27 Feb 2019 19:59 IST

Taking the seven-R approach

Some tested business strategies such as product diversification and quality assurance must be adopted

Mandakini Gogoi, along with her husband, Rituraj Dewan and friend, Uma Madhavan, founded the social venture 7Weaves Social Pvt Ltd (7Weaves) in June 2017. The company partners with local weavers and artisans of Assam’s Loharghat Forest Range. It aims to create a profitable venture that operates on the principle of providing sustainable employment opportunities, profit redistribution, conservation of native resources, and economic development of the people. The main product of the organisation is the native silk, Eri. Being an under-developed State, with low HDI indicators, creating sustainable economic opportunities that are in line with environmental factors is the priority for 7Weaves. In this aspect, Mandakini and her team have taken the native product global, taking advantage of the growing demand for ethically-sourced slow fashion materials.

Current business model

Globally there is a growing consciousness among fashion brands and consumers about the need for ethical sourcing of textiles and garments. Consumers insist on high quality, natural materials that have a low carbon footprint, and provide a sustainable livelihood and safe working conditions for the employees involved in the entire chain of production. This renewed focus on sustainability has created an excellent opportunity for 7Weaves to take the ethically-sourced and manufactured Eri silk to a global market.

Currently, it produces three different grades of Eri silk in its integrated textile-garment manufacturing facility. 7Weaves has associated itself with renowned names in the slow fashion industry to understand the challenges and opportunities for Eri silk. Providing high-quality products at competitive prices, professional management and innovation are at the heart of 7Weaves’ business model. By early January 2019, 7Weaves was able to provide guaranteed work to people in 36 households and each artisan gets ₹6,000 per month for the whole year. It also offered to distribute 50 per cent of its profits annually to the workers, increasing the living wages of the artisans and other participants in the supply chain. The remaining 50 per cent would be used to improve the working environment, training, and expansion of business.

Challenges in current model

The main challenge in the current model is that it is resource intensive. Though sericulture and weaving are traditionally practised in this region, products need stringent quality control, effective branding, a good supply chain and innovation to become a commercial success. Hence, re-skilling of artisans becomes imperative. Investments in handlooms and facilities are expensive.

Eri is similar to the comparably lower-priced khadi cotton in look and texture, and does not have the lustre of silk. Yet it is costlier to produce. While the price of a metre of khadi cotton could be as low as ₹170, the price of the 7Weaves product is as high as ₹1,864. This is a challenge — to increase the profitability while keeping the costs low.

The third challenge is the supply chain. As the product is sourced from rearers dispersed over the region, timely delivery with required quality is a challenge. Further, since it is a rural-based, labour intensive venture with minimum mechanisation in production, any rapid increase in demand cannot be met, which is a missed opportunity.

Improving the sustainability of the current model

The above-mentioned challenges impede the venture from realising the full commercial potential of Eri silk. The point to ponder is, though 7Weaves’ business model is noble, it is not entirely new. Many similar ventures started by several NGOs and self-help groups have failed previously due to wrong strategy in approaching the market and a lack of product innovation.

Some of the steps to be taken to improve the commercial sustainability of the current model are listed below.

1) Increase the product innovation for a global market. By engaging with designers and artisans, 7Weaves can increase its offerings in terms of designs and diversified products. Selling finished and value-added products, such as embroidery works on Eri silk, stoles and shawls to consumers, will help the company in commanding a better price for its products.

2) Another aspect of improving the design and product variety without distorting the USP — 100 per cent natural and ethically-sourced silk — is using natural dye extracted from the plants native to this region. The Crafts Council of India has, so far, recognised 23 colours developed entirely from organic sources, which can used in Eri silk.

3) Skilling of rearers, weavers and artisans to improve the productivity and quality is must. Though 7Weaves already provides some amount of skill training and quality control, there is no coordinated efforts to learn, improve, compare and benchmark quality. Indian Institute of Entrepreneurship, Guwahati and the Union Ministry of Micro, Small and Medium Enterprise are providing technical and financial assistance to train the artisans without affecting the traditional factor in the production. By setting up productivity and quality benchmarks, 7Weaves can drastically improve the output.

4) There should be a concentrated effort to tapping the national as well as global markets. Emphasising the quality, design, brand and ethical aspects of the product is important. To market the products within India, the 7Weaves marketing team can get assistance from Tribal Co-operative Marketing Development Federation of India, which specialises in marketing handicrafts, artisanal items, ethic jewellery, bamboo works and more.

5) 7Weaves is underutilising its supply chain in the current set up. Assam and its villages are known for their traditional handicrafts and ethnic jewellery. By tapping this network of artisans who are working on ethic jewels made from organic and traditional materials, 7Weaves can create a parallel market for these items as accessories for Eri silk garments in the slow fashion industry.

Expansion into global markets

Expanding into global markets faces two main challenges: supply chain and product quality. In terms of brand positioning and price, 7Weaves has positioned its products well. Its strength is its business model and the quality it offers for a handwoven product. By positioning its product as ethically sourced, sustainably manufactured with traditional processes, it is better positioned to penetrate the global market. By improving on the aspects discussed in previous section, 7Weaves can create a name for itself and command premium prices due to favourable exchange rates and lower wages.

However, the challenges arise the moment they try to expand from current buyers. As awareness grows, servicing new markets needs better marketing techniques, a good supply chain and diversified products. These challenges can be addressed by having the seven-R approach as below.

1) Right Product

Better market research to forecast demand and incorporate the findings in the product design. Involve fashion designers right from the first step in the production process.

2) Right Place

Find the right distribution medium to reach customers. Similar organisations use existing showrooms of retail brands to take their products to the customers.

3) Right Price

Competitive prices with great quality should be the strategy. The entire process should be transparent so that customers can emotionally connect with the product and brand.

4) Right Customer

Using the existing contacts of slow fashion designers and sellers, find out about other customers who are aware of these products and are willing to buy them.

5) Right Condition

Ensuring quality of the product is paramount. Go for quality certifications; there are many certification bodies. This will increase the acceptability among consumers.

6) Right Time & Quantity

Proper demand forecasting, improving productivity, optimising production techniques, timely delivery with reduced logistics cost are key to success.

Marketing approach

Incorporating all the points discussed so far, 7Weaves has to develop a strong marketing/sales team to expand the market for their product. Without strong brand marketing, the company will suffer from an NGO image, with a limited market and little room for pricing freedom. It is important to carry the brand 7Weaves across global and national markets with a different message, without diluting the USP. In every stage, production to delivery, ensure transparency so that people who are highly conscious about the ethical and sustainable nature of materials can develop trust and an emotional bond with the brand. Word of mouth is the strongest possible marketing strategy.

Conclusion

7Weaves has started well, with a noble business idea, which is profitable and sustainable. However, to expand from here, they need to adapt some tested business strategies such as product diversification, quality assurance, marketing and optimising the supply chain. With the available financial resources and government assistance, 7Weaves can expand its business, which can serve all the stakeholders, from artisans to consumers, in the best possible way.

(The second runners-up are students at LIBA.)

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