I was recently in Geneva to attend a meeting that discussed the experience of growing e-commerce in developing countries. The meeting was organized by Friedrich-Ebert-Stiftung (FES) Geneva, a non-profit organization that works in the areas of trade, development and human rights.
There were representatives from countries such as Cuba, the Dominican Republic, El Salvador, Panama, Guatemala, Peru, Mauritius, Trinidad and Tobago, Costa Rica, Ecuador and Venezuela. The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (Unctad), too, sent their representatives. Among the concerns raised at the conference was the gradual shift of trade in developing countries to online channels—areas in which these countries lag.
I am no expert on e-commerce and cannot speak on its legislative, regulatory or policy aspects. Yet, I guess the reason they invited me was not just to know about e-commerce issues in developing countries, but also to know how connectivity, access, digital literacy and mobile penetration could help expand e-commerce activities.
The nations mentioned above need to lobby the WTO so their businesses, too, can benefit from this shift.
Ironically, similar discussions on how technology-driven e-commerce can help small town communities and micro-business clusters based on traditional skills are conspicuously absent in India. It was, therefore, heartening to note there are Latin American countries that are concerned for the right reasons.
Unctad has published a report called Information Economy Report 2015: Unlocking the Potential of E-commerce for Developing Countries, in which India finds mention only in a few places. “It is not that not much is happening in India in the e-commerce sector, but it is so hard to get good data from India, and that’s one reason we don’t have much of India in the report," Unctad representative Torbjörn Fredriksson told me.
At the meeting, I shared a homegrown model on how a connected micro-enterprise cluster can be nurtured into a digitally enabled cluster, and how such connected and broadband-enabled traditional skills-based clusters could change the entire business ecosystem, with e-commerce perched like a crown at the top.
Chanderi is a cluster of about 3,500 weaving households in Madhya Pradesh that has been involved in weaving fine silk fabrics, including saris, for several centuries. It is just one of India’s estimated 545 traditional handloom weaving clusters and 2,000 traditional skills-based clusters.
These clusters suffer from apathy, exploitation by middlemen, poor market reach, bad health and education facilities, lack of alternative livelihood, poor civic amenities, broken government infrastructure and unfulfilled promises. However, all such clusters have one thing in common: they are populated by enterprising people who understand the meaning of profit and loss.
When I shared with our Latin American friends and Unctad how the fortunes of Chanderi changed in three to five years, they told me that they wanted to replicate the experience in their countries. I pointed out that the major change came from widespread connectivity, availability of Wi-Fi on demand, and connecting schools, shops, banks, offices, post offices, health centres and all those micro-enterprises to the Internet. Today, there is a dedicated centre where all silk fabric designs take place digitally and on machines by the weavers themselves, rather than on sheets of paper. Even big businesses and traders get their designs done from this digital design centre by paying a fee.
Products featuring mesmerizing weaving designs are available at chanderiyaan.net, an e-commerce portal. However, the real story is that most of the logistics related to photographing products, uploading them online, managing customers and couriering goods are all done by members of the local community with little outside intervention. According to a study by the Indian Institute of Technology, Kharagpur, Chanderi’s turnover from the weaving cluster has tripled simply by removing the information asymmetry.
The clear message is that each and every cluster in the country that can be classically defined as a traditional skill-based cluster could adopt a holistic approach to meticulously integrating digital tools and connectivity in each segment of the ecosystem and enjoy the story of a sustainable economic and cultural transformation.
While I hope that the Chanderiyaan model could be replicated across all weaving clusters of the country and perhaps several Latin American countries, too, we at the Digital Empowerment Foundation have our task cut out to replicate the model in at least three more clusters. Work has now started at Barabanki in Uttar Pradesh and Bargarh and Nuapatna in Odisha.
Osama Manzar is founder-director of the Digital Empowerment Foundation and chair of the Manthan and mBillionth awards. He is also a member of working group for IT for the masses at the ministry of communication and information technology. His Twitter handle is @osamamanzar.