EXPORT STUDY OF HANDICRAFTS

7/29/2019 EXPORT STUDY OF HANDICRAFTS

http://slidepdf.com/reader/full/export-study-of-handicrafts 1/27

1

CHAPTER-1

INTRODUCTION

A product only made by human hands without using of machinery or

equipment is called handicraft. Handicrafts represent traditional art heritage

and legacy of customary craft skills of a region. The rich cultural ethnicity

has made Indian handicraft products such as metal ware, pottery, sculpting,

stone crafts and jewellery, a rage in national and international markets.

Handicrafts Industry has emerged as dynamic and vibrant sector of the

economy. Indian labour intensive industry has evolved as a major

contributor to India‟s export revenues, with an industry growth rate of 20%

p.a. US and Europe together account for over 65% of the Indian handicrafts

exports.

The major strengths of the Indian handicrafts are its cheap and

abundant labour, low capital investment and the quintessential uniqueness of

these crafts, since most of them are handmade. All these characteristics give

Indian handicrafts a competitive edge in terms of prices and distinctiveness.

Skilled Indian artisans have consistently adapted and evolved to successfully

meet demands of the still-growing industry.

Handicrafts Industry is a fast growing area and there is a need to provide support to it in view of its recognized potential for generating

employment.



2

1.1. STATEMENT OF PROBLEM

There is a good demand for handicrafts in foreign market. Handicrafts

industry is a major source of earning Foreign exchange which helps in the

further development of the country by increasing foreign exchange reserves.

Therefore it is vital to know the contributions and problems of Handicraft

industry as it is main source of earning foreign exchange after tourism and

exports. It is necessary to protect such industries as it is part of Indian

culture and a small percentage of population rely on such occupation for

earning their daily living.

The statement of the study is selected as “PROBLEM FACED BY

HANDICRAFTS INDUSTRY WITH REFERENCE TO „CRAFTERS‟

SHOP, COCHIN”.

1.2 OBJECTIVES OF STUDY

a) To study the problems of „crafters‟ shop with regard to their

manufacturing and export of handicrafts

1.3 SCOPE OF THE STUDY

Exports and imports are two forms of international trade. In today‟s

world, every trade activity has its own set of problems. The main purpose of

this study is to assess the problems faced in exports of “crafters – a shop

dealing with handicrafts and antiques”.



3

1.4 RESEARCH METHODOLOGY

The study uses both primary and secondary data for the analysis. The primary data includes discussions with employers and employees of the

shop. Secondary data covers information from their financial statements,

websites, and journals. In this study the researcher has used percentage

analysis and is presented in the form of bar diagrams, pie diagrams and

cylindrical diagrams.

1.5 PERIOD OF STUDY

The study covers for the period of study for 3years starting from 2009

to 2012

1.6 LIMITATION OF STUDY

Any study conducted will always have its limitations.

The environment of export keeps on fluctuating according to the taste

and preferences of the consumer. Thus, data is subjected to bias,

errors and prejudices.

Data is curtailed only to one industry due to limited time period and to

3years which is too short period to reach any general conclusion.

In spite of limitations more care has been taken to make the study

more useful.



4

1.7 CHAPTERISATION

CHAPTER-1 INTRODUCTION

CHAPTER-2THEORITICAL AND COMPANY

PROFILE

CHAPTER-3DATA ANALYSIS AND

INTERPRETATION

CHAPTER-4 FINDINGS,SUGGESTION ANDCONCLUSION



5

CHAPTER-2

THEORITICAL AND COMPANY PROFILE

TRADE AND COMMERCE

Trade basically refers to the sale, exchange or transfer of goods. It

helps in making available goods produced to the ultimate consumers.

Trading activities are classified on the basis of volume of goods traded and

on the basis of geographical boundaries within which trade takes place.

All activities ensuring the free flow of goods from the producer to the

consumer comes under commerce. Commerce includes two types of

activities, firstly, activities ensuring sale or exchange of goods which are

called trade. And Secondly, activities which facilitate trade are called

services or auxiliaries to trade. Commerce thus includes trade and aids to

trade.

On the basis of geographical boundaries trade is classified into

internal trade and external trade. When trade takes place within the

boundaries of a nation, it is called internal trade or Home trade or Domestic

trade. Such trade facilitates movement of goods from the production point to

various consumption centers located within the country. Where trade takes

place beyond the boundaries of a nation, it is called external trade or foreign

trade or International Trade.

Where goods are purchased from a foreign country, it is called import

trade and when goods are sold to a foreign country, it is called export trade.



6

When goods are imported for export to other countries, it is called Entrepot

trade.

Under Section 2(e) of the Foreign Trade Development and Regulation

Act, 1992, „EXPORT‟ has been defined as „taking out of India, any goods,

by land, sea or air.‟

COMPANY PROFILE

„Crafter s‟ shop was established in the year of 1989 as an exquisite

antiques shop and is regarded as one of the finest handicraft sellers in

Kerala. It is located in the Quaint old quarter of Mattancherry in Cochin. The

shop has an excellent alluring collection of handicrafts, furniture, antiques,

sculptures, curios, souvenirs and ancient memorabilia of ancient and

medieval India. They are considered as one of the primary manufacturers

and dealers of crafts.

HISTORY OF CRAFTERS

Mr. Johnny L. Malayil and Mr. Sunny L. Malayil, the two brothers

are the founding partners who commenced their business in the name of

„Crafters‟ with initial capital of Rs.2,00,000/-. They were enlightened by

their father Mr. Lewis Malayil, who lited the idea of opening a handicrafts

shop. Now they have reached up to the international level and have created

a record of exporting handicrafts in more than 64 countries worldwide.Crafters Company is a manufacturing merchant exporters company and is

certified members of Archeological Survey department of India (ASI). Their

customers range from retail foreign tourists to hotels, resorts, wholesalers,

retailers, departmental stores, governments, etc.



7

They have a workforce of nearly 140 skilled people within Kerala.

The cooking vessel known as “URULY”, created by the company in 2004

which weighs exactly 3184 Kgs and completed within 13 months achieved a

place in the ' LIMCA BOOKS OF RECORD' that year . It is regarded as

one of their greatest achievements in business history. They usually sell

products of antiques type which is not more than 100 years old. The

company possesses a fair, good & healthy competition in the market. “All

good products must sell well” is their mantra. The company is planning to

invest in diversified business like luxuries and resorts.

QUICK FACTS ABOUT CRAFTERS

Year of establishment 09TH September, 1989

Legal status of firm Partnership

Nature of business Exporter , retailer

Turnover Up to US$ 0.25 million

Management (key members) Mr. Johnny L Malayil, Mr. SunnyL Malayil

Office location Jew Town, Mattancherry, kochi,kerala-02

Awards In Limca Book of Records

Other business Spices, Café

Achievement World‟s biggest URULY



8

MAJOR MARKETS

Australia South America South/West Europe

North AfricaMiddle East Caribbean

Central AmericaEast Asia North Europe

Indian Subcontinent North America South/West Africa

East Europe

South East Asia East/Middle Africa

PRODUCT PROFILE OF CRAFTERS SHOP

1. HANDICRAFT ITEMS

Kerala artifacts

Himachal artifacts

Nagaland artifacts

Tanjore Paintings

Clay/Terracotta jars

2. FURNITURE

Chair

Door

Sofa/Settee

Windows/Partitions

Wooden Figures/Box

Coffee Tables



9

Panels

Cots

3. ANTIQUES

Lanterns & globes

Mirror Frames

Old Kerala Bronze mask

Silver Mirrors

Uruly

4. SCULPTURES

Pillars-stone & wood

Sand Stone Figures

5. OTHERS

Marble items

Tiles

EXPORT PROCEDURE

It includes the steps given below-

Obtaining importers, exporters code number [IEC]

Obtaining Registration-Cum-Membership Certificate [RCMC]

Market Research

Receiving & confirming the export order

Manufacturing goods

Excise clearance

Pre- shipment inspection and quality control



10

Customs clearance

Port procedures

Obtaining bill of lading

Submission of documents to bank

EXIM POLICIES RELATED TO HANDICRAFTS 2009-14

Duty free import entitlement of tools, trimmings and embellishments

is 5% of FOB (Free On Board) value of exports during previous

financial year. Entitlement is broad banded, and shall extend also to

merchant exporters tied up with supporting manufacturers.

Handicraft EPC (Export Promotion Council) is authorized to import

trimmings, embellishments and consumables on behalf of those

exporters for whom directly importing may not be viable.

Specific funds are earmarked under MAI( Market Access

Initiative)&MDA(Market Development Assistance)schemes for

promoting Handicrafts Export

CVD (Countervailing Duty) is exempted on duty free import of

trimmings, embellishments and consumables.

New towns of export excellence with a reduced threshold limit of

Rs.150 Crores shall be notified. Machinery and equipment for effluent treatment plants are exempt

from customs duty.

Products and entitled to higher incentives.



11

Terminology

COUNTERVAILING DUTY (CVD):-

It is the additional import duty imposed to offset the effect of

concessions and subsidies granted by an exporting country to its exporters.

MARKET DEVELOPMENT ASSISTANCE (MDA):-

MDA is allowed to delegations travelling abroad for market survey

sponsored by the Export Promotion Council, Commodity Boards and other

organizations. The amount granted under MDA varies from 25% to 60% of

the actual expenditure incurred. It is also allowed on export publicity,

including exhibition and service contracts abroad.

MARKET ACCESS INITIATIVE (MAI):-

It is an export promotion scheme launched in 2003 with an objective

to work as a catalyst to promote India‟s export on a sustain basis.



12

CHAPTER-3

DATA ANALYSIS AND INTERPRETATION

The process of evaluating information and facts using analytical and

logical reasoning to examine each component is known as Data Analysis.

Data from various sources is gathered, reviewed, and then analyzed to

form some sort of finding or conclusion.

TOOLS USED

The data collected is presented in a tabular form which includes the

following:

Bar diagrams ( clustered cylinder and stacked cylinder )

Pie diagrams

1. TOTAL SALES OF HANDICRAFTS

Table no: 1

Year Total sales

2009-10 41200000



13

Chart no: 1 showing volume of total sales of Crafters shop

INTERPRETATION

In the year 2009 10 there is a growth in the total sales.

Whereas in the next year 2010 2011 there is a slight fall in its growth due to

global recession. But in the next year 2011 2012 the sales is again increasing

in a profitable way.

2. EXPORT SALES OF HANDICRAFTS

Table No.2

0

10000000

20000000

30000000

40000000

50000000

60000000

2009-10 2010-11 2011-12

41200000

31800000

53800000

TOTAL SALES (Rs.)

TOTAL SALES (Rs.)

2010-11 31800000

2011-12 53800000



14

Graph no:2 showing the volume of export sales of Crafters shop

INTERPRETATION

From the above table it can be said that the Crafters shop is facing a

huge drop in the export sales due to the affects of the global recession.

3. DOMESTIC SALES OF HANDICRAFTS

Table no: 3

0

5000000

10000000

15000000

20000000

2009-10 2010-11 2011-12

EXPORT (Rs.)

EXPORT (Rs.)

Year Export (Rs.)

2009-10 18900000

2010-11 18700000

2011-12 1400000

Year Domestic Sales (Rs.)



15

Graph no.3 showing domestic sales of crafters shop

INTERPRETATION

From the above diagram it clearly shows that there is a constant

increase in the domestic sales from the year 2009-10 to 2011-12. This

indicates that „Crafters‟ shop is doing well in marketing and promotion

efforts which have led to increase in sales of the shop. This has been due to

increase in foreign tourist arrival in Kerala and favorable investment climate

for them.

4. INTER-STATE SALES OF HANDICRAFTS

Table No: 4

11800000

18000000

18200000

Domestic Sales

2009-10

2010-11

2011-12

2009-10 11800000

2010-11 180000002011-12 18200000



16

Graph no: 4 showing volume of interstate sales Crafters shop

INTERPRETATION

From the above graph it is easy to understand that the interstate sale

has been showing an increase in trend for the shop in last three years. This

shows the shop is moving in a profitable position.

5. PRODUCTS EXPORTED BY CRAFTERS SHOP

Table No.5

0

5000000

10000000

15000000

20000000

25000000

2009-10 2010-11 2011-12

10500000 11300000

21600000

INTERSTATE SALES (Rs.)

INTERSTATE SALES (Rs.)

YearInter-State Sales

(Rs.)

2009-10 10500000

2010-11 11300000

2011-12 21600000



17

s

Graph no.5 showing products exported by Crafters shop

INTERPRETATION

From the above pie diagram it is clear that the shop exports more than

50% of handicraft products in the market. The second most selling productsare furniture which is manufactured by them.

6. TOTAL LABOURERS

Table no.6

55%

15%

25%

5%

SALES IN %

HANDICRAFTS

ANTIQUES

FURNITURE

WALL HANGINGS

Products Sales In %

Handicrafts 55%

Antiques 15%

Furniture 25%

Wall Hangings 5%



18

Year Skilled LabourersUnskilled

Labourers

2009-10 115 45

2010-11 126 66

2011-12 140 80

Chart No.6: A comparative 3-D cone diagram showing classification of

labourers on the basis of their skill

INTERPRETATION

From the above graph we can see that skilled and unskilled labour go hand

in hand. So it is necessary to give training and improve the efficiency of

unskilled labours in order to attain more efficiency to compete in the

market.s

0

50

100

150

2009-102010-11

2011-12

115 126 140

4566 80 SKILLED

LABOURERS

UNSKILLED

LABOURERS



19

7. PROCUREMENT OF RAW MATERIALS

Table No.7

Source of raw materials Contribution

Tanjore 35%

Rameshwaram 20%

Rajasthan 25%

Local Market 30%

Chart No.7: A Pie Chart depicting the contribution of raw materials from various

sources

INTERPRETATION

From the above graph it is clear that the procurement of raw materials ismore from Tanjore as one of their most selling products are Tanjore

paintings. 30% of raw materials are procured from local markets. 25% of

raw materials comes from Rajasthan and only 20% is obtained from

Rameshwaram.

35%

20%25%

30%

Contribution

Tanjore

Rameshwaram

Rajasthan

Other locations



20

8. ARRIVAL OF CUSTOMERS IN CRAFTERS SHOP

Table no.8

ARRIVAL OF CUSTOMERS

LOCAL PEOPLE 40%



21

NATIONAL 20%

INTERNATIONAL 40%

Graph no.8 showing arrival of customers to crafters shop

INTERPRETATION

The above diagram shows that foreigners as well as local people are more

interested and are looking forward for traditionally handmade handicraft

products. This indicates a high potential for the development of a traditional

handicrafts markets.

9. DEMAND FOR GOODS IN CRAFTERS SHOP

Table no.9

DEMAND OF PRODUCTS (TOP 5 OF THE SHOP)

TANJORE PAINTINGS 40%

40%

20%

40%



LOCAL PEOPLE

INTER-STATE

INTERNATIONAL



22

URULY 10%

MARBLE ITEMS 20%

KERALA ARTIFACTS 10%

OLD KERALA BRONZE MASK 20%

Graph no.9 showing demand for top 5 products

INTERPRETATION

Among the top five products of the „Crafters‟ shop, it is clear from the above

diagram that Tanjore paintings are the most selling one. Marble items and

old Kerala bronze mask shows normally good demand whereas Uruly and

Kerala artifacts have only 10% demand compared to others

CHAPTER-4

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS

The study is done on the basis of SWOT Analysis.

TANJORE

PAINTINGS

40%

URULY

10%

MARBLE

ITEMS

20%

KERALA

ARTIFACTS

10%

OLD KERALA

BRONZE MASK20%

Chart Title



23

Strengths

• Cultural heritage and tradition

• Growth in tourism

• Established Skill

• Potentially large pool of workers

• Growing community interest in

Handicraft development

• Low capital investment

Organized knowledge

Weaknesses

• No unique skills

• Inefficient training

• Tourism operations not linked to

Handicrafts

• Lack of designing marketing strategy

• Projects lack vision, not businesses

Oriented, lack adequate funding, have no

Business or marketing plan and are

Running on a “shoestring” budget

• Lack of awareness of international

Standards by many players in the market

• No access to capital



24

• Lack of specialization

Opportunities

• Cultural heritage to draw from

• Large pool of skilled and unskilled

Labor

• Growth and investment in tourism

market

• Rising appreciation for handicrafts by

consumers in the developed

countries

• Large discretionary income at

disposal of consumer from developed

countries

Threats

• Competition of other handicraft products

• Irregular and expensive inputs and

inconsistent availability

• Better quality products produced by

competitors

From the above we can also infer about the factors which helped in

the export growth of Indian handicrafts industry. They are

Rising demand of handicrafts in the western countries like US and

Europe.



25

Foreigners attaching more prestige value to antique handicrafts.

Emergence of E-Commerce and Internet.

Though the global recession has hit the exporters adversely they are

performing well in the domestic economy.

The company shows

SUGGESTIONS

The Crafters shop must change their marketing strategy and device a

new marketing strategy to stay competitive in the market.

It must make a study on the taste and preferences of the consumer

and thereby make product according to their expectations with

affordable prices.



26

The government should draft new guidelines to provide more

subsidies to the handicraft manufacturers and seller‟s expenses with

revenue in the off season and peak season.

Another problem which the Crafters shop faces is the lack of skilled

labours. Therefore the shop must give adequate to communication

and marketing trainings to enable them to deal with the foreign

customers in a better manner.

The Crafters shop must undertake enough strategic planning inorder

to take decisions regarding the expansion and diversification

program.

Central government must frame special incentives for handicraft

sector in the form of insurance and credit packages from the financial

institutions.

CONCLUSION

Presently handicrafts are being considered as vocational media and it

is also opted for style statement and the leisure pursuit. Looking at the salestrend of the data collected we can see a distinct growth in the case of the

„Crafters‟ shop but on the other hand looking at the potential of the market

this growth is not satisfactory. Moreover the sector is still reeling under the

pressure of recession and is yet heave a sigh of relief.



BIBLIOGRAPHY

Web sources

www.crafters.org

www.yahooanswers.com

www.wikipedia.com

Published Sources

Author: Dilip and Amith kumar- Project Management, Kalyani

publications.

Business Studies XI- SCERT (State Council of Educational Researchand Training)

EXPORT STUDY OF HANDICRAFTS

Documents

Transcript of EXPORT STUDY OF HANDICRAFTS