Emithilahaat Business Model Suggestion
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eMithilaHaat is a for-profit social enterprise based in India that helps artisans of traditional Indian art-forms reach a wider audience and sell their artwork. By providing more work to these artists, it aims to preserve the traditional and most famous art-forms of India and improve the lives of men and women solely dependent on these art-forms. Today, many of the traditional Indian art forms are on the verge of extinction, because of which, several traditional artists are living in penury. Given that arts and handicrafts is the second largest employment generator in rural India and that traditional Indian arts embody the highest levels of artistic excellence and have high demand over the world, eMithilaHaat has the potential to breathe new life into the traditional Indian art industry, capture value, and truly impact the lives of thousands of people in the process. But to be able to do so and truly realize its social mission, it needs to refine its existing business model which has some severe shortcomings.
Traditional Business Model
eMithilaHaat sells Mithila Paintings and traditional apparels for women through its own online retail channel to customers. It employs a distributor business model as it sources these paintings and apparels from collectors/middle-men and then resells them to its customers online. Although its business has gained traction and has revived people’s interest in handmade Mithila paintings, its present business model has problems at both the supplier and buyer end.
At the supplier end, currently, eMithilaHaat deals with only a few collectors who provide them with the required number of paintings each month. These collectors make money by charging large commission on every sale transaction. Since the middlemen eat into artist’s earnings, the artists are not getting their due and are forced to live and paint in poverty. Under this arrangement, only a small amount of money reaches the artists, which in many cases is insufficient for them to make ends meet. Although this situation is much better than before when there was absolutely no work for them, artists, especially from the young generation, even now, are reluctant to take-up traditional arts as a career as they are finding far more lucrative employment options in other industries. Further, middle-men’s commission jacks-up the prices of these handmade traditional paintings and apparels which are competing against commercially and machine-made cheaper alternatives available in the market. Given that Indian consumers are extremely price sensitive, many customers prefer to buy the cheaper machine-made alternative, if the handmade version of the article is expensive only by a few hundred rupees. Thus, sourcing articles from middle-men instead of directly from the artists is impeding eMithilaHaat’s growth and its ability to capture value from this value chain and realize its social mission.
Another major flaw in eMithilaHaat’s business model is that it sells its paintings and apparels only through online retail. To understand why this is a problem, one needs to understand the 4 main reasons that motivate a customer to buy these articles. First is Hedonism, attraction and the pleasure derived from the art-work. Emotional appeal motivates another category of buyers, who feel direct and pure sensory stimulus – anger, fear, pain etc. Symbolism is another reason that motivates many buyers. It is the translation from the cognitive to abstract based on the interpretation and meaning derived. And finally, utilitarian reasons include possession for status or as home décor. To elicit these feelings in a buyer and motivate him into buying these articles, some level of physical interaction is required initially. Once the initial purchase is made, repeat buying becomes easy and does not require high physical interaction. Thus, its current online retail only sales channel has been unsuccessful in evoking the level of interest required for buying these products and thus needs to be augmented.
Key Drivers & Consumer Trends
The plight of traditional artists and artisans is well known to the entire nation. The art and handicraft industry forms the backbone of the non-farm rural economy in India, even today, when the industry is nowhere near its prime. Given that this industry provides employment many people, there has been a big-push from the government to support the artists and artisans through various schemes and promote their products. For customers, this awareness that traditional artists are living in extreme poverty and that traditional art-forms will soon become extinct has motivated them to buy more traditional products and support these artists. This renewed consumer interest in traditional art-forms to support artists was one of the main reasons as to why eMithilaHaat’s business took off. More than ever before, consumers would like to be associated with brands that are working to positively impact the lives of about 7 million people working in the Indian Arts and Handicrafts industry. Today consumers do not shy away from buying an expensive