade.
That effort helped attract seed capital from a
Japanese investment fund, Arun, formed in 2009 by Satoko Kono to help
social enterprises in emerging nations. “We like how Arjuni is employing
women, and helping the needy,” said Ms. Kono, who spent a decade with
development organizations in Cambodia.
Additional money came from the Cambodian Export Market Access Fund, which is a World Bank-financed project that helps companies trying to develop exports. The rest came from her savings, friends and family.
A lawyer by training, Ms. Wilson has built her business by making customers feel engaged in the product via the Internet.
Customers eagerly describe their orders on home videos
that they upload on YouTube, with segments on topics like hair design,
delivery and grooming. Clients are encouraged to send in pictures of
starlets they want to emulate, like Catherine Zeta-Jones or Beyoncé. Arjuni also floods Facebook with testimonials and promotions.
“Our
clients are fanatical about hair,” said Tiyana Peters, who oversees
social media for Arjuni. “We get everything from wedding photos
afterward to details on how the boyfriends react.”
By dealing
direct with customers, Arjuni eliminates the added cost of working
through another retailer or site. Extensions can cost thousands of
dollars, but typically average around $500.
The Internet has
helped with damage control, as well. After rumors spread online that
Arjuni was stealing hair or forcing women to sell it, the company began
regularly posting more information on its operations on networking
sites.
“This was totally untrue. We buy the hair at fair prices,
and tried to explain it, but there isn’t much you can do,” Ms. Wilson
said. “Our company grew up in the age of social media,” she said.
“Social media is huge, and has helped us, but these accusations really
stung.”
Her idea for the start-up was an evolution of sorts. Ms.
Wilson, originally from Green Bay, Wis., was on vacation in Cambodia
four years ago, she began thinking about opportunities to start a
business here.
Cambodia was in the midst of an economic boom and
had the fastest-growing economy in Asia, after China, for several years
running. One of the hottest sectors was real estate. Ms. Wilson, who was
working for a real estate firm in Colorado, decided to move to
Cambodia, and with local partners, planned a development near the
temples of Angkor, the country’s top tourist attraction.
When
Cambodia’s property market suffered along with the global economy, she
faced a grim challenge. “I either had to give up and go back to America,
or find something else to do,” she recalled.
The collapse of
Cambodia’s textile industry largely as a result of cheap competition
from China led to her idea. Cambodian workers with sewing skills were
suddenly unemployed, and nobody had looked at Cambodian hair as a
marketable material before.
“I was thinking, what is recession-proof?” Ms. Wilson recalled. The answer: “vanity.”
The
best — and most expensive — hair extensions are made from natural human
hair, which is cut, cleaned and sewn into individual pieces. “It was
low-tech, they just needed to learn how to make them, and we just needed
sewing machines. We could use the skills already here,” she said.
The
business was also a way to help workers develop marketable skills. Ms.
Wilson now provides employees with free English, computer and math
classes. A third of workers come from troubled situations like sex
trafficking or spousal abuse. “But we run everything as a business,” Ms.
Wilson said.
Ms. Wilson acknowledged that she and her staff
members were extremely ambitious at the outset, “trying to do everything
at once — collection, fabrication and distribution.” But they have been
able to keep up the frenzied pace as the company grew.
“It’s definitely been difficult to scale up,” Ms. Wilson said. “But it does make us better quality.”
This
spring, Arjuni added yet another facet to its operation — a series of
in-person events in the United States called Halo, where her staff could
meet and help groom customers.
“Do I feel I have aged a lot? Definitely,” Ms. Wilson said. “But I love being an entrepreneur. I love the challenges.”
“When
I worked in a law office, I was bored out of my mind,” she added. “When
you have this entrepreneurial spirit, you just have to do it.”
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