This bootstrapped online marketplace is helping artisans sell their products under their own brand name
Despite increasing internet penetration and affordability of mobile phones, the rural crafts sector is still far from benefiting from globalisation.
To empower these artisans with technical knowledge to market their products online, and ensure the profit from sales directly go to their families without any middlemen, 35-year-old Kailash Tulsi Gajara startedin 2018 in Mumbai. It is an online marketplace for artisans and organisations to sell authentic handmade products globally under their own brand name, ensuring customers a quality purchase at a fair price.
“We make sure artisans have enough technical knowledge to market their products digitally. Our team personally visits artisans, makes their stories, documents their craft, and at the same time checks the authenticity of the product. We provide complete product cataloging for free, which includes product photography and writing product descriptions and specifications. This helps them create their own brand and get the due credit for their work,” says Kailash.
The Megastores team
“In the last 400 days, our team has met 350 artisans in 50 villages across four states, on-boarding 250 artisans, with 50+ crafts resulting in more than 4,500 authentic products available for sale online. NGOs like Shrujan, Khamir, Qasab, Sewa, Kalarakshya, and VRDI have also collaborated with us,” says Kailash.
“Every purchase on Megastores ensures our culture is preserved, and continues to nurture these age-old traditional craft forms along with promoting sustainable living,” he adds.
The initial groundwork
While doing his initial research for the startup, Kailash realised the handloom industry is the second-largest employment provider for the rural population in India after agriculture. He found through visiting different villages and talking to different people that there are over 200 million artisans in India, but their average monthly income was less than Rs 5,000.
“In the past 30 years, more than two million artisans have quit their ancestral craft work,” he says.
After digging further, he also realised the artisans were mostly old, and the new generation was not willing to take the craft forward as it just didn’t have any monetary benefits.
“Artisans cannot start a physical retail store in cities, where most of their customers come from, because it is unaffordable for them. They are currently only able to market through exhibitions. Thus, there is no scale, and the market is also filled with middlemen,” explains Kailash.
“We also realised these artisans needed hand-holding to overcome these problems with the use of technology. Thus, we started building an ecosystem to connect and bring all the stakeholders involved in the craft industry using technology, and Megastores was born,” says Kailash.
“We also found that various organisations are working for the development of the craft sector, but are doing it individually, thus resulting in duplication of efforts, broken communication, and lesser growth or scale. By bringing NGOs, brands, and the government on a single platform, we have created an ecosystem to solve these problems and ensure fruitful collaborations,” says Kailash.
Prior to starting up, Kailash was working for the likes of VMWare, and held leadership positions in companies like AIS. He also founded Atulsia Technologies, an enterprise software development company. When the idea of Megastores came, he simultaneously started working on it in 2015, but after all the market research and work, he launched it in 2018. Currently, Megastores has 25 full-time employees.
The team, however, faced two major challenges. One was servicing remote areas, and the other was convincing the artisans to market their products and sell online using technology. To service the remotest pin-code, we have successfully been able to establish trust points - nearest pickup and drop point easily accessible to both the artisan and the courier partner.
“To get the artisans comfortable with selling online, we do workshops and provide merchant onboarding service free of cost. We also train the younger generation from their family as they are tech savvy,” adds Kailash.
According to IndianRetailer.com, the gifting and niche ecommerce market in India is currently pegged at $30 billion, of which $400 million could be attributed to the digital space. When segregated into separate categories, the share of festival gifting stands at $7.5 billion, personal gifting accounts for $20 billion, and corporate gifting is at $2.5 billion.
Today, platforms like Chumbak, BigSmall, Tjori, and others are offering quirky products like bobbleheads, charms, cauldron mugs, and other memorabilia. There is also Bengaluru-based Zwende, which is focussed on creating a niche for artisans.
Explaining what sets them apart, Kailash says, Megastores is artisan centric. He adds that they work directly with the artisans on-ground, ensuring an authentic buy to the customer at a fair price.
The service charge on sales is the main source of revenue for the startup, which ranges from 8 to 30 percent as per the type of the merchant. Currently, Megastores charges eight percent as commission on sales for the artisans, and listing and cataloging is free. For government organisations, NGOs and brands, it charges up to 20 percent for the service and also for the cataloging.
“Though we are currently focussed on pan India merchant onboarding, since the launch of the platform in November 2018 till date, we have seen more than 25,000 visitors with over 1,000 paying customers, with quarterly increase in sales by 25 percent,” says Kailash.
Revenue and future
Currently bootstrapped, Kailash says, building a full-fledged marketplace from scratch can take up to 12-24 months, costing around Rs 1 crore. While running the business, covering all the operational expenses like technology, marketing, and sourcing, one must consider a minimum budget of Rs 3 lakh per month.
For every sale, marketplaces get around an average margin of 15-20 percent. “Most have a very high sales volume and a very lean operation that is highly efficient. The key variables that one can control are: products, pricing, sourcing, sales channels, merchandising, and promotion. All are important in developing the optimal gross margin,” says Kailash.
The team is looking at 10X customer acquisitions by the end of this year, with more than 1,000 artisans from 12 states in India, and reaching up to 40,000 SKUs. The team aims to start international shipping in the next few months with better collaborations to increase wholesale (B2B) orders.
“In the coming years, we plan to focus on our platform and infrastructure upgrade that will also include enhancements to our 3D and Augmented Reality(AR) technologies. Having a physical concept store and an annual flagship event is also part of our future plans. Our vision is to become the world’s number-one destination for authentic handmade products, and so our long-term plan also includes onboarding artisans from all over the world,” adds Kailash.