Success at the Intersection of Globalization and the Internet
E-commercehas long been hailed as a means of providing sustainable livelihoods toartisans in developing countries. Historically, these artisans havemarketed their wares directly to local consumers, tourists and toexport markets. To reach these global markets, local artisans have hadto work with middlemen who mark up the prices significantly, leavingthe local producer with only a fraction of the profit. Over the pastdecade, however, a number of initiatives have begun to harness ICTs to give artisans a competitive alternative to this exploitative system.
The most exciting and useful of these tools that I’ve found is CatGen, an open-source e-commerce platform created by PEOPLink.I had a chance to hear Dan Salcedo, founder of PEOPLink, talk about hissoftware yesterday at USAID. Based on the information presented, CatGenhas proved to be a great success.
PEOPLink launchedthe first online crafts catalog in 1995. Although financiallysuccessful, it’s impact and scalability was limited. Realizing that itmade more developmental sense to have the artisans themselves managetheir info, the company released its first version of CatGen in 2000.Now in its 4th revision, the software ?enables any enterprise anywhereto create its own web catalog. It operates off-line for low bandwidthsituations and generates catalogs with many sophisticated features suchas credit card payments via PayPal, and ability to print paper catalogsor burn them to CDs.?
Although the CatGen client can upload anartisan’s catalog of products to any low cost server, for $100/yr theycan host their catalogs on the CatGen server. For their extrainvestment, artisans receive search engine optimization (meaning ahigher placement in Google searches), web traffic statistics, and theability to participate in searchable marketplaces. By increasing thenumber of potential customers reached, these extra features may in fact pay forthemselves.
Dr. Salcedo mentioned a couple of lessons he?slearned over the years. First, the key to the successful use of CatGenis having a local partner who can provide technical support, businessassistance and training. He likened CatGen to the ?brain? of a livingsystem; without the arms, legs, and other vital organs, the brain willdie. Telecenters can offer some of these support systems, and in turnhelp improve their own financial viability. Second, the application canbe useful in even the most remote areas. He shared an exampleof an entrepreneur that set up his own successful e-commerce businessusing a solar-powered laptop and a cellphone for connectivity. Finally,to reduce shipping costs, artisans use the ?LIBIBO? method: littleboxes inside big ones. By shipping orders in bulk once a month,transportation costs can be reduced by as much as 80%.
What?snext for PEOPLink and CatGen? The organization has tied up with eBay,which plans to launch its own Artisan Marketplace within a few months.PEOPLink will act as an ?infomediary?between the artist and eBay, helping artisans post their items to theonline auction site and increasing trust in the transaction by theconsumer. The goal is to have 13,000–15,000 artisans selling throughthe site by the end of 2006.
Most interestingly, the softwareis now also being used by independent artisans in the US! Another greatexample of a service designed for the BOP that also proves useful intop-tier markets.