GoCoop: supporting rural handicraft producers in India through good times and bad
What is Gocoop?
The online marketplace Gocoop.com gives rural handloom weavers’ cooperatives across India a platform to sell their products at market prices, directly to buyers across the world. Launched in 2014 after 2 years of behind the scenes efforts, today the site represents over 50 clusters of production across the country consisting of 350 cooperatives or master weavers. They represent the majority of GoCoop’s sellers; the rest are individual weavers, other craft-based social enterprises and NGOs. Since founding the platform has brought “40,000+ products to 50,000+ consumers across the world”
Handicrafts and related sectors are big business in India. CEO and managing director Siva Devireddy estimates that the handloom and handicraft sector in India is about $4-5 billion annually. He adds that there are about 250 million people working in all kinds (not just handloom and handicrafts) in India, forming the backbone of the country’s rural economy.
Video: The story of Siva, created by Google
GoCoop solves an important market failure in India: that rural producers are not informed well enough, or in a strong enough negotiating position, to capture the value of their products. A carpet made locally will be sold at 10 to 15 times the price received by the weaver in the US market. Even within the country it is possible for producers to achieve up to 3-5 times locally practiced pricing. By improving market price transparency, removing layers of intermediaries, GoCoop radically improve the profitability of its Co-ops and other sellers, and the incomes earned by their members.
GoCoop provides the following services to its sellers:
- Workshops on e-commerce and online marketing to co-ops and weavers
- Assistance with photography and cataloguing products, compiling product-related information and instructions online, for free. Each product is tagged and stored with the cooperatives.
- Training and assistance in order handling, quality control, packaging and shipping
- Access to designers who help weavers innovate on product design especially for export houses and international retailers.
- Payment via escrow: once the product is shipped, the bank is informed and the payment is debited to the cooperative or seller within three days.
- GoCoop also provides sourcing services to buyers including designers, brands and boutiques who want to source handmade textiles from India.
Interview with Siva Devireddy, CEO and Managing Director of GoCoop
Photo: Siva Devireddy, CEO and Managing Director of GoCoop
ecomconnect: With India imposing major restrictions on all forms of non-critical commerce due to the COVID-19 crisis, how is GoCoop facing up?
Devireddy: Since early March, we saw a significant short term growth in demand as customers across India turned to e-commerce – probably with some concern about the assumed risks of infection from other forms of shopping. Since mid-March and the effective lock down of all but essential logistics, we are effectively at a stop. So yes, this has had a dramatic effect on our sales and consequently for our producers.
For GoCoop itself we hold very little inventory and our fixed costs are minimal, so we will be able to survive. But the impact on communities throughout India is, of course, something of real concern.
e: What can you do to maintain your business and contribute to the resilience of your sellers?
D: We have no means of replacing the market demand lost to our sellers – but we are in regular contact with them, trying to use this downtime in the most positive way possible. Part of this can be advisory on innovation in design and helping them to work on their inventories and catalogues.
We notice that all things digital are taking a boost in this crisis: people are turning to social media and online communication to stay in touch and inform themselves. It is also the case that, where permitted, e-commerce is making a visible contribution to supplying goods: home deliveries are clearly in very high demand.
It is quite probable that after this, when you add in the potential reticence to resume face to face contact, that e-commerce will have a boom in demand. In any event, we don’t believe that demand will decline over the medium term: even if the overall economy dips, consumers and buyers will turn to online marketplaces such as ours to source products – continuing a trend that was evident before the crisis.
We are also reaching out to prospective suppliers and encouraging them to put their products onto our platform. There are many such potential sellers who do not understand or trust in ecommerce, and we believe that now is the time to reach out to them and explain the importance of being online.
e: How is the COVID-19 crisis encouraging you to think through the use of digital tools and communications?
D: It’s a challenge for us to reach many of these small firms, without being able to physically visit them. GoCoop has always placed an emphasis on meeting with producers and providing training face to face. We are having to use online communications and innovate our use of digital training and coaching. This may mean, for instance, holding an online session on taking photos – which we might otherwise have done in person.
Sales events have formed an important part of the promotional calendar for GoCoop: we normally organise 2 events a month, trying to cover the regions of India during the year – showcasing the work of around 50 artisans at a time. This remains an important part of doing business for us: we would say that it is very challenging in India for these types of goods to be digital only. Customers want to see and touch the fine materials and designs our artisans produce: it’s how they judge quality.
We will have to see how this might change when the lockdown is behind us: but I suspect that the physical market is not going to go away either.
e: What potential is there for GoCoop in international markets?
D: We already export – it represents around 16% of our sales. Key markets are the US, UK, UAE, Australia and Canada. We supply individuals, but the majority is B2B: our biggest customer is in New York.
Our pricing is the same for international customers as it is in India (of course they need to pay transport and duties) but essentially we are offering local prices: which is a tremendous opportunity for retailers in other parts of the world. This is why we are so positive about our potential to grow the business: we have a great value proposition and at the moment our market share is small.
e: what are your concerns about ecommerce if any? Are you hopeful?
D:I was in Silicon Valley in the early 2000’s when ecommerce started to take off. Our dream at that time was that this would be empowering to the small business: a great leveller, opening the potential to develop international business and compete with big firms. We see in any market across the world the world that what happens is that a couple of marketplaces end up dominating: in India that is Flipkart and Amazon. Market domination is the logic of venture capital.
And yet there is space for successful and lucrative smaller platforms, such as GoCoop – when the value proposition to suppliers and customers is so clear. GoCoop is more than an ecommerce platform: we work with our producers to build their skills and help improve their designs and quality, work more sustainably and provide better incomes. We believe that there is an important and growing niche of customers who want quality, sustainably produced products sourced from known producers and delivering an impact that they can see and feel part of.
It’s going to continue to be tough to compete with the major platforms – and we will need to work hard to make our story heard.
Photo: Siva Devireddy, CEO and Managing Director of GoCoop
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