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Global Market Assessment for Handicrafts

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Global Market Assessment for Handicrafts GLOBAL MARKET ASSESSMENT FOR HANDICRAFTS VOLUME I FINAL DRAFT JULY 2006 This publication was produced for review by the United States Agency for International Development. It was prepared by Ted Barber and Marina Krivoshlykova of Development Alternatives, Inc. GLOBAL MARKET ASSESSMENT FOR HANDICRAFTS VOLUME I FINAL DRAFT The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. FOREWORD This paper was written as part of the Accelerated Microenterprise Advancement Project (AMAP) Business Development Services Knowledge and Practice (BDS K&P) research initiative. The AMAP BDS initiative’s major objective is “integrating micro and small enterprises into productive value chains to create wealth in poor communities.” The research draws on experience and insights from: • Interviews with leading handicraft buyers in the United States, the European Union, and the Caribbean, including importers and retailers currently sourcing from Haiti, those who have done so in the past, and those who source handmade products from other destinations; • Interviews with market experts, such as product development consultants, designers, enterprise development consultants, and marketing specialists who work with handicraft producers in developing countries; • Discussions with market experts and USAID at a roundtable conducted in Washington, D.C., on April 12, 2006; and • Existing literature on the handicraft market and home accessory industry. This study provides an overview and analysis of the global market for handicrafts and the key trends that affect producers in developing countries, with the ultimate objective of offering practical recommendations for the Haitian handicraft sector. This paper represents Volume I of the Global Market Assessment for Handicrafts study and includes Chapters I and II. Chapter I covers the global market for handicrafts and key industry trends and Chapter II focuses on the end-market opportunities for Haitian products. The document is accompanied by a video: Handmade in Haiti: The Perspective of Global Buyers, which presents an overview of the U.S. market for handicrafts and buyer perspectives on Haitian handicraft products. Volume II of this study (Chapters III–V), to be prepared jointly by DAI and ACDI/VOCA, focuses on the supply-side constraints to Haitian handicrafts and offers recommendations for the development of a competitive strategy. This paper benefited from the intellectual guidance of Jeanne Downing at USAID and was prepared under the technical supervision of Lara Goldmark of DAI. Annex I lists the many experts and buyers kind enough to share their time with the authors. In addition, the following roundtable participants deserve special recognition: Emiliano Duch, Randy Eller, Karen Gibbs, Colleen Pendleton, Guillermo Ricarte, and Alden Smith. FOREWORD III TABLE OF CONTENTS I. THE GLOBAL MARKET FOR HANDICRAFTS 1 DEFINITION AND ROLE OF HANDICRAFTS ........................................................................................1 COMMONLY ACCEPTED DEFINITIONS ..............................................................................................1 Challenges Associated with Definitions and Data Collection.............................................2 THE GLOBAL MARKET FOR HANDICRAFTS......................................................................................3 Players and Channels...........................................................................................................8 Retailers...............................................................................................................................9 Recent Changes and Nuances in How the Distribution Channels Work...........................13 Price Segments ..................................................................................................................15 Key Import Markets ..........................................................................................................17 Key Export Markets ..........................................................................................................18 TRENDS FOR THE UPCOMING DECADE ...........................................................................................21 Impact of Globalization.....................................................................................................21 Rapid Changes in Market Trends......................................................................................21 Towards Contemporary Minimalism ................................................................................22 The Push to Differentiate ..................................................................................................23 …Channels Keep Getting Get Shorter ..............................................................................26 Growth in Online Sales .....................................................................................................27 Where to, Trade Shows? ...................................................................................................27 Heightened Awareness of Environmental and Social Concerns .......................................28 The Future Competitive Landscape… is in Asia ..............................................................29 II. OPPORTUNITIES FOR HAITIAN HANDICRAFTS 31 HAITI AND THE MARKETPLACE......................................................................................................31 Changes in the Landscape .................................................................................................32 Purchasing .........................................................................................................................34 Key Attributes ...................................................................................................................38 HAITI: VIEW FROM THE MARKETPLACE.........................................................................................41 Background .......................................................................................................................41 Products.............................................................................................................................42 Demand .............................................................................................................................47 Buyers on Haiti..................................................................................................................48 Haitian Diaspora................................................................................................................53 CONCLUSIONS.................................................................................................................................53 BIBLIOGRAPHY 57 ANNEX 1: EXPERTS INTERVIEWED 1-1 LIST OF TABLES AND FIGURES V LIST OF TABLES AND FIGURES Table 1 Home Accessory Market Segments.....................................................................................4 2 Price Segments for Handmade Goods...............................................................................15 Figure 1 Handicraft Market Channels ...............................................................................................8 2 Dominant Handicraft Market Channels.............................................................................33 Images in Chapter I Country Originals, Inc., Spring/Summer 2006 catalog. Country Originals, Inc., Spring/Summer 2006 catalog. Julio Balan, Croix des Bouquets, Haiti, 2006. Photo by Ted Barber. Country Originals, Inc., Spring/Summer 2006 catalog. Country Originals, Inc., Spring/Summer 2006 catalog. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. FODAZE Gallery, Jacmel, Haiti, 2006. Photo by Ted Barber. FODAZE Gallery, Jacmel, Haiti, 2006. Photo by Ted Barber. Country Originals, Inc., Spring/Summer 2006 catalog. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Country Originals, Inc., Spring/Summer 2006 catalog. Swahili Imports, www.swahili-imports.com Country Originals, Inc., Spring/Summer 2006 catalog. FODAZE Gallery, Jacmel, Haiti, 2006. Photo by Ted Barber. Aid to Artisans, www.ata-haiti.org Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Aid to Artisans, www.ata-haiti.org Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Stephanie Armand, www.sudnco.com/globalframe.htm Dwelling LLC, http://dwellingllc.svwh.net/enterframe.html Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Artisans of Haiti, Aid to Artisans, 2003. Photo by Chantal Regnault. Aid to Artisans, www.ata-haiti.org EXECUTIVE SUMMARY Handicraft production is a major form of employment in many developing countries and often a significant part of the export economy. With increased globalization, however, products are becoming more and more commoditized, with artisan producers facing
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