Retailing Crafts - A Selling Proposition

Sood, Anubha, a graduate in Social Policy and Planning in Developing Countries from the London School of Economics (2002) in currently working as a Manager-Market Access Initiatives with AIACA-All India Artisans and Crafts Workers Association. In the past she has worked with Action Aid, OXFAM, Dastkar and URMUL Trust. She specializes in various aspects of craft related income generation programme-identification of crafts, craft communities, production planning, quality control, linking with the appropriate markets and self sustenance of the programme. She has conducted extensive training programs with women and artisans in various aspects of income generation. She has also helped set up a crafts shop in Lucknow called SANATKADA.

'If you give me sawdust, I could even sell that! You have to create demand for your products and then should be able to fulfil that demand.'
- Businessman in Bombay, when asked about his stone export business.

'I opened my shop on 23 August 2003 and three days later my shop was empty.'
- Aradhana Nagpal, who runs Dhoop, a contemporary Asian crafts shop in Bombay.

These were some of the responses that I got from people who sell craft products. Having been involved with non-government organisations that support craft groups, I have been concerned with the situation of their market. It is important to understand the present state of craft retailing, the experiences of current players in the chain that produce and sell crafts. What are the gaps that exist in the chain and how can they be filled. Are crafts a viable selling proposition today?

There are different kinds of set-ups that sell crafts - retail outlets, exporters, designers-cum-entrepreneurs, government emporia, chain stores and producers themselves. Most of the producers supply to small retail outlets, which store products from various groups, giving customers a wide range of hand-made products from various states of India. The quantity of each product at the outlets is generally small. Supplying to these outlets involves less risk for the producer groups - quantities are small and delivery dates not very rigid. If supplies are late by a week or a month, the outlets tend to be soft about it, unless of course winter stock is arriving in summer!

A major problem in supplying to retail outlets is that they order very small quantities. Due to the small scale of their business, they might keep products on consignment and pay groups as and when there are sales, and return what does not sell. Exporters often cater to the domestic as well as the international market. For domestic sales, they might source from craft groups but rarely do they source from them for the export market. The reason being that they require large quantities for export, have to adhere to very high quality standards and strictly abide by delivery date commitments. They usually have their own production units that are close enough for regular supervision; they produce for their retail and export orders.

Designers develop their own range of designs and products and then have these executed by craft groups. They could be selling in the domestic and export markets. They too prefer to have their own production units so that they can do quality checks, follow-up production and see that others do not copy their designs. They do source some products from craft groups, but get the bulk of their production from their own production units.

Producers also sell their products directly to the consumer either through exhibitions or through orders that they procure. The number of craft exhibitions and fairs in metro cities have increased in the past decade. Government-run state emporia also sell crafts. Each state has an emporium in Delhi and in the state capital.

The new trend of chain stores and malls is becoming popular in urban centres. One can buy everything under one roof from household goods, children's toys, home furnishings to garments. These stores require large quantities every few months and demand moderate/low priced goods that can be delivered in substantially large volumes every few months (depending on their turnover). They stock products from craft groups to complete the picture of 'one stop shop' and also because craft products are in demand, as I was told by Shoppers' Stop, Bombay.

Let me look at the other end of the chain, in particular at the craft groups that are associated with non-government organisations. These groups get assistance in design, production, product development and marketing from organisations. Most of the craft programs fall under the income-generating activity in an organisation, overseen by a staff team. The team members may not be experts in production planning, design or marketing but can motivate the groups and get them together to produce. The objective is to supplement the family income of artisans and to keep the skill alive. At times, groups do access external help to assist them with design and marketing.

Two major concerns in the non-government organisation-run craft programs are personnel and production streamlining. One person tries to do too many activities. By the time the staff members understand the work, they may have to leave the organisation or be asked to look at other programs within the same organisation. Skills that they learn are rarely passed on to those who replace them.

The groups tend to emphasize marketing rather than matching the production with the market demand, both in quantity and quality. They want more orders, want to participate in more exhibitions, supply to more outlets and export. None of them admit that they could not meet the market demand, or fulfill existing orders, or that they need to streamline production before tackling the market. Inputs that go into the program (design, entrepreneurial skill development, exposure trips, marketing trips) do not match the output i.e. production.

The constraints that craft groups face are many. Due to the unorganised and geographically dispersed nature of the groups, these constraints get even more magnified. From the lack of capital to invest in raw materials to a scarcity of raw materials and their availability at reasonable rates; from the absence of direct marketing outlets to the difficulty in accessing urban areas that are now the main markets for craft products; from production problems to a lack of guidance in product design and development based on an understanding of the craft, the producer and the market, the constraints are many and varied.

Even though the government has a number of schemes for the handloom and handicraft sector, most artisans do not even get to hear about the schemes made for them. If they have heard of a particular scheme, they cannot cope with the complex procedure to avail its benefits, and if they do manage to follow the procedure, bureaucratic bottlenecks and delays more often than not discourage the intending beneficiary. Organisations do assist their craft groups in accessing government support, but even with this it is difficult.

Craft groups are rapidly losing ground due to such reasons. They are unable to compete in larger urban markets, both domestic and international. The difficulty and costs of developing design and marketing systems prevents them from catering to rapidly changing consumer preferences and dealing with the different components of the established supply chains. The market wants consistent supply of good quality products. It demands quantity and deliveries of these on time. Products and designs need to change often so there is something new and different for the consumer. These products also have to fit the consumer's budget.

However, it was evident from talking to buyers (exporters, wholesalers and retailers) that there is a demand for craft products. The producers need to fulfill that demand in a certain way. At the buyers' end there is a need to understand the producers' context and be clear in their communications. This will facilitate the production process. At the producers' end, financial constraints, lack of raw material, change in market trends are all problems that can be dealt with if tackled on time and in a planned way. The cycle of lack of capital and raw material leading to less production and, therefore, lower sales can be broken. Producer groups and the sellers need to tackle the constraints so as to make the relationship beneficial to both. Rahul Duggal from Aravali Exports said, "The NGO sector is too idealistic, and they confuse too many things when running a business."

During my interactions with various groups in different states, I found that there is a realisation amongst the groups that they need to get focused and not confuse too many objectives. Groups recognise that they need to run income-generating activities like a business to gain long-term sustainable benefits. The biggest advantage in their favour is that the demand is there and they need to make the most of it. Groups have to meet the demand that has been created for their products.

This article was first published in Humanscape, July 2004

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