e-commerce platforms for craft products from emerging ... · pdf file... the us is currently...
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September5,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
1) TheUSiscurrentlythegloballeaderofcraftimports—importing$87.3billionworthofcraftsin2015.
2) Amongcraftexportingcountries,Chinadominates—exporting$148.6billionworthofcraftsin2015.
3) Between2012and2015,antiques,paintings,interiordécorandtoyssawsomeofthestrongestexportgrowthratesfromChinaandIndiaamongthedifferentcraftcategories.
4) Duringthesameperiod,otherartsandcrafts(suchascandlesandartificialflowers),paintings,interiordécorandcarpetssawthestrongestgrowthinimportsintheUKandtheUS.
5) In2016,52.5%ofAmericanconsumersshoppedin-personforhandmadeproducts,around20%–25%shoppedthrougheBay,AmazonandEtsy,and10.1%shoppedfromindependentwebsitesforhandmadeproducts.
E-Commerce Platforms for Craft
Products from Emerging Markets
Deborah Weinswig
Managing Director
FGRT
US: 917.655.6790
HK: 852.6119.1779
CN: 86.186.1420.3016
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September5,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
IntroductionMostcountrieshavetraditionsandcultureuniquetotheirregionsandsocieties,andthisculturalheritageisoftenmanifestedthrougheverydayphysicalgoodssuchasclothing,furniture,homewareandtoys.Whiletheseitemstendtobemass-producedfordomesticconsumers,theyareoftenhandmadeorproducedinsmallquantitiestocatertoanicheaudienceoutsidethehomecountryaswellastovisitingtourists.
Inourpreviousreport,OnlineMarketplacesforHandcraftedandVintageMerchandise,welookedatonlinecraftmarketplaces,andexaminedgloballeaderEtsy’spositioninginthissegment,aswellashowAmazonandeBaycomparetoit.
Inthisreport,weexploresomeregionalplatformscateringtoglobalmarkets:thesearee-commercesitesthatsellcraftsrepresentativeoftheculturalheritageofthecountriesfromwhichtheyoriginate.Wealsolookatsomeofthekeyonlineplatformsamongthedifferentcategories,themarketstheyserveandsomeofthechallengestheyfaceingettingtheirproducttocustomers.
Asmanyofthesecraftsneedtobeproducedinthehomecountryandexportedtobuyingcountries,welookatsomeofthecountriesthatleadthetradeincrafts.
GlobalLeadersinImportsandExportsofCraftsManyconsumersindevelopedeconomiesseekoutcraftproductstoaddatouchofuniquenesstotheirhome,wardrobeorpersonalityinawaythatmass-producedgoodscannot.TheUSiscurrentlythegloballeaderincraftimports.In2015(latestavailable),itimported$87.3billionworthofcraftproducts,accordingtotheUnitedNationsConferenceonTradeandDevelopment(UNCTAD).
Figure1.TopTenImportersofCrafts*,2015(USDBil.)
*Craftsinclude:carpets,celebrationmerchandise,paperware,wickerware,yarn,architecture,fashion,glassware,interiordécor,jewelry,toys,antiques,paintings,photographyandsculptures.Source:UNCTAD
87.3
36.4
26.9 25.218.5 16.9 14.9
9.4 9.1 7.2
US France HongKong UK Germany Switzerland Japan Italy Canada China
Inthisreport,weexploreseverale-commercesitesthatsellcraftsrepresentativeoftheculturalheritageofthecountriesfromwhichtheyoriginate.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Amongexportersofcrafts,Chinadominatestheworldbyasignificantmargin.In2015,itexported$148.6billionworthofcrafts,accordingtoUNCTAD.Itsclosestcompetitor,France,exportedsome$31.2billionworthofcrafts,aboutonlyone-fifththatofChina.
Figure2.TopTenExportersofCrafts,2015(USDBil.)
Source:UNCTAD
WhatCategoriesHaveGainedtheMostTraction?Antiques:ChinaandIndiahavelongbeenknownassourcingdestinationsforvariousgoods.Wereviewedthecategoriesthathaveseenthehighestexportgrowthinthesecountries.Antiquesfeatureprominentlyforbothcountries—between2012and2015(thelatestperiodforwhichUNCTADprovidesdata),antiquesexportsgrew112%inChinaand45%inIndia.
Others:Othermajorexportcategoriesincludepaintings,interiordécor,wickerware,toys,celebrationproducts,yarn(suchashandmadelace,hand-wovenandneedleworkrugs,embroidery,bedlinenandmaterialsthataremanmade,printed,knittedorcrocheted)andotherartsandcrafts(suchascandles,tannedordressedfurskins,artificialflowersandwoodcrafts).
Source:iStockphoto
148.6
31.2 30.0 25.1 22.3 20.1 16.4 15.9 14.18.6
China France US Italy HongKong UK India Germany Switzerland Turkey
Chinadominatestheworldamongcraftexportingcountries,shipping$148.6billionworthofcraftsin2015,whileitsclosestcompetitor,France,shippedcraftsworth$31.2billion.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
TheUSandtheUK,twoofthemajorimportersofcrafts,sawthestrongestgrowthinimportsofotherartsandcraftsandpaintings.Theotherkeycategoriesofimportsforboththesemarketsarecelebrationproducts,toys,antiques,carpets,interiordécor,sculpturesandyarn.
Figure3.ImportandExportGrowthRatesofCraftsinSelectMajorMarkets,2012–2015(%)
TopExports
China India
Antiques 112% Wickerware 47%
Paintings 16% Antiques 45%
InteriorDécor 14% Toys 28%
OtherArtsandCrafts 13% Celebration 23%
Celebration 8% Yarn 12%
TopImports
UK US
OtherArtsandCrafts 13% Paintings 15%
Celebration 8% Carpets 9%
Toys 7% InteriorDécor 9%
Antiques 7% Sculptures 8%
Carpets 7% Yarn 7%
Source:UNCTAD
WhileOnlinePlatformsArePopularforSellingCraftsandSharingIdeas,In-PersonBuyingStillDominatesThecraftmarketisnotjustaboutimportedgoods:itincludespeer-to-peersellingwithincountries.MakingandsellingcraftshasbecomeincreasinglypopularamongmillennialsintheUS.About45%ofoldermillennials(ages30–39)soldacraftprojecttheymadethroughanonlinestorein2015,comparedto18%ofAmericanconsumersoverall,accordingtoaMintelsurvey.Some55%ofoldermillennialsintheUSuseonlinevideotutorialstolearnacraftskillortechnique,comparedtoabout33%ofAmericanconsumersoverall,accordingtothesamesurvey.
Despitethepopularityofe-commerce,manyconsumersarebuyinghandmadeproductsin-person,atcraftfairs,storesandfleamarkets,accordingtoa2016surveyof1,000AmericanadultsbymarketresearchfirmAskYourTargetMarket.
About45%ofolderUSmillennials(ages30–39)soldacraftprojecttheymadethroughanonlinestorein2015,comparedto18%ofAmericanconsumersoverall.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
In2016,52.5%ofAmericanconsumersshoppedin-personforhandmadeproducts,around20%–25%boughtthemthroughEbay,AmazonandEtsy,and10.1%boughtfromindependenthandmadeproductwebsites.
Figure4.US:PreferredPlacestoBuyHandmadeItems,2016
n=1,000AmericanadultssurveyedinAugust2016.Source:AskYourTargetMarket
While52.5%ofconsumerssaidtheyshoppedin-personforhandmadeproducts,some20%–25%indicatedthattheyboughtthemthroughlargee-commercesites—suchasEbayandAmazon—aswellasthroughhandmadeproductsmarketplaceEtsy.Only10.1%indicatedthattheyboughthandmadegoodsthroughindependentwebsitesand6.1%purchasedfromothermarketplacesites,therefore,theaudienceforindependentsitesisstillquitelimited.
Source:Etsy.com
However,thereishopeforindependentwebsites.Some48%ofrespondentsinthesamesurveyindicatedtheybelievedhandmadecraftsshoppinghasbecomemorepopularoverthepastfiveyears,and49%believethatitcouldgaininpopularityoverthenextfiveyears.Furthermore,while81%ofhandmadeproductbuyersindicatethatthey
5.4%
6.1%
10.1%
20.3%
24.7%
24.9%
26.6%
29.9%
39.3%
52.5%
Other
OtherMarketplaceSites
IndependentHandmade
Amazon
Etsy
Ebay
Farmers'Markets
LocalStores
FleaMarkets
CrajFairs
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
buyhandicraftsbecauseoftheuniquenessoftheproducts,51%indicatetheybuythemtosupportsmallbusinesses.Overall,58%ofconsumersfelthandmadeproductsareofbetterqualitythanmass-produceditems,and55%thoughthandmadeitemsaremorestylishthanfactory-made,bulk-producedmerchandise.
Thesebeliefshavelikelygivenmomentumtotheemergenceofindependentcraftwebsitesacrossseveralregions.Whilecraftmarketplaceshavebeenestablishedinmanydevelopedcountries,thesegmentisstillunderdevelopedintheemergingregions,particularlyinAsia.
WeprofiletwoplatformsfromIndiaandAfrica,JayporeandZuvaa,followingthetablebelow.
Figure5.SelectedCraftPlatformsfromIndiaandAfrica
Platform BusinessModel
LocationofPlatform BusinessDescription
IndianProducts
Tjori Curated India Fashion,homeware,jewelryandpersonalcareproducts.
Jaypore Own-brandandcurated
India Homedécor,accessories,jewelry,apparel,giftsandvintageitems.
UnravelIndia Own-brand India Homedécor,officeaccessories,kitchenanddiningware,andwomen’sfashionandaccessories.
Craftsvilla Marketplace India Fashion,homeware,accessoriesandfood.
Vedique Own-brandandcurated
UK SculpturesandartdécorfromIndia,Thailand,China,Pakistan,Nepal,Australia,SouthAmericaandAfrica.
Namaste Own-brand UK Homedécor,accessories,jewelry,apparel,gifts,furnitureandincensefromIndia.
AfricanProducts
Afrikrea Marketplace France Fashion,homeware,jewelry,bagsandart.
Zuvaa Marketplace US Women'sfashion,accessories,personalcareproductsandhomewares.Shopperscanshopbydesigners,too.
Kuwala Curated Canada African-inspiredwomen'sfashionandaccessories.
Luxoca Own-brandandcurated
Ghana Women'sfashion.
Sapelle Own-brandandcurated
UK Fashion,homeware,accessoriesandgifts.
SouthAmericanProducts
ThreadsofPeru Curated Peru Ponchos,accessories,homedécorandchildren’saccessoriesandtoys.
Caserita Own-brandandcurated
Bolivia Clothing,jewelry,accessories,bags,toys,homedécorandknittingwool.
TukuruTextiles Curated UK Fabric,clothing,accessories,jewelryandcarvedgourds,representingAndeanheritage.
Source:Companywebsites
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
CompanyProfiles
Jaypore
Source:Jaypore.com
Businessbrief:Jayporeisanonlinestorethatsellsown-brandandcuratedhomedécor,accessories,jewelry,apparel,giftsandvintageitems,inspiredbyIndianculture.
Competitiveadvantage:Jayporewaslaunchedin2012,initiallycateringexclusivelytoUSconsumers.Withinayear,ithadexpandedtoservetheglobalmarket.Itisanestablishedbrandinitssegmentwithawideproductassortment. Traction:Some25%ofJaypore’srevenuesarefrommarketsoutsideIndia,andwhiletheUSisitslargestmarketoutsideIndia,demandfromEuropeandMalaysiaisgrowing,accordingtoCEOPuneetChawla(source:DailyNews&Analysis,August2017).ChawlaplanstopushfurtherintooverseasmarketsbysponsoringIndianculturaleventsandpartneringwithIndianboutiquesabroad.
Between2013and2015,Jaypore’srevenuesgrewby5,000%,accordingtostartuptrackerYourStory.
Funding:Jayporeraised$5millioninseriesAfundinginFebruary2016.Includingseedfunding,todate,ithasraisedatotalof$5.38million.
Zuvaa
Source:Zuvaa.com
Some25%ofJaypore’srevenuesarefrommarketsoutsideIndia.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
Businessbrief:ZuvaaisamarketplacewherevendorsanddesignersofAfricanheritagesellwomen'sfashion,accessories,personalcareproductsandhomewares.
Competitiveadvantage:ZuvaahasanestablishedpresenceintheUS,andshowcasesvendorsanddesignersthathaveadaptedAfrica-inspiredfashiontocatertoboththeAmericanandtheglobalmarket.FounderandCEOKelechiAnyadiegwuwasfeaturedinForbes’s201630under30listintheretailande-commercecategory.
Traction:Sinceitslaunchin2014,Zuvaahasearnedover$200,000inrevenues,accordingtoitsprofileonwebsiteVentureCapitalforAfrica.Ithasover1,200customersgloballyandfeaturesmorethan40vendorsonitsplatformwhohave,onaverage,doubledtheirsalessincejoiningZuvaa,accordingtoitsprofile.
Funding:Zuvaahasnotdiscloseditsfundingandisactivelyseekingfurtherinvestment.
ChallengesintheArtsandCraftsTradeSomeofthechallengesfacedbyartsandcraftsmakersaresimilartoproducersthatmanufactureandexportinbulk,whileothersareuniquetothissegmentofmakers.
1.ExportFormalitiesandQualityControlExportregulationsandqualitybenchmarksvaryacrosscountries,andcomplyingwiththesemayberathertediousforasmallbusiness.Handmadeproductsmaynothavethesameuniformityandconsistencyinqualityasmass-producedgoods,andwhilethevariationsindesignmakethemunique,itmaybedifficulttocomplywiththeregulationsoftheimportingcountries,suchashealthandsafetystandardsforfurniture.
Source:iStockphoto
Sinceitslaunchin2014,Zuvaahasearnedover$200,000inrevenue.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
2.ShippingFeesAsmosthandmademerchandisetendstobemadebyartisansandcraftspeoplelocatedclosetotheoriginoftheproducts,shippingthemacrosscountriesaddstothecostoftheproduct.Whilecuratedandown-brandplatformsmaybeabletoprovideeconomiesofscalebycollatingandshipping,sellersonamarketplaceplatformmaybeatadisadvantage,asshippingcostscanvarydependingonlocationandthenumberofproductsboughtbyasinglecustomer.
Source:iStockphoto
3.PaymentToenablecustomerstotransactseamlessly,onlineplatformsneedtohaveglobally-recognizedpaymentgatewaysthatcanfacilitatepaymentsacrossmultiplecurrenciesandcountrieswithvaryinglevelsofInternetinfrastructure.Thesellersonthemarketplacesshouldalsobeequippedtoreceivethepaymentsmadethroughtheplatform.InsomeAfricancountries,forexample,limitationsexistregardingthetotalamountthatcanbetransferredinasinglepayment.InIndia,manytownsandvillageswherehandicraftmakerslivedonothavethenecessaryinfrastructuretoshipgoodsandreceivepayments,unlesstheyarepartofahandicraftcluster—aspecialeconomiczonedesignatedbythegovernmenttosupportsmallindustries.
MarketThemarketforhandcraftedgoodsisalsoniche,particularlyincountriesotherthanthatoforigin.Consumersmaybuyitemsasgiftsorfornostalgicreasonstoremindthemoftheirhomecountries.Maintainingaplatformwithhighcostsandfewshoppersmaybecomeachallengeinthelongterm.
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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
WhatWeThinkWhilecraftplatformsmayappeartobeanicheproposition,thepotentialforfurthergrowthexists.Asmorepeopletravelacrosstheworldandsettleincountriesotherthantheirhomecountry,e-commercecraftplatformsaremakingproductsfromtheirhomecountriesmoreaccessible.However,inordertocatertoaglobalaudience,platformsneedtoadapttheirproductstosuitlocalconsumers’tastesandstyles.Forexample,manyoftheAfricanplatformshavecreatedwesternclothinginspiredbyAfricanculture,whereas,therearefewIndianplatformscreatingIndian-inspiredwesternwear.Forsmallandnichebusinessestocontinuetogrowinthelongterm,itisimportantthattheyadapttheirproductstosuitlocalconsumersandcatertoabroaderaudience.
Anotherwaycraftplatformscanreachmoreconsumersisbycreatingaphysicalpresencethroughstores,pop-upshopsandbyparticipatingintradefairs.Amajorityofhandicraftshopperslikeshoppingforsuchgoodsin-personanditgivesthesellersachancetosharehowtheproductiscrafted,whichraisesawarenessofthissegment.
Source:iStockphoto
Nevertheless,ase-commerceinfrastructurebecomesincreasinglyaccessible,webelieveitwillplayanimportantroleinhelpingmoreartisans,craftspeopleandsmallbusinessesreachconsumersacrossawiderrangeofcountries,inasustainablemanner.
Onewayindependentcraftplatformscanreachmoreconsumersisbycreatingaphysicalpresencethroughstores,pop-upshopsandbyparticipatingintradefairs.
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September5,2017
DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comSwaroopraniMuralidharResearchAssistant
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