PIONEER INSTITUE OF PROFESSIONAL

STUDIES

MARKET REPORT ON HANDICRAFT

SUBMITTED TO : SUBMITTED BY: PROF. ADITI NAIDU KUSH SHARMA PROF. RASHMI FARKIYA MBA SEC A SEM (II)

INTRODUCTION
Handicrafts are unique expressions and represent a culture,

tradition and heritage of a country.

Handicrafts are mostly defined as "Items made by hand, often with the use of simple tools, and are generally artistic and traditional in nature. They are also objects of utility and objects of decoration.

Definition according to Govt. of India: Handicraft can be defined, which is made by hand; should have some artistic value; they may or may not have functional utility.

The Importance of Handicrafts:

The Cultural Importance:
Handicrafts are a substantial medium to preserve of rich traditional art, heritage and culture, traditional skills and talents which are associated with peoples lifestyle and history.

The Economic Importance:

Handicrafts are hugely important in terms of economic development. They provide ample opportunities for employment even with low capital investments and become a prominent medium for foreign earnings.

Some important facts:

The Indian handicrafts industry is highly labor intensive, and decentralized industry. Most of the manufacturing units are located in rural and small towns, and there is huge market potential in all Indian cities and abroad. Handicraft industry is a major source of income for rural communities employing over six million artisans including a large number of women and people belonging to the weaker sections of the society.

Continued:
There has been consistent growth of 20% over few years and the industry has evolved as one of the major contributor for export and foreign revenue generation. To match the demand and supply with quality, there is need to have greater technological support and innovativeness with the uniqueness in industry. Major parts of industry operates in rural and semi urban areas throughout the country and has potential Indian and International market with around 67000 exporters to tap the market.

Key facts:
The Indian Handicraft Industry is a $100 billion industry worldwide. Indias contribution in world market is 3.2% The total exports of crafts items: - Rs. 8,718.94 crore . Industrys share in India's exports:- 6.55 %.According to the provisional export data released by the Export Promotion Council for Handicrafts. As against Rs. 17,288 crore in 2006-07, the exports came down to Rs. 14,012 crore in 2007-08 and further to Rs. 8,183 crore in 2008-09.

Classification:
Handicrafts industry comprises diversified products portfolio and there is large variety available in market. Handicrafts products can be distinguished into following: Metal ware, Wood ware, Hand printed textiles, Embroidered and crocheted goods, Shawls

Carpets, Bamboo products, Zari goods, Imitation jewellery, Paintings.

Jute products, Marble Sculpture, Bronze Sculpture, Leather Products and other miscellaneous handicrafts.

Growth rate of classified items:

European Union has been the largest market for Indian exporters during the year 2009-10 taking 40.33% share of Indias total exports of handicrafts to various regions. Export of handicraft products went up to US $44.81 million, recording a growth of 44 percent in the month of November 2009.

GROWTH RATES:

7% 8%

7%

jewellery 25% woodwares shawls embroidery zari goods

8% 9% 15% 21%

hand printed textiles art metalware misc handicraft

Exports destinations
Major Destinations for Indian Handicrafts
(% share in 2008-0 9)
U.S.A. 31% U.K. 11% Others 22% Australia 2% Canada 4%

Sw itzerland 1%

Saudi Arabia 2% Netherlands 3% Japan Italy Germany 4% 4% 11% France 5%

Continued:
Occasions for which gift items are often purchased
B irthday 37%

Others 1 7% seaso nal 4%

Christmas 1 7% diwali 6% No Special Occasio n 9% Visit to friends/family 1 0%

Major distribution channel:

In India, giftware and handicrafts is distributed through five major channels: Wholesalers Importers/distributors Commission agents/sales representatives Department stores Mail-order Internet sales Tele-shopping

Strengths of Indian handicraft industry:

Large, diversified and potential market. There is large product variety and range is available because of diversified culture. It has strong, diversified and supportive retail infrastructure. Diversified product range that service different market. Cheap labor rates that result to competitive price. Need low capital investment. There is flexible production flexibility. Low barriers of new entry.

Weakness of Indian handicraft industry:

Lack of infrastructure and communication facilities. Unawareness about international requirements and market. Lack of co-ordination between government bodies and private players.

Inadequate information of new technology.

Inadequate information of current market trends. Less interest of young people in craft industry. Lack of skilled labor. Still confined to rural areas and small cities and untapped market. Lack of promotion of products.

Opportunity in this market:

Rising demand for handicraft products in developed countries such as USA, Canada, Britain, France, Germany, Italy etc. Developing fashion industry requires handicrafts products. Development of sectors like Retail, Real Estate that offers great requirements of handicrafts products. Development of domestic and international tourism sector. e-Commerce and Internet are emerged as promissory distribution channels to market and sell the craft products.

Threats of the market:

Competition in domestic market. Balance between high demand and supply.

Quality products produced by competing countries like China, South Africa.

Better Trade terms offered by competing countries. Increased and better technological support and RandD facility in competing countries.

Issues Related to Indian Handicrafts Industry

Products are high priced in big and metro cities, which are beyond the reach of people belonging middle and lower middle class. Craft producers have to compete on price, quality and delivery for different segments. There is poor promotion for craft products in national market. There is lack of awareness about new traditions and among craftsmen Inadequate supply chain management and distribution reduces the sectors commercial viability and economic sustainability.

Issues continued:
Lack of Technological support and training. Lack of Research and development for key handicraft sectors like, ceramics, paper making etc. There is shortage of skilled craftsmen and labor to match the competition. Lack of ability to produce in large scale and create economies of scale. Inadequate material testing and performance measurement.

Inappropriate energy supplies to rural and sub-urban areas.

Untapped and inaccessible market due to poor transportation infrastructure. There are inadequate training centers to develop skilled craftsmen.

Possible Initiatives to uplift the Indian Handicraft Industry:

Promotion of cultural tradition and heritage. Promotion of Indian Tourism to attract the foreign customers. Developing technologies to recycle natural resources to produce new products and ensure waste minimization, product durability and reliability. Promoting Partnership and collaboration with private sector. There should be market platform for craft producers belonging to rural areas to market their products.

There should be proper balance between cultural and commercial value of craft products to sustain business opportunities.

Continued:
Development of electronic platform by using internet to provide information, database, and marketing and distribution solution. Increased Private participation in industry. There should be optimized distribution network and supply chain management. Through improving labor productivity in a high labor intensive. Through using low cost production methods the sustainability of small business can be improved.

Handicrafts Organizations:
All India Handicrafts Board: The All India Handicrafts Board was established in 1952 to suggest various solutions for improvement and development in Handicraft Industry. Formulation of Plans, Assistance to State Govt. for planning and execution of schemes, and providing assistance for Marketing, Financial, and Organizational aspects of Handicrafts Industry. State and Union Territories: Every State and Union territories has different department for the development of Handicrafts Industry. Marketing, Promotion, Financial Aid to Small Scale Industries, and other programs are the functions of State level corporations.

Central Corporations:
The Handicrafts and Hand looms Export Corporation of India: It was established in 1962. Exports Promotion, Development of potential market execution of Whole Sale and retail Orders are major functions of organization.

Continued:
The Central Cottage Industries Corporation Pvt. Ltd.: It is a registered society that runs Central Cottage Industries Emporium in New Delhi, Mumbai, Kolkata, Chennai to sell the Handicrafts products. The All India Hand loom Fabrics Marketing Cooperative Society Ltd.: This Cooperative Society is supported and promoted by All India Hand loom Board. It has various hand loom emporiums in all metro cities, Chandigarh, Ahmedabad, Hyderabad etc. and few branches in New York, Singapore etc. All India Organizations:

All India Textile Handprinting Industries Federation: 1106 Prasad Chambers, Swadeshi Mill Estate, Mumbai, India.
All India Federation of Zari Industry: Safe Deposit Chambers, Surat, Gujarat, India.

Continued:
The Trade Development Authority of India: (Bank of Baroda Building, 16 Parliament Street, New Delhi110001). The Export Credit Guarantee Corporation (Express Towers, 10th Floor, Nariman Point, Bombay-400001): It provides exports credit intelligence, covers against various risks. The Export Inspection Council (14/1-b Erza Street, World Trade Centre, Calcutta- 700001): It is responsible for Quality Control Issues, and Pre-shipment Act.

The Federation of Indian Export Organization (Allahabad Bank Building, 17 Parliament Street, New Delhi-110001) The Trade Authority of India (Pragati Maidan, New Delhi-110001): It was started in 1977 and works for exports and trade promotion and development.

Concluding Observation:
The Indian Handicraft Industry stands a unique place among all other industries. It represents the rich culture, tradition and heritage of India. Indias rich cultural diversity and heritage provides a unique and huge resource for developing craft products. The Indian Handicraft Industry is showing continuous growth rate of 20% every year and it is one of the most important segment of decentralized sector in India.There is huge demand of Indian Handicraft products in international market. Industry provides ample opportunities for employment to people belonging to backward and weaker classes of society.

References:
www.india-craft.com www.handicraft-indiamart.com www.indianhandicraftexporter.com www.indiahandicraftstore www.jaipurhandicrafts.com

THANK YOU