As a social impact venture, this online marketplace supports the rural artisan sector through a strong supply chain and marketing focus.
At a glance:
Founder: Aparna Challu
Year of launch: 2016
Problem it solves: Rural artisans get access to global consumers
Born to a defence family, Aparna Challu (53) has travelled extensively throughout India, and studied in nine schools.
“Where I studied was never an option. Our duty was to serve, and be Indian. My devotion to India, my passion for its rich civilisation, my intimate knowledge of the arts and crafts, all stem from my upbringing,” she reminisces.
Aparna trained in multiple professional IT courses, as well as the Executive Leadership Programme at Henley Business School, UK. With her experience of setting up and leading IT companies in the Middle East, UK, Europe and North America, Aparna recently started a new venture to empower marginalised communities – mostly rural artisans.
According to Aparna, despite increasing internet penetration and affordability of mobile phones, the rural sector and crafts ecosystem is still far from benefitting from globalisation.
She explains, “In villages, large brands use middlemen, to place small orders with multiple artisans and set prices for the products. They will usually provide the raw materials too. It’s a captive setup. The artisans are limited to the very bottom of the value chain. Only when they can own the entire process - buying raw-materials, to creating products across a wider range and diversifying into different product categories, with the same materials and skill-sets, can they become entrepreneurs themselves and meaningful, active contributors to the economy.”
To enable skilled artisans to sell directly to Indian and global consumers and earn better, she launched an ecommerce platform, CraftsBazaar in 2016.
Encouraging direct sourcing, CraftsBazaar eliminates middlemen and thus increases income for artisans. As a social impact venture, CraftsBazaar provides not just an online marketplace but also supports rural artisans through a strong supply chain and consumer-centric marketing. It takes care of the entire process for artisans, from the setting up of a store to delivery in India and abroad.
CraftsBazaar aims to be the first choice of consumers for buying handmade, one-of-a-kind products from home and living, apparel, arts and vintage. Currently self-funded, CraftsBazaar plans to raise funding over the next 12 months.
It was no easy task for the CraftsBazaar team to reach out to people from a vast Indian canvas that spoke different languages. Many were hesitant in engaging with new sales paradigm and online payment. But in a span of two years, Bengaluru-based CraftsBazaar has onboarded 4,000 artisans across the country.
“There are artisans in remote villages with pin codes that do not even exist on the radars of courier companies,” Aparna adds.
CraftsBazaar has hubs in proximity of key crafts-clusters across the country. The CraftsBazaar ecosystem comprises artisans, NGOs, cooperatives, crafts-promoters, small retail shops, heritage collectors, logistics-partners, and micro-finance providers.
CraftsBazaar has a three-step approach towards building its business:
All communications are done using mobile devices, from creating an artisan's profile, to the setting-up of a shop, and digital marketing, e-payments, etc.
CraftsBazaar targets consumers and boutique retail outlets in North America and European markets. Its price range is from Rs 500 to several lakh rupees for a piece. Customers’ feedback is studied and incorporated to include the product types they refer or the service inputs.
Aparna claims that Craftsbazaar has helped Indian artisans sell their products to buyers across India, the US, and the Middle East, and most artisans got repeat orders.
To reach out to target consumers, CraftsBazaar has used digital marketing, analytics and buyer purchasing behaviour modelling, participation in events, and have more plans for the future.
The commitment is to return a percentage of profits to skills training for increased scale and better facilities.
CraftsBazaar focuses on customer and artisan satisfaction, cost of customer acquisition, productivity per unit sold, refund ratio, etc. “Artisans have sold as many as hundred pieces in a single order and have made products from photographs sent by customers,” Aparna says.
CraftsBazaar has 1,128 categories of products and over 100, 000 SKUs. Handcrafted woven apparel, artifacts, paintings, carpets and herbal products are the most popular among them. CraftsBazaar plans to open experience stores in key metros and tourist locations in the long term.
The Indian handicraft industry is expected to cross Rs 24,000 crore by 2020 with its current size being at around Rs 17,000 crore. India’s market share is near insignificant at less than 2 percent of the world market. The chasm between the potential and the reality presents a phenomenal opportunity.
Yet, FabIndia remains the only retailer to have successfully scaled up and made profits by sourcing through Indian artisans and craftsmen. Having onboarded more than 40,000 artisans, this 58-year-old retail chain recently hit the Rs 1,000 crore revenue mark.
But it remains the only success story in the sector, if you count online players like Craftsvilla and Jaypore. The former’s loss in 2016 was Rs 119 crore, with a revenue of Rs 37 crore. Jaypore is moving to offline channels, hoping to be EBIDTA positive this year. Both platforms are heavily funded, but nowhere near profitability.
Does this mean scalability is hard in handicrafts ecommerce?
Aparna does not think so. She says that CraftsBazaar does not follow the model of any of these businesses that are retailers with a direct buy-sell model.
“CraftsBazaar is differentiated in business, positioning, product sets, consumer profile, and market segment. On CraftsBazaar, you can buy, you can commission, or you can bid in a live auction. The experience is personal as you are engaging directly with all the sellers. We make it possible for exporters, retailers, NGOs, self-help groups and of course artisans to sell directly and therefore, the price points are different. Our mode is based on rural hubs as opposed to large stores in Tier I cities,” she says.
CraftsBazaar crossed Rs 1 crore in revenue in its first year and is targeting Rs 50 crore this fiscal. CraftsBazaar's revenue currently is direct sales with the potential for advertising and referral. The average product price is Rs 2,000. Claiming that this business is not GMV oriented, Aparna refused to share CrafsBazaar’s GMV or annual revenue growth. She did not reveal the total investment in the venture either.
“CraftsBazaar is about creating sustainable social impact via technology. For any social impact initiative to have sustained impact, it must have strong business fundamentals and be profitable as a business. We plan to be profitable in the medium term over the coming three to five years,” Aparna signs off.