labels: marketing - general
Sting in Retail tailnews
Nita Kaul
04 February 2004

The popularity of the Indian crafts has come full circle. A few years back, owning a part of the rural artwork was restricted to a select and lucky few. Not so much because the products were expensive but because there were no distribution channels, which could bring the real India to the masses. And the ones that existed catered only to those who had the moolah.

But all that is changing. The search of the 350 million strong urban middle class for an identity, which is both Indian and contemporary, is creating a huge market for rural ethnic products - terracotta pottery from Khurja, lac jewellery from Jaipur, Kalchatti or stone work from Tamil Nadu. Thanks to the melas, bazaars, festivals and pseudo-villages in the retailers' backyard that are being organized all over the country, the rural hinterland has finally come to the urban markets.

And capitalizing on this craze, especially of the "dinks" or the "double income no kids" class of the population, whose per capita income has doubled in the last 20 years, for something "ethnic" are retail players like Shoppers Stop. For organized retailers, who have been stuck with a market share of less than 2% for the last 14 years, experimenting with the rural handicrafts card to improve store footfalls is paying off.

In 2003, the Rs 300-odd crore Shoppers Stops' annual 17-day festival, Parikrama, which showcases traditional Indian wear, accessories and handicrafts - miniature painting, bead jewellery, terracotta, pith work, helped increase footfalls at least by 20% during the time the festival was held. National sales jumped by 36% over the 2002 festival, thus accounting for 60% of peak season sales.

Shopping malls now home designers like Shyam Ahuja who has transformed the humble cotton dhurry, a rural product from Uttar Pradesh, into an affluent home accessory. By playing with colours, textures and patterns, Ahuja has pitched the dhurry as an ethnic Indian hand made product to the West.

A classic example of how retailers have converted an ethnic Indian product to a mass wear is Khadi. Khadi, has metamorphosed from a freedom fighter's identity fabric to a fashion garment, all thanks to prĂȘt designers like Ritu Kumar and Devika Bhojwani. The fascination of Generation X with this material supports more than a million men and women across the country.

Then there are others who specialize in blending commerce with conservation. Take the example of the Craft Shop at DakshinaChitra Heritage Centre near Chennai, which serves as a platform for heritage skills and supports handicrafts. The Shop sources some of its most sought after items from remote villages across the South. And urban consumer interest is rising if the revenues are anything to go by.

Margins on selling rural products in the metros can be as high as 100%. The city exhibitions the Craft Shop holds, generates revenues in the region of Rs 1.5 lakh in merely two days. Metal work sold by artisans in Dilli Haat, which would cost between Rs 650-800, can fetch a price of nearly Rs 1,300-1500 in Mumbai. A 37-piece finely crafted terracotta dinner set, which would cost Rs 1,400 or even less in Khurja, near Delhi, can fetch a minimum of Rs 2500-3,000 in the metros.

While the domestic market has been slow to appreciate the Indian handicrafts, the global market already has.

Year Total Export Revenue of Indian Handicrafts ($ Mn) % Of World Handicraft Exports
1999-2000 1,177 3.6
2000-2001 1,277 6.8
2001-2002 1,420 10.0
Every $ 1 worth of handicrafts produced in India retails for $ 20 in the US market.

Looking at the potential of the rural produce, the Confederation of Indian Industry (CII) (Southern Region) plans to enhance marketing capacity of rural producers through the Rural Net project with handicrafts being a prime focus area. According to CII, the retail industry is hoping to become a $ 300 billion one by 2010, if it continues to grow at the GDP growth rate of 6 -7%. So what better way for the rural artisan to showcase his work, than to ride on the coat tails of the Indian retail industry, which will use anything as bait to attract more customers.

There are more than 20 million crafts people in India today who depend on their traditional craft skills as a secondary source of income in times of drought, lean harvests, floods or famine. Most of them depend on inherent skills and use minimal infrastructure.

The commercialisation of the crafts is working to the benefit of both - the urban buyer and the rural artisan. While the consumer gets an opportunity to buy value-oriented and creatively designed products, the artisan gets to conserve his craft and become financially independent. This is where organized retailers can step in - build the domestic market for rural handicraft and give credit where it's due - to the craftsman.

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Sting in Retail tail