Monday, September 6, 2010

Emerging Market Segments and Trends: Part II

Tweak The Supply-side in Your Business Model

Online retail business model is not a new concept. But if you are introducing it in the new market segment with a bit of tweaking with one of the levers, it could be an opportunity worth experimenting!

In India, on one side, there is still a vast scope for plugging in the online retail model in some sectors, while on the other, the concept of 'fair trade products' and the concept of 'go-green' are catching momentum. If you club it with the Fair Trade Products campaign or 'Go Green' campaign, it doubles the worth for testing a well-tried  concept.

Fair trade is an organised movement that helps producers in developing countries get a premium for their products if they follow better social, labour and environmental standards. Indian farmers have been selling their fair trade produce to developed market for years by getting certified by the Fairtrade Labelling Organisation International (FLO) Now the FLO wants to introduce a fair trade label for the Indian market next year. The Spice Board of India is looking to follow the suit with a fair trade label for the domestic market.

Now extend the same philosophy into some particular segments like arts & crafts and/or handmade goods from the folklore. What if you could tweak the supply-side of the online retail model and provide more equitable profit sharing business model with the suppliers and producers [artisans and craftsmen], than give them the bare minimum which is the trend? Include them for a profit-sharing which is higher than just the sustenance level for them. Retailers that have included more equitable conditions for artisans and weavers, such as Fabindia and Anokhi, have done very well in India.

Imagine the scalability of the online retail business model which is inclusive of the fair trade concept! I believe it is enormous. is implementing the same thing. It is about online retailing of all handmade goods. They are including artisans and producers of handmade goods into sharing a better mark-up earned by the sale of the products.

Stay tuned to read my interview with Pallavi Singh Keshri, founder

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