A Path Forward for Artisans

E-commerce offers artisans an opportunity to capture international markets. But how can they become an even bigger part of global trade?

What comes to mind when you think of handmade goods? Perhaps you remember a trinket you bought during a trip to the beach, a piece of furniture made of indigenous materials or traditional art from a luxury store.

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In developing economies, artisan enterprises are the second largest employers after the agricultural sector.

These days, artisanal is its own category. The artisan economy has boosted trades like woodworking and weaving, introduced unique products to existing categories and helped start social enterprises to uplift underprivileged communities.

Recent estimates show that the global artisan economy is now worth nearly $35 billion.

In developing economies, artisan enterprises are the second largest employers after the agricultural sector, making them a key driver of economic empowerment and job creation.

What does the artisan economy look like in 2018?

A rising middle class, a growing maker movement and the rise of social media and online marketplaces have made it easier for individuals and entrepreneurs to pursue artisan work.

Artisan enterprises are no longer just about making trinkets. Craftsmanship no longer just covers trades such as woodworking, jewelry making, weaving, painting or sculpting but also more modern trades such as photography, graphic design and website development, as well as the use of emerging technology and materials.

Today’s artisan enterprises use a combination of the three, stamped with the maker’s personal touch or perspective. This personal touch translates into a strong identity – from a striking name and logo to a background story highlighting the founder’s passion for the craft.

It has also become easier for artisan enterprises to get their businesses and their brands off the ground. Crowdfunding platforms such as Kickstarter and Indiegogo help artisan enterprises raise funds and start their business. Their use of social media and e-commerce platforms for marketing and promotion has helped them attract and maintain an international market.

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Handmade goods are no longer confined to small markets, art communes and luxury stores.

The barrier for entry for artisan enterprises is lower than ever. Artisan enterprises can already build and serve an international market even in their infancy.

Artisans can now tap directly into consumer demand. Factory Direct Models (FDM), based in Olongapo City, Philippines, makes handcrafted aircraft models for individual collectors, as well as for aviation and aerospace companies in Europe, North America and South America.

FDM not only serves individual collectors but also makes models for trade shows and aviation and aerospace events.

Seizing opportunity 

Handmade goods are no longer confined to small markets, art communes and luxury stores. E-commerce website Etsy allows people to sell both handmade items and one-of-a-kind, factory-manufactured items. In response, retail giant Amazon launched Handmade, a store specifically for handcrafted goods.

There’s certainly a growing interest in retailers offering unique items. Our recent Pulse of the Online Shopper study revealed that 36 percent of U.S. customers and 33 percent of European customers bought from international retailers because they wanted an item only available from these sellers.

The Philippine gifts, décor and houseware industry (GDH) has much to gain from taking advantage of this opportunity. Craftsmen making guitars in Cebu, furniture in Masbate or even houseware in Baguio and their enterprises only accounted for less than 1 percent of exported goods.

Elsewhere in Southeast Asia, GDH players have shipped a greater volume in gifts, décor and houseware, as noted by the University of the Philippines’ Institute for Small Scale Industries. In fact, in 2014, Thailand exported nearly $118.5 million for giftware alone, five times the Philippines’ exports for giftware for that year.

With these industries employing anywhere from 600,000 to 1 million Filipino workers, a boom in exports can lead to more jobs for over 2,000 enterprises in the GDH industry. In response, the Philippine GDH industry has created a unified brand for exports and has set a target to grow revenue as much as 10 percent annually through 2030.

Another opportunity lies in the growing middle class market in Asia.

The Brookings Institution noted that by 2030, 88 percent of the next billion people entering the middle class will come from Asia. With internet and smartphone penetration increasing in these areas, this growing middle class is expected to have a more global outlook and experience.

They now have a wealth of options to choose from for food, home décor, personal care items and even art.

Empowering people

Today’s artisan enterprises will need to integrate human capital and specialized skills with laser cutting, 3D printing and software development to take advantage of new materials and forms and breathe life into new ideas.

They will also need to cultivate loyalty in their customers to ensure steady demand throughout the year. Lastly, artisan enterprises need to provide quality customer service from search to returns.

For today’s artisans to succeed, they need to manage the timings of their supplies and finished goods, understand the documentation and processes for international markets and serve international customers without delay.

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Today’s artisan enterprises have an opportunity to bring growth and prosperity to their communities.

By analyzing various shipping options, it will help them not only to prioritize their shipments but manage their delivery times and overall operating costs, which ultimately gives their customers options and a better overall experience.

When we worked with FDM, we offered them multiple daily collections, advised them on how to complete their customs documentation, changed their packaging processes to align with international packaging standards, helped them categorize their shipments and moved their less urgent shipments to a less costly service.

After implementing these solutions, the FDM team was able to turn its attention to personalizing their customer service, improving their quality control and investing in research and development. FDM is just one example of how optimizing the supply chain and working with logistics partners can support expansion and growth.

Today’s artisan enterprises have an opportunity to bring growth and prosperity to their communities and lift millions of people out of poverty. If we are to leverage logistics and global trade for sustainable development, we need to help these enterprises gain a foothold in international markets and establish a steady customer base.

We need to help them take advantage of the opportunities afforded by e-commerce and free trade.

This is how we can ensure that the care, attention and expertise that goes into artisan products leads not just to profit but also empowerment of individuals, communities and economies.

[Top Photo: Swapnll Dwivedi/ Unsplash]

Chris Buono is the Managing Director for UPS Philippines.

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