The handicraft sector is a vital component of India’s rural economy, serving as one of the largest non-farm employment generation activities in the country. Estimates suggest that India is home to 6.8 million artisans ( handicraft census, 11th plan) that contribute US$ 3.39 billion to handicraft exports. Despite these noteworthy statistics, the handicrafts industry in India faces stiff competition from global players and currently accounts for only 4-5% of the global market share. Indian artisans face a range of challenges in terms of design upgradation, product innovation, seamless delivery of products and access to digital markets and there’s a dearth of data backed literature to highlight the magnitude as well as intrinsic relationships between these needs and an artisan’s business profile.
This study by CATALYST AIC aims to understand the key challenges the Indian artisanal communities face in their effort to increase production and enhance the quality of products created for the global market. The sample comprised 874 artisans from 22 districts across Rajasthan and Uttar Pradesh. Methods of convenience sampling were followed where the sample has been derived from resources provided by Catalyst AIC partner organizations working with artisans at the grass-root level in these states.
Women are highly represented in our sample (75% of the respondents are women), due to their substantive presence in the rural handicrafts sector, especially when it comes to artisans working with grassroots organizations. Overall, 84% of respondents were business owners, while 15% of the sample consisted of salaried/wage workers at various business enterprises. Additionally, the median age of the handicraft businesses in our sample is 13 years.
Insights from the study
- Nature of business activity
Overall, 77% of the businesses were not registered, despite 58% of the businesses operating for more than 10 years. There’s a stark gender divide when it comes to the informality of businesses among the artisan community. 84% of businesses run by female entrepreneurs were not registered, as compared to 52% of businesses run by men. Thus Women-run businesses are disproportionately affected and miss out on digital marketplace opportunities, access to finance etc. as they are less likely to have the necessary government registration documents.
Focussing on the type of business, the majority of these (89%) were home-based businesses, but only 20% of these home-based businesses were registered with the government.
Women-run businesses have a majority of their set up being home-based businesses (80%) as opposed to male-run businesses which is only 19%. A study by LEAD at Krea University on Women home-based businesses professed that this narrative largely plays out as women face barriers such as mobility constraints and bear a disproportionate burden of unpaid care work.
- Smartphone access
GSMA’s Mobile Gender Gap Report 2020, reports the gender divide in access to mobile phones to be at 20% wherein men are more likely to own mobile phones than women.
49% of the sample had sole access to a smartphone and the remainder had access to a feature phone with buttons (Smartphones are considered for this analysis as it is typically used to access online digital portals, unlike feature phones). Out of which, 96% of the men from our sample owned their smartphone, but this number almost drops to half in the case of women artisans (47%).
Ecosystem players are recommended to develop ‘multiple accounts feature’ on their digital platforms that are marketed for these artisans. This is based on the results from our survey which points to the practice that artisans (especially women) access a mobile phone and its internet features through intra-household sharing of mobile phones. Studies conducted by Dalberg with IWWAGE and LEAD at KREA University also suggested this as a part of their design principles for women users based on the fact that UI features should allow for ease of discovery of content relevant for women who may not be primary users of the phone. This feature of enabling the opening of multiple accounts on the same mobile phone would be extremely relevant in order to bring all artisans in one family into the fold of the digital ecosystem.
- Internet and connectivity challenges.
96% of respondents have access to a stable source of electricity connection and 94% of respondents stated that they have a satisfactory level of phone network connectivity. When it comes to operational infrastructure, there is no major gender divide – both men and women have similar levels of access to electricity, network and the internet.
Beyond connectivity, ecosystem players should consider consistent connectivity – More than 96% of artisans connect to the internet through personal data packs that would require constant top-ups while only 1% of the artisans used a stable WiFi connection to access the internet). Ecosystem players should take into consideration the low bandwidth of the mobile phones while developing appropriate mobile phone applications and web-based applications for this target audience.
Additionally, overall only 33% of our respondents stated that they did have an email account. When disaggregated by gender, only 25% of women said they have access to an email account. The number almost doubled to 54% in the case of men. Ecosystem players must take this factor into consideration, reduce dependency of account formation on the availability of an email account, and replace the email account feature with a two-factor authentication process while looking to create inclusive digital platforms for these artisans.
- Smartphone application knowledge
Examining the usage patterns of various mobile applications and their features, we find that while 96.8% of respondents were comfortable using the typical phone and messaging (SMS) application on their phones, this percentage dwindles down as the complexity of the features increases. . Only 42.6% of the artisans were comfortable using their phones for messaging through applications like WhatsApp and Telegram and among the users of these applications, 82% of them knew how to upload and send photos from these platforms. 46.4% of respondents knew about video-based content and were able to find and access this content, and only 20% of the sample is comfortable with using social media platforms. Only 7% of the artisans are currently using and accepting payments through digital payment applications.
Analysing mobile applications knowledge through a gender lens, both genders have almost equal usage of basic calling and SMS features on their phones. But the men are more familiar with apps like WhatsApp (62.33%) compared to women (36.23%). This lower usage can be attributed to the fact that in the case of smartphones, more than half of the women get access through shared ownership where the concern for privacy constrains their desire to use such messaging platforms.
In addition to providing phones and means for digital communication to the artisan community, the digital readiness among the artisans needs to be supported by multiple targeted interventions in order to scale their businesses. But, there is a silver lining to this. In several cases, it is highlighted that the children of the artisans send the messages on WhatsApp to the potential buyers or relatives to negotiate a sale, or post pictures on social media platforms and on e-marketplaces and, most importantly, they help the artisans with digital payments. Considering the importance of the children and their role in facilitating digital transactions for their parents (the artisans), future endeavors by ecosystem players (Development community, Artisan collectives and communities) should look to not only enhance digital readiness capabilities among artisans but also include training their children (Adolescents in particular).
- Online sales and Customer-centric user interface
Our study results noted that 98% of the artisans have never made a sale online (digital platform, e-commerce websites, facebook or whatsapp groups). Common issues cited were: 22.3% stated that their inability to understand and comprehend English hindered their participation in online platforms (as most platforms are in English and not in their local language), 28% referenced their inability to comprehend the protocols laid down by the online platform (this includes asking the artisans to detail and list all their products, materials used, design name and price) and 13% stated that they were unable to understand the paperwork and registration requirements for the platform to recognise them as sellers.
The far greater challenges are the operational hurdles that most artisans face: 57% of the respondents stated that they need to be taught how to click and upload photos, 60% stated that they needed help navigating through the various features of the platform, and 40% of them stated that they needed assistance to file the paperwork necessary to register themselves on the platform itself. Furthemore, it’s interesting to note that a higher percentage of women asked for assistance in clicking and uploading photos while the case was reversed when it came to assistance in operating the application – Men requested for more operational assistance, compared to women. This can arise from the fact that more women are considering clicking and uploading as a first major hurdle to sell products online.
Taking into account the lack of digital skills and literacy amongst the artisan community, these aspects should become an essential part of any training program imparted. This is further supported by findings from our study that states that among the people who have previously received any training to sell online, only 0.06% artisans were able to navigate the application with operational ease.
- Desirability to learn designing and skilling programs
92% of the artisans have expressed a desire to learn designing through online videos or live classes. The respondents stated that they would prefer live classes, as opposed to digital/online classes so that they have the option to ask questions and interact with others in the class. This willingness to learn is similar across both men and women artisans. As regards the remaining 8%, across men and women, time constraints and inability to understand the digital medium restrict them from aspiring to learn through such training programs.
- Decision making and intra-household bargaining power among women
Over 66% of the women respondents stated that they have autonomy when it comes to the decision making regarding small purchase decisions. 72% of the women respondents believed that women should have the right to buy and sell their products in the market without their husbands’ approval.
Additionally, in 50% of the cases, decisions regarding how much to save in the household are either taken by the woman herself or are jointly taken along with the spouse. This notion that women are expressing intent in taking control of business decisions of buying and selling products and decisions on family expenses is greatly welcomed, pointing towards the fact that these women are breaking away from generational social stigma and social constructs. Digital solution providers must respond to this by designing solutions customised for women.
- Access to finance and asset ownership
Among a few things to keep in mind is creating gender neutral policies around loan disbursal and its subsequent collateral requirements. Currently, traditional institutions require the loans to be co-signed by a male relative/husband and require separate collaterals in the name of the women prior to disbursing loans, or they disburse cheaper loans to women borrowers. This notion is extremely problematic especially when 77% of our women respondents claimed that they did not have assets separate from their spouse and family and were half as likely as men to access formal loans (8.25% in case of men against 4.44% for women).
Our study also enquired about the intended purposes that women artisans are keen to use their savings for. In 65% of the cases they stated that they will use these savings for household uses, 55% for personal expenses and 47% for their child’s education. While on the other hand, only 4% expressed interest in using their income to acquire more land, 10% stated that they wanted to use it to repay old debts and 11% stated that they wanted to use it to expand on their current business activities.
These findings add to the existing literature that additional income earned by women is directed towards their children as opposed to expanding their own business activities. From our study the women artisans categorically target their income towards family/household expenses. Rationale behind this phenomenon could be twofold – firstly, most of the women view their artisanal work as supplementary income hence they do not see relevance in targeting capital to grow this business (this narrative is more likely, given some of the women we interviewed reiterated the notion that they view handicrafts as supplementary to agriculture which was their primary income source), alternatively women are expected by society to play the role of caregiver and are forced to direct their income to their family due to societal expectations and gender norms.
Digital technology is the future, however, at present Indian artisans are far from embracing the benefits that it can bring such as harnessing digital marketplaces to sell products online to a larger target audience. In rural areas, much of the operational challenges (such as access to electricity and network connectivity) have been overcome, but smartphone accessibility among rural artisans still needs a push. It is important to note from our study that even among those who had access to smartphones and the internet, that access is not getting translated into enhanced or higher usage of key digital applications.
Beyond lack of digital skills, the biggest barrier to growth that the artisan community faces is the lack of government registration which restricts their ability to access any private-led or state sponsored assistance. The need of the hour from ecosystem players (both private and the government) is to enforce mass awareness campaigns, training sessions and other non-monetary incentives that facilitate the women artisans to avail the benefits of registering their businesses. Considering the low registration numbers in our sample, it becomes imperative to implement massive awareness campaigns among artisans to facilitate them to avail the benefits of government registrations. Such formalisation will in-turn help them in accessing various digital commerce marketplaces.
On a positive note, almost half the population knows how messaging and video streaming applications work, more than 90% of the women are willing to upskill themselves by digital means and their children can act as a valuable support in enhancing their interaction with digital means. Furthermore, it’s encouraging to witness the desirability of women artisans to participate in markets freely emerging out of enhanced autonomy and intra-household bargaining power. Thus, in addition to an intrinsic push from the artisan community to learn and build on their digital skills, ecosystem players (inclusive of policymakers, digital application creators, leaders of the artisan community, Mobile network operators, formal lending institutions and the development community) must focus on nudging, developing sustainable solutions for and bringing one of India’s oldest homegrown industries, to the forefront of innovation and connecting them to buyers across the world.