MARKET TRENDS

There are many branded goods and these goods are carried by large domestic & global corporations and non-branded goods are usually carried by small and medium sized companies. Fashion industry is a representative consumer goods industry and the product life is much shorter than any other consumer goods industry such as consumer electronics or home electronic, food & beverage industries etc. Part of the reason for this is seasonal because the climate in Korea is characterized by four distinct seasons: spring, summer, autumn and winter and the contrast between winter and summer is striking. So design trends are changed every three months. Hence manufacturers and distributors always prepare new Spring/Summer collection & Fall/Winter collection before 6 months or 1 year. BASIC REQUIREMENTS In order to step into this business, one has to work arduously in the beginning as the market has been captured by some already established players who have made potential customers and are doing extremely well. The business can be started from a meager investment of Rs. 5 lacs but then again hard work is the key to success. If a new entrepreneur ventures into this market, it will take him at least 10 years to fully establish his business. One has to go to a number of exhibitions and cultural events where they can market their products with their name. Establishing good relations with the customers is also very important to nurture customer loyalty and also for positive word of mouth. MARKET GROWTH Handicrafts Sector craved for growth since quite a few years, which has now actually turned prolific. No doubt, India has an edge against its competitors like China, Philippines, Thailand, Taiwan and Korea who generally produce machine-made products. Indian handmade products have a niche market all over the world creating a distinct impact through exclusive designs, workmanship, finesse, colors and raw material etc. The sector shows a not so significant growth in the 2009-10 fiscal but grows substantially in the first half of the 2010-11 fiscal. Keeping in view the trend, the sector is expected to show phenomenal results by the end of 2011.

The swiftly rising growth in handicraft exports came about after a two-year collapse, from the second half of the last financial year, and the upward trend continues till date. Although there has been an increase in all product categories, however the increase fashion accessories has been commendable. Fashion product section comprise of costume jewellery, hand-printed textiles and scarves, embroidered and crocheted garments, bags and purses, zari supplies, footwear, shawls, belts, chappals, and stoles etc. The average growth of the Fashion accessories section has been around 32% in the first three months of the current fiscal year. While the international market for fashion jewellery and accessories is around $16 billion, India's share in this is zero. Increase has been noticed in nearly all the products categories in exports of handicrafts. In some categories, it showed less and in some it showed more progress.

Going along the trend shown in the markets we can very well see in the under given

representation that the handicrafts sector after touching the Rs.17000 cr. mark in the 2006-07 fiscal started to decline and reached the much lower Rs.8000 cr. mark in 2008-09 fiscal due to the effect of recession. From 2009 latter half, it started to grow and the current scenario indicates to witness the Rs.10000 cr. mark by the end of 2010 (represented in Blue). India is not only benefited from its major markets in US and Europe but is also heading towards newer avenues like in Latin America.

COMPETITON
The global handicrafts industry accounts for a market share of 100 billion. This industry plays a dominant role in the economic development of the rural mass of every country and earns substantial foreign exchange. 1. China: China holds a dominant position as an exporter in the global home accessory market. China produced an estimated 70% of all home accessory products sold in the United States (2005) Because of Chinas enormous production capacity and low labor costs, producers from other countries can rarely compete on price and volume. State-ofthe-art equipment and rising productivity allow Chinese producers to deliver large product quantities quickly, on time, and at low prices. 2. Vietnam: In particular is emerging as an alternative to China. Pricing is comparable, labor is skilled and hardworking, quality and delivery are good, and producers have low minimum order requirements. Its home accessories industry is enjoying government

support and benefiting from investments in infrastructure and transportation. In 2004, Vietnam exported $300 million in handicrafts to the United States, an amount which grew to $1.5 billion within five years. 3. Other emerging Asian producersIndonesia, Thailand, Cambodia, and Philippines Each offer compelling products and skill sets, but overall are less competitive than China, India, and Vietnam. Buyers affirm that while these countries have much to offer, prices tend to be comparatively high and many items can be made more cheaply in either China or Vietnam Several African producersGhana, South Africa, Mozambique, Malawi, Kenya, and Tanzania Offer a number of successful handicraft products on the world market. In the opinion of market experts, South Africa and Ghana have the highest export capacity and most competitive designs and quality. Their success is based on consistent delivery and the ability to sustain sales based on established relationships. 4. In Latn Amrica, Peru, Mexico, Colombia, Honduras, Guatemala, Bolivia, and El Salvador are : The main exporters of handicrafts. Market experts identify Mexico, Peru, Columbia, Honduras, and Guatemala as countries with particularly strong export capacity based on the number of exporters able to handle large order volumes in their own facilities or through subcontracting to smaller producers. Mexico and Peru are considered the leaders in product quality and richness of design. Guatemala also has excellent designs, but prices tend to be less competitive. Buyers single out Peru as being especially responsive to market demands, citing the availability of skilled agents and exporters, artisans experienced in exporting to the United States, relatively stable and competitive prices, the ability to deliver products on time, good quality control, a willingness to make changes according to buyer requests, thorough packing and labeling, good communication skills, and the capacity to produce items in large quantities. In 2005, Perus handicraft exports were estimated at $40 million to markets including the United States (39 %) and Ecuador (11 %)

CRITICAL ISSUES Exporters face non tariff barriers in Western markets. They also complain of impediments in the form of procedural delays at customs, disputes in nomenclature and duty drawback calculation There is shortage of skilled craftsmen and labor to match the competition Inadequate supply chain management and distribution reduces the sectors commercial viability and economic sustainability. Lack of ability to produce in large scale and create economies of scale Lack of Technological support and training. Lack of Research and development for key handicraft sectors like, ceramics, paper making etc. Lack of ability to produce in large scale and create economies of scale. Inadequate material testing and performance measurement.. Untapped and inaccessible market due to poor transportation infrastructure. There are inadequate training centers to develop skilled craftsmen. There is lack of awareness about new traditions and among craftsmen SWOT ANALYSIS OF HANDICRAFT INDUSTRY STRENGTH 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 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 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 THREAT 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 R & D facility in competing countries. PRODUCT OFFERING Handicrafts industry comprises diversified products portfolio and there is large variety available in market. Handicrafts products can be distinguished into following: 1) Metal ware, 2) Wood ware, 3) Hand printed textiles, 4) Embroidered and crocheted goods, 5) Shawls

6) Carpets, 7) Bamboo products, 8) Zari goods, 9) Imitation jewellery, 10) Paintings. 11) Jute products, 12) Marble Sculpture, 13) Bronze Sculpture, 14) Leather Products and other miscellaneous handicrafts.