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Why do Korean beauty supply stores succeed while Black ones struggle?

March 9, 2012

black strugglerFor the past decade or so, there has been a lot of anger and discussion around the ethnic beauty supply industry. Up until the early 1980’s Blacks dominated the ownership of these retail outlets. It only made sense, seeing that this industry is largely carried by Black consumers. Asians (and Middle Easterners) have burst onto the scene as the dominant force. They have found an industry that has almost no barrier(s) of entry, making their migration to America less economically painful. They set up shop in the black community, and in a few short years, a family, who was once, less fortunate than an urban Black family, surpasses them politically and economically.

But, how can this be happening? What is it that Koreans do, that Blacks aren’t doing? Are they playing fair? I recently had a discussion with one of my business class students. I explained to them that the business field is very unique. Unlike becoming a doctor, scientist, engineer, or lawyer, though business school is crucially important to their success, it doesn’t guarantee it. It’s not like one of those fields where once you pass an exam or get a certification, you can slide into success or prestige. In fact, there are individuals who flunk out of college only to find themselves earning millions. You can find PhDs working for GEDs. Of course this isn’t to discourage anyone from pursuing a higher learning education. My example is used to illustrate a very important point; success in business comes from someplace usually untaught and untapped.

Yes, there is a little strategy involved but to push pass obstacles there must be more than knowing theories and terms. There must be collective unity, resilience, discipline, consistence, persistence, risk-taking, fearlessness and assertion. Anyone who has made a living in business knows this. I’ve not only owned a chain of stores, I travel the country opening Black stores and helping existing ones to become more competitive. I know the industry well and have found observations of my own.

Here are five key reasons why the Black community has lost its footing in the industry:
• Dominant Suppliers – Once Asians began domination at the retail level, they invested in becoming distributors. This gave them better control over the supply chain and helped to secure their “friends” positions as the better and more reliable retailers.
• Cultural Disconnect – Here’s where it gets tricky. Because the income potential of these stores are often overlooked, Black retailers are often not the corporate or academically astute type. It is often those who were rejected by Corporate America, for one reason or the other, so they decide to pursue entrepreneurship. This cadre of Blacks often have little cultural diversity training or awareness, which rubs the Korean distributors the wrong way.
• Entrepreneur Minds – We grow up with the desire to make money, Asians grow up with the desire to make money in business. Dr. Claude Anderson stated, “Over 60% of Black college graduates work in Government, while less than 10% work as entrepreneurs.” This shows that those of us with the most potential trade our intellect for immediate security.
• Risk-Takers – Whether we want to accept it or not, immigrants are risk-takers. Anyone that leaves the familiarity of their country with little knowledge of the American way or the American language, are willing to take risks. This trait is very valuable for entrepreneurship success.
• No Safety Net – When you have no choice, you perform! They often have no credit, little formal education, no access to government benefits, no social security, etc. and living in a foreign land, so they live on cash, indulge little in social activities, and build wealth.

There are harsh truths to why we are no longer circulating billions of dollars in our community through beauty store ownership; some that are tough for us to accept. Koreans, (Asians) nor Arabs, took the industry away from Blacks; who dominated this retail segment from the mid 20th century to the early 1980’s. They simply entered into the competition. Because their cultural dynamics make for better entrepreneurship, they easily changed the face of the industry.

The Catch 22 – Kinship Kills
We, as Blacks, expect kinship benefits from Black business owners but we don’t expect the same from non-black business owners. We assume once a business is opened, the owner has arrived at success and must spread the wealth. This puts added pressures to a new Black entrepreneur who is trying to overcome the basic initial trappings in business. They are expected to issue local sponsorships, offer discounts, hire friends, and extend credit to family as soon as their doors open. If they decline to do any of this, they are “black listed” and labeled as selling out, self-righteous or as one to not support. They do not put these same expectations on a non-black owner, which frees them from this added expectation, allowing them to focus all of their energy on building their businesses and not on a journey of acceptance.

At the end of the day, success in an industry that rides on the back of Blacks isn’t utterly difficult. There are simply portions of the Black American culture that is not in congruency of business interests. As upset as we may be at non-black owned businesses within our communities, we must take inventory of our collective skillset and put those to work. We are not fools. We are a very resilient group! We must consciously think about where we are spending our money and if we can temporarily do without. We must stop catching pneumonia when America catches a cold. Without thinking this way won’t stop us from remaining popular, but it sure will hinder us from becoming powerful!

Learn more at http://www.beautysupplyinstitute.com

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9 Comments leave one →
  1. March 9, 2012 1:22 pm

    I also believe that there is a disconnect with the community. Black business owners will need to have a plan to not only get together and have these black business owners network clubs (which comes off as elitist, at least in my area) but they need to devise a plan to connect with the community and show how they plan to give back and invest. Many black business owners open up a business and because they are black they expect black people to support. In theory you would think that it should be the case but in reality it isn’t. Nothing is more insulting than a black person becoming a business owner and give off a vibe that I am now better than you, and believe me it happens. 1. A committee needs to e developed that would entail an information distribution system that regularly communicates the reality or “state of the local black community”, through the use of local black newspapers. This committee would approach all of these non black businesses that serve the black community and diplomatically ask them to contribute to a fund that would help to create more businesses, employ black people and offer educational opportunities. I mean after all they are catering to black people. When they refuse put them on blast in the black newspaper, poster board advertisements letting the community know that they are pimping the community. 2. Black businesses will need to sponsor community block parties (or other events), get to know the people in the community (yes you will always have those who want the “hook up”) but they need to befriend the masses. Black people know it takes money to stay in business. 3. Get the community to sign a pledge that they will support as much as possible the black businesses who are supporting them. 4 Become more savvy in marketing or even collectively hire a black marketing firm. Black people have been in this mindset for so long that it has become an everyday expectation, but we need to collectively change those mindsets and actively go after the lost sheep.

    • March 10, 2012 2:48 am

      I fully see Mr. Bridges position; I too feel there is a need for a collective voice concerning black business. Not an elite list thing either!

      There needs to be a check and balance; On both sides of the counter. Everything from incorporating social responsibility; to customer service and consumer loyalty.

      I’m seriously considering launching a grassroots effort in this direction in my own community. I can say it will more than likely be a long walk around the park, my business is very socially responsible by the Grace of God and the people are slowly grasping the concept; if at all.

      There is no other voice just the actions of the business. Most black owned business owners are on their own and are totally unaware of what to expect. So, to think if my business gives back to the black community, I will automatically have the full support of the black community sorry, you will not, it will take time and an education to the masses and this is where a collective voice could lend a hand.

  2. March 9, 2012 1:53 pm

    What is said in this article makes perfect sense to rectify our staggering growth and economically powerlessness as a race. With that said, it is mind boggling to me why we ( black people) are not there yet.

    We need both loyal consumers of the black race and more importantly we need smart, intuitive business owners that know how business is run and take risk. Great business planning, knowing when to make moves, when to hold back and good calculated decisions is part of taking that business to the next level. Making money in business is also about reputation and repeat consumers. Growing more black business owners is also about supporting our business and “keeping it the house” so to speak.

    A friend of mine pointed out a book, ” Our Black Year”, written by Maggie Anderson, whom also was mentioned in Professor Devin Robinson book, ” Rebuilding The Black Infrastructure”. Her book is mainly about discovery her husband and herself experience when they took a year to spend their money on black on business. The journey they took was taken from the a research project developed by the Andersons called , The Empowerment Experiment. There were some bumps for them but some good experiences as well and provide valuable insights on breaking barriers between black businesses and consumers. Professor Robinson book provides a blueprint in how the infrastructure was broken down and how it can be repaired. There are many other great insights he points out of black history in business, where the strength of black business leaders come from and who it is and why others should not stand it their way if we want to progress in our economical growth. If you are reading his articles every time he put one out, and haven’t read this book, you have to read it. Its a MUST read.

    I am in the middle of building my business back up after a fall. But I mentioned Ms. Anderson project for a reason. I believe ALL black Americans should start investing in black business. It does require sacrifice but it will be a start to recognizing what we can do proactively to help build the black infrastructure and rebuild our communities. Thank you for the great read Devin and continue writing the great books.

    “The success and development of more Black businesses prevents Black wealth from leaving Black neighborhoods”. Maggie Anderson

  3. March 10, 2012 2:14 am

    To directly answer the title, Why Korean Supply stores succeed over black ones simply because the black consumer has been trained. The truth is the only thing that really states a black owned beauty supply is that, Black; is the lack of volume.

    We lack volume because we lack working capital whereas the Korean has plenty.

    I guarantee while being black if you max out a Wal-Mart size beauty supply store with everything from wigs, to perms to flip flops, hair rollers and everything in between the black consumer will respond.

    Have a person doing quick weaves, another shaving eyebrows and another making wigs on site & you won’t have a problem snatching the attention of the black consumer.

    The Koreans have trained the black consumer to respond to bulk and companies

    most of their stores are messy, and cluttered yet , maxed out, blacks are impressed with the display. The bigger the store, the more it has to offer the more loyal the black consumer; the more impressed the black consumer becomes.

    The true measure of this entrancement is in seeing most Korean beauty supply stores carry low end companies or low end products from high end companies they offer low quality products at steep prices and the black consumer will continue to buy knowing the product is inadequate.

    The black consumer will ask for it by name and reject all others, unless their money is funny at the time. The black consumer will continue to patronize these businesses even when they have been disrespected. In part because the black consumer is impressed with the volume, the volume speaks for itself and the black consumer is impressed with the conversation.

    Notwithstanding black consumer loyalty to what they have come to consider a sure thing; that is Koreans having what they want. If black owned beauty supply stores want to win the black consumer then they must project the same model of massive volumes as their Korean Competition; it is really that simple.

  4. Lakeshia lewis permalink
    July 14, 2012 8:46 am

    I totally agree with everyone’s disposition here. I love the ideas from the post before this one:

    I guarantee while being black if you max out a Wal-Mart size beauty supply store with everything from wigs, to perms to flip flops, hair rollers and everything in between the black consumer will respond.

    Have a person doing quick weaves, another shaving eyebrows and another making wigs on site & you won’t have a problem snatching the attention of the black consumer.

    This is a great idea! The difficult part is getting the bulk suppliers to sell African Americans weave. That is the major issue.

    I would like to start a ban against non- black beauty stores, in hopes of creating awareness in the community. I don’t think many of us think about it..we go in a Korean owned store, they watch us like hawks as if we are going to steal something, you ask a question about the products and they are barely educated, etc, etc.
    But we just brush it off.. hell no! WE are spending hundreds of dollars, giving them the ability to install 60in monitors to watch us!

    They don’t give back to the community, ever! I have never seen them sponsor an event
    This angers me! I want a revolt! We need national awareness

  5. July 29, 2012 2:15 pm

    LaKeshia, I can assure you from a personal perspective the issue of bulk hair and or products not being available to blacks is no longer the issue it once was, the issue is working capital to obtain products and the inability of blacks to incorporate to promote the greater good as oppose to promoting themselves and their concepts as individuals. The old adage black folks don’t know how to work together is unfortunately our mantra. In order to produce the scale of a Wal-Mart sized beauty/hair/wig supply store that would level the competition would take an easy million and more depending on the grade and quality of the products offered. Being angry is understandable; however we need to move into real action.
    See, we can assemble quicker a mass of disgruntled blacks, boycotting and shouting down with whitey/Koreans over any given issue quicker than we can assemble a mass of blacks that will invest their time, talents and monies in being angel investors and launching a corporation! Then there is the major giant left to be contended with: the mind -set of the black consumer, the mindset that many black consumers would still rather patronize a non – black business regardless. Your point about them ( Korean owned) never promoting or supporting community events is so true but then they know they don’t have to the black consumer will continue to buy from them regardless.

  6. EARLINE BENTLEY permalink
    December 23, 2013 12:17 pm

    Their favorite question is usually “Can a sister get a discount?” If you give discounts to everybody, at the end of the day, you’re broke. Often unqualified relatives are hired using the excuse, “they’re family.” Often hiring “mama” and she can be rude and overbearing and I’ve heard them say<"you can take your business elsewhere, we don't need it."These are examples that I've encountered in some black businesses. Then they are first to holler, we can't get our people to support us." Wonder why? Just saying.!

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