Home > Indian Handicrafts Industry
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India is one of the important
suppliers of handicrafts to the world market. The Indian handicrafts
industry is highly labour intensive cottage based industry and decentralized,
being spread all over the country in rural and urban areas. Numerous
artisans are engaged in crafts work on part-time basis. The industry
provides employment to over six million artisans (including those in
carpet trade), which include a large number of women and people belonging
to the weaker sections of the society.
In addition to the high
potential for employment, the sector is economically important from
the point of low capital investment, high ratio of value addition, and
high potential for export and foreign exchange earnings for the country.
The export earnings from Indian handicrafts industry for the period
1998-99 amounted to US$ 1.2 billion.
Although exports of handicrafts
appear to be sizeable, India’s share in world imports is miniscule.
It is a sector that is still not completely explored from the point
of view of hidden potential areas. India, a country with 26 states
and 18 languages and more than 1500 dialects offers an enormous range
of handicrafts from each of the states. Major centres in Uttar
Pradesh are Moradabad also known as the "Peetalnagari"
(City of Brass), Saharanpur for its wooden articles, Ferozabad
for Glass. The North Western state of Rajasthan has to offer
the famous Jaipuri quilts,
Bagru and Sanganer printed textiles
and wooden and wrought iron furniture
from Jodhpur. The coastal state of Gujarat comes with embroidered
articles from Kutch. Narsapur in Andhra Pradesh is famous for its
Lace and Lace goods. But this is only a small
part of the total product range. India offers much more.
Handicrafts are classified into two
categories:
The craftsmen use different media to
express their originality. The diversity of the handicrafts is expressed
on textiles, metals – precious and semi-precious, wood, precious and
semi-precious stones, ceramic and glass.
Textile based handicrafts:
Hand printed textiles
including block and screen printing, batik, kalamkari (hand printing
by pen) and bandhani (tie and die) are used in products ranging
from bed-covers to sheets, dress material to upholstery and tapestry.
The famous embroidered articles of silk and cotton, often embellished
with mirrors, shells, beads, and metallic pieces are also found in India.
Embroidery is done too on leather, felt and velvet etc. This segment
of the industry accounts for almost half a million strong employment
in addition to a large number of designers, block makers, weavers and
packers involved in the trade.
Clay, Metal and Jewellery:
Brass, copper, bronze,
bell metal are used for a variety of wares and in a variety of finishes.
Scintillating ornaments are available in a wide range of patterns, styles
and compositions. Made from precious metals, base metals, precious
and semi-precious stones; these ornaments have traditional as well as
modern styles.
Woodwork:
Wooden articles in India
range from the ornately carved to the absolutely simple. One can find
toys, furniture, decorative articles, etc. bearing the art and individuality
of the craftsman. India is known particularly for its lacquered wood
articles.
Stone Craft:
The intricately carved
stoneware made of marble, alabaster or soapstone, etc., inlaid with
semiprecious stones carry on the heritage of Indian stone crafts.
Glass and Ceramic:
Glass and ceramic products
are a fast upcoming segment in the handicrafts from India. The
age-old production process of mouth-blowing the glass instills a nostalgic
feeling. The varied shapes of ceramic and glass in a number of colours,
would appeal to Western aesthetics while retaining the Indian touch.
Craft concentration
Areas:
A wide range of handicrafts
are produced all over Indian artmetalware / EPNS ware, wood carvings
and other wooden artwares, imitation jewellery, handprinted textiles,
shawls as artwares, embroidered goods, lace and lace goods, toys, dolls,
crafts made of leather, lacquerware, marble crafts etc. Although it
is difficult to limit a specific place for the particular craft, the
following places are listed for their particular crafts.
Artmetalware |
: | Moradabad, Sambhal, Aligarh, Jodhpur, Jaipur, Delhi, Rewari, Thanjavur, Madras, Mandap, Beedar, Kerala & Jagadhari, Jaselmer |
Wooden Artwares |
: | Saharanpur, Nagina, Hoshiarpor, Srinagar, Amritsar, Jaipur, Jodhpur, Jagdalpur, Bangalore, Mysore, Chennapatna, Madras, Kerala & Behrampur (WB) |
Handprinted Textiles & Scarves | : | Amroha, Jodhpur, Jaipur, Farrukhabad, Sagru & Sanganer |
Embroidered goods |
: | Kutch (Gujarat), Jaisaimer, Baroda, Lucknow, Jodhpur, Agra, Amritsar, Kullu, Dharmshala / Chamba & Srinagar |
Marble & Soft Stone Crafts | : | Agra, Madras, Baster,
Jodhpur |
Papier Mache Crafts |
: | Kashmir, Jaipur |
Terracotta |
: | Agra, Madras, Baster, Jodhpur |
Zari & Zari Goods |
: | Rajasthan, Madras, Baster |
Imitation Jewellery: | : | Delhi, Moradabad, Sambhal, Jaipur, Kohima (Tribal) |
Artistic Leather Goods | : | lndore, Kolhapur, Shanti Niketan (WB) |
Selected crafts pockets
for achieving export goal:
Although each crafts
pockets has its particular problems, a few selected craft pockets are
identified based on their past performance for immediate remedial attention
to stimulate a quantum in exports of handicrafts in the coming years.
Moradabad(UP) | : | For Artmetalwares and imitation jewellery |
Saharanpur (UP) | : | For Wooden handicrafts & Wrought iron handicrafts |
Jodhpur (Raj.) | : | For Wooden, Wrought Iron and Sea Shell handicrafts |
Narsapur (A.P.) | : | For Lace and Lace goods |
COUNTRY-WISE EXPORTS OF HANDICRAFTS
The major buyers for handicrafts (other
than carpets) are as under:
Art Metalwares |
: | U.S.A., Germany, U.K. & Italy |
Wood Wares | : | U.S.A., U.K., Germany & France |
Hand Printed & Textiles & Scarves | : | U.S.A., U.K. , Germany & Canada |
Embroidered & Crochetted Goods | : | U.S.A., Saudi Arabia, U.K., Germany |
Shawls as Artwares | : | Saudi Arabia, U.S.A. Japan & U.K |
Zari & Zari goods | : | U.K. U.S.A., Japan & Saudi Arabia |
Imitation Jewellery | : | U.S.A., U.K., Saudi Arabia & Germany |
Miscellaneous Handicrafts | : | U.S.A., Germany, U.K. & France |
Identification of market opportunities |
Prototype design and development / adaption and refinement |
Test marketing |
Upgrading equipping facilities |
Securing inputs |
Entrepreneurial hiring, training, managing |
Production, quality control and packaging |
Costing and pricing |
Physical distribution |
Export market development |
In the changing world
scenario, craft products exported to various countries form a part of
lifestyle products in international market. The impact is due
to the changing consumer taste and trends. In view of this it
is high time that the Indian handicraft industry went into the details
of changing designs, patterns, product development, requisite change
in production facilities for a variety of materials, production techniques,
related expertise to achieve a leadership position in the fast growing
competitiveness with other countries.
The 6 million craft persons
who are the backbone of Indian Handicraft Industry as provided with
inherent skill, technique, traditional craftsmanship but that is quite
sufficient for primary platform. However, in changing world market these
craft persons need an institutional support, at their places i.e. craft
pockets for value addition and for the edge with other competitors like
China, Korea, Thailand etc.
With over 82 million
inhabitants, Germany is the largest market for giftware and handicrafts
items in Europe. A member of and situated within the European
Union, Germany is supplied with giftware and handicrafts from Germany
as well as the surrounding European countries such as France, Italy,
Switzerland and the United Kingdom and from all other parts of the world:
Russia, Latin America, Africa and Asia.
The size of the total
German giftware and handicrafts market varies according to the definition
of giftware and handicrafts. With its present size around DM 29.5
billion it corresponds to a broad definition of giftware and handicrafts
that includes the following items: home furnishings, artmetalware,
table accessories, Christmas decoration, woodware and furniture, imitation
jewellers, artificial flowers/plants, scents/cosmetics, sweets, toys/computer
games, books, discs/videos, watches/jewellery, certain apparel/textile
items and others. The German giftware and handicrafts market grew
from DM 29.1 billion in 1998 to DM 29.5 billion in 1999, but experienced
a slight decline in the first quarter of 2000.
The substantial supply
of giftware and handicrafts has transformed the German giftware and
handicrafts market into a fiercely price-competitive market place. Nevertheless,
innovative and new to market giftware and handicrafts items place still
have good market prospects. It is essential for the German giftware
and handicrafts marketers to find new products to stay competitive.
Although German consumers may be willing to pay a high price for exclusive
items they are very price conscious and want value for money. Among
traditional gift items, candles, festive items, including Christmas
decoration, exclusive gift boxes and gift-wrap, ribbons, nostalgic calendars
and all types of scented items have best prospects. The German market
shows a strong demand for low-priced candles. Thus imports from
Poland and China have increased substantially. The average growth
for the overall giftware and handicrafts is estimated at 1-2 percent
over 1999-2000.
Competitive Situation
German giftware and handicrafts
consumption is growing more or less in line with the relatively slow
growth rate of income during the last years. Thus, expectations
for additional growth are not very high. Annual growth rates of
between 1.5-2 percent are forecast for the next few years for the overall
giftware and handicrafts market. In general the market shows good
business opportunities if prices and quality are competitive and delivery
schedules are fulfilled.
Apart from its own producers,
Germany is supplied by giftware and handicrafts from nearly all of the
European countries. German firms often import specific product
groups from a particular country. Major suppliers of pottery
are, for example, Spain and Portugal; fine exclusive stationery
comes from Italy, France and Switzerland; candles from
Poland, China and Portugal; dried flowers from the Netherlands
etc.
Fierce price competition
in Germany is intensified by the increasing quantity of Chinese and
Asian made products on the market. For India this situation coupled
with the relatively strong Indian rupee which means that firms proving
to be most successful in the recent past have offered niche market giftware
and handicrafts, i.e., exclusive to Indian handicrafts items or new-to-market
products.
A few well-established German manufacturers
of giftware and handicrafts items are:
Koziol GmbH, Erbach | Krebs-Glas-Lauscha GmbH, Ernstthal |
Barti GmbH, Garching | Margarete Steiff GmbH, Giengen |
Duni GmbH & Co. KG, Bramsche | WMF AG, Geislingen |
Rastal, Hoehr-Grenzhausen | Rosenthal AG, Seib |
Fartak, Lahr | W. Goebel Porzellanfabrik, Roedental |
GIES Kerzen, Glinde | Walther-Glas GmbH, Bad Driburg |
Jet Papier GmbH, Bernau |
Sales volume of specific sub-sectors
(estimates):
Some estimates of individual
giftware and handicrafts subsector volume sales are provided as follows:
Seasonal: Market
insiders estimate the total volume of the seasonal items market, including
Christmas, Easter, Valentines Day and the German counterpart of Thanksgiving,
at DM 7.7 billion. In 1997, about DM 3 billion were spent alone for
Christmas decoration, Christmas floristic items and Christmas trees
only. Christmas items are usually imported from China, Taiwan, Thailand,
Philippines and India. However, Indian Christmas decorations as
candle stands or Christmas tree hangings and soft toys find a ready
market in Germany if they are moderately priced.
Hobby and art supplies:
The present market volume of hobby and art supplies in Germany is estimated
at about DM 3 billion, while the total European market should amount
to DM 12 billion. Insiders believe that this specific market segment
still offers some potential for new products. A recent survey shows
that apart from their school days, most of the Germans who do regular
DIY or hobby work are between 60 and 69 years (10.8 percent of the German
adults) old. With the fast ageing of the German population a stronger
demand for hobby and crafts is likely.
Incentive items:
From 1992 to 1998, the total German market for incentives increased
from nearly DM 3 billion to DM 6 billion.
Toys: In 1998,
annual sales of licensing products amounted to about US$ 4.2 billion
in Germany. Also in 1998, the toys market volume expanded to DM
6 billion. Total annual sales for computer games and learning games
alone, increased to DM 2 billion in 1998 compared to the pre-year level
of DM 1.7 billion.
EU member states and
Asian countries, China and India in particular, are major suppliers
of giftware and handicrafts to the German market. Indian firms
making a first approach to the German market are advised to have comprehensive
product literature and data sheets professionally translated into German.
Although English is widely understood, a well-prepared translation gives
an important marketing edge, particularly in the initial presentation.
Indian firms should preferably appoint an agent or distributor who can
maintain a stock sufficient to answer short-notice orders.
Customs Duties
Customs duties vary according to material and product. Though duties are high for a few items, i.e., dried flowers, potpourri (16.7-20 percent), T-shirts (12.0-13.2) and hand- woven, woollen blankets (13.4 percent), the majority of customs duty rates falls in the range of 5-8 percent. For example:
Customs Duties (in percent)
Ceramics | : | 4.1 - 7.5 |
Toys | : | 5.6 - 6.3 |
Stationery | : | 8.4 |
Plush animals | : | 6.0 |
Quilts/blankets | : | 7.5 |
Candles | : | 2.8 |
Silver jewellery | : | 2.5 |
In addition, there is
a 16 percent sales tax, which is eventually passed on to the consumer
in form of the value-added tax (VAT). But the VAT has to
be paid when entering the German market by the exporter/German importer.
Items that originate
from certain animal species, i.e., snakeskin or hides of some animal,
it must be ensured that the export of these products complies with the
Convention on Endangered Species (CITES). Regarding sample orders,
exporters should be aware that one sample with a maximum value of DM
50 each or, five identical samples of one product group not exceeding
a total value of DM 50, are usually customs free.
Product Standards
In view of the wide field
of products that could be considered as giftware and handicrafts, it
is difficult to name standards. Compliance with EU standards and
regulations is strongly suggested. There are, however, only few
product groups in the giftware and handicrafts field that have to follow
standards. It is essential that CE-labelling be observed where
required. The CE-mark (including conformity statement and technical
documentation) is mainly required for toys (88/378/EEC standard).
While the quality regulations for candles are obligatory assuring a
certain level of quality, the toy regulation and the electronic standards
have to be observed because of safety considerations:
Major Distribution Channels
In Germany, giftware
and handicrafts is distributed through five major channels:
Wholesalers
Importers/distributors
Commission agents/sales representatives
Department stores
Mail-order
Internet sales
Tele-shopping
The individual channels
are described in detail in the following.
Wholesalers:
Besides offering wide
range of goods to retailers for direct sales, this channel also supplies
large quantities of individual articles. They are very particular
in maintaining consistency in the kind of products and their quality.
One of the distinguishing features of wholesalers is to provide distribution
and storage facilities. Specialised wholesalers deal in sales
to retailers as well as to final consumers. They maintain high
quality standards and but have a narrower and in-depth range of arts
and crafts.
Importers/distributors:
Most Indian giftware
and handicrafts companies use importers/distributors to market and sell
their giftware and handicrafts lines. They buy and sell on their
own account. Thus, the companies take advantage of the distributor's
expertise, his sales force and his existing distribution channels.
Distributors call on giftware and handicrafts retailers, purchasing
groups and supermarkets. The distributors' mark-up varies depending
on the giftware and handicrafts item, but at least 50 percent.
While the mark-ups vary according to the distributor; they usually also
depend on the exclusivity of a product and on its competitiveness in
the overall giftware and handicrafts market.
Germany hosts more than
45,000 giftware and handicrafts retailers. Several retailers import
directly from the United States and sell to the German customer. Usually
these are small companies looking for items new to the market and handling
small orders only.
Commission agents:
Commission agents provide
Indian companies with direct access to the German market and direct
control. Independent commercial agents are normally working on
a 15 percent commission and operate on a regional basis. They concentrate
on specialist retailers, purchasing groups and department stores.
Commission agent contracts are based on stringent EU and German regulations.
An Indian firm wishing to appoint an agent should make sure that such
standard contracts meet its expectations. In order to facilitate
market entry efforts by the agents their initial commission is often
a few percent higher than the "usual" commission. These additional
payments are to reimburse the agent for substantial advertising and
any special efforts facilitating the new product's market entry.
Department Stores:
Indian companies interested
in establishing business contacts with major department stores, mail-order
houses and retailers may also choose the direct approach. Department
stores in particular, prefer to deal directly with manufacturers.
Their buyers are very specialized and only handle a limited range of
products. At some occasions department stores also buy through
independent commercial agents. Quite often they have their own
buyers as well as a few agents that usually work with them and who know
their assortments. If a department store decides to import a particular
giftware and handicrafts item, it places bulk rather than small orders.
Mail Order:
On an average, each German
consumer buys products totaling to DM 500 each year from mail-order
houses. There are about 200 mail order companies in Germany.
In Europe, Germany is the largest mail order market, followed by Great
Britain and France. The total European market volume for mail
order products is estimated at approximately DM 90 billion. Of the 20
major mail order companies in Europe, 12 have their headquarters located
in Germany. Among them are the world's largest mail order companies:
Otto Versand in Hamburg and Quelle Schickedanz AG & Co.
in Fuerth. In addition, several German mail order companies operate
in other European countries, as well.
Internet Sales:
Germany will become market
leader among the EU countries with regard to sales over the Internet
by the year 2000. It is anticipated that by then German electronic
sales, which are estimated to reach a volume of DM 500 billion worldwide
in 2000, become second in the worldwide ranking after the United States
and before Japan. A typical German Internet user and a major German
mail-order publication is between 20-39 years old, is highly educated
and earns more money than the average German consumer. This age
group consists of about 4.5 million Germans. Seventy percent of
these consumers are male. Already today, the Internet is a major sales
channel for German mail-order houses.
Teleshopping:
QVC and HOT are the two
tele-shopping channels in Germany. They operate all over Germany
and offer various types of giftware and handicrafts; jewellery, fashion,
health, beauty; household consumer goods; collectibles and home accessories.
SWOT Analysis of the Indian handicrafts industry
Opportunities
|
Strengths
Weaknesses
|
Threats Decline in India’s share due to:
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