- CASE STUDY - Women entrepreneurs from rural areas in the souvenir business Eastern Croatia/Slavonia Erdut Municipality

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- CASE STUDY - Women entrepreneurs from rural
areas in the souvenir businessEastern
Croatia/Slavonia Erdut Municipality

• JASMINA Ilincic, Director of development
• CODD Civil Organisation for Development Dalj
• RCC - Workshop on Enhancing
• Women Entrepreneurship in SEESarajevo, 1st
  October 2009

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INTRODUCTION ...

• While preparing this presentation, I held a
  meeting (24.09.2009.) with 12 women entrepreneurs
  members of the CODD social enterprise called
  Handwoven souvenirs .
• We discussed main problems, obstacles, solutions
  ...
• The presented findings come from their point of
  view ... from real women at grassroots level.

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What region are we talking about?

• The situation in the post-war Municipality of
  Erdut (8,500 inhabitants living in 4 villages) is
  quite problematic.
• High rates of unemployment, depopulation and
  emigration of people, and low interest of young
  people for life in the rural areas hinder the
  development of this territory, rich in resources
  and tradition.
• But, in such a situation it is sometimes enough
  to identify and initiate ideas that will revive
  the forgotten potential of this region, and
  significantly contribute to the quality of life
  of local people.

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What region are we talking about?

• Many donors and official Croatian institutions
  introduced social entrepreneurship and social
  enterprises as a model for job creation and
  local community development for the social
  excluded a few years ago.
• The nongovernmental association CODD, operating
  in this region since 2002., saw this direction as
  complementary to it's strategic goal of
  empowering rural and marginalised women, not only
  psycho-socially, but also economically.

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What is a social enterprise?

• Any private activity conducted in the public
  interest, organised with an entrepreneurial
  strategy whose main purpose is not the
  maximisation of profit, but the attainment of
  certain economic and social goals, and which has
  the capacity to bring innovative solutions to the
  problem of social exclusion and unemployment.
• (definition by OECD, LEED Programme)

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How did it start?

• A group of women enthusiasts, members and
  activists from CODD, recognized this new
  opportunity in a revival of traditional crafts,
  handweaving on Slavonian looms.
• The idea was, that establishing a social
  enterprise can revitalize the rich culture of the
  Slavonian region, while at the same time promote
  employment and sustainable development.

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How did it start?

• Therefore, 12 women started the CODD-social
  enterprise HANDWOVEN SOUVENIRS with the initial
  help of various donors (Japanese Embassy in
  Croatia, just to mention one) for equipment
  purchase (handweaving looms, sewing machines
  etc.).
• The long-term intention was to form a cooperative
  when the social enterprise develops strong
  enough.

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What was the business idea?

• The business idea was that production of
  handwoven souvenirs can contribute
• ...to the advancement of the region (where rural
  tourism as one of the priority strategic
  directions of the Municipality of Erdut), and
• ...to the employment of rural women.

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Why souvenirs?

• Slavonia, specifically Erdut Municipality, has a
  wealth of high quality traditional handcrafted
  products with a great potential in the tourist
  market.
• This sector is particularly important due to the
  fact that the vast majority of producers are
  unemployed women in rural areas that were heavily
  affected by the homeland war in the 90's.

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Why souvenirs?

• The richness of culture and history has brought a
  wide range of products such as golden embroidery
  or handwoven products.
• The general situation in Croatia is that tourists
  leave with the impression that there is little to
  buy in way of handicrafts, and, at reasonable
  prices compared to
• other tourist destinations.

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What has been achieved so far?

• Women were trained in hadweaving techniques by
  experts from the Textile Faculty from Zagreb.
• They obtained elementary business skills training
  and funds to buy initial raw materials for
  production.
• They obtained some funds for participating in
  exhibition shows and fairs.

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What has been achieved so far?

• At first, the enterprise produced various things
  in order to somehow explore what the market
  want's.
• Bags, rugs, cloth, table cloth, linen, and many
  other products.
• Women linked to the local and regional Tourist
  associations and participated in many fairs and
  events across Croatia in order to promote
  products, gain income and even more important-
  to see which product is the bestseller.

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What has been achieved so far?

• This was done through grants and subventions from
  various donors, who were pushing the female
  social enterprise idea .
• The goal was to get to the market, link to
  souvenir shops or retailers, and continuosly sell
  products which tourists like the most.
• This would leed to the establishment of a
  cooperative which could provide employment not
  only to the 12 women entrepreneurs who started
  the business, but to many others.

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But ... ? Or from theory to practice

• However, women from the Handwoven souvenirs
  enterprise soon discovered that the market for
  these products is diminishing as people turn to
  mass-produced and cheap items.
• There is a limited amount of tourists cruising on
  the Danube where Erdut Municipality is situated,
  but even those producers with centrally located
  shops are having trouble attracting customers
  (mostly Americans) and selling their traditional
  handicrafts.

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But ... ? Or from theory to practice

• Therefore a limited amount of people will buy
  traditional handicraft items.
• Slavonia is not a tourist hotspot and presents
  not the main market for those handwoven products.
  
• In other words, tourism in Erdut Municipality is
  in it's baby shoes and therefore cant be the
  main souvenir market.

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But ... ? Or from theory to practice

• On the other hand, the tourist-rich coast
  (Istria, Dalmatia etc.) is flooded with visitors
  during the summer who have money to spend on
  souvenirs, but Slavonia rarely sees these types
  of visitors.
• IDEA ?
• If they don't come to us, let's get our products
  to the tourists!
• ... how to get to them?

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But ... ? Or from theory to practice --- first
problems

• The women from the Handweaving souvenir
  enterprise are tucked into their villages far
  from the classic tourist destinations and are
  isolated from market information and linkages.
• This makes it nearly impossible for them to
  understand what the market is looking for and how
  to reach it.

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But ... ? Or from theory to practice

• In order to get the products into the right
  hands, women soon discovered that they need to
  modify their products in order to meet market
  trends.
• They must explore new distribution channels to
  get the products out, both on the coast and
  through inclusion in the regional tourism
  activity or souvenir shops.
• Women asked How to know what foreign tourist
  want and how much they are willing to pay?

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Women saID ...

• We have the equipment,
• we have the raw materials,
• we have the neccessary production skills,
• we even have the (right?)products,
• we attended many fairs and promotion events
  (...while we had the money to do so ...)
• but what we don't have is THE RIGHT MARKET and
  the RIGHT TOURIST to BUY our products.

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Main questions ...

• How to get to the touristic hotspots?
• How to get to the right people?
• How to know what foreign tourists want?
• ... if ....
• ... you don't have the money, the means and the
  knowledge?
• Are there any support centers?
• Who can help us?

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Some first conclusions ...

• During this afternoon meeting with women
  entrepreneurs, we came up with some conclusions
  that can bee seen as problems of all rural women
  entrepreneurs

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Issue Some specific problems of rural women
entrepreneurs

• Women from rural areas try to start businesses
  suiting to their resources and knowledge. Most of
  them are limited to food and handicraft products.
  
• Rural women have family responsibilities. They
  have to take care of children and in-laws which
  takes away lots of their time and energy.
• When facing non-support from family members it is
  difficult to concentrate on the business.
• There is the problem of age and educational level
  of rural women.
• Younger women are leaving rural areas.
• Problem of mobility due to traditional values, or
  lack of transport opportunities.
• Location of work (urban versus rural)

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Issue Market awareness

• Some identified problems
• Rural women are unwilling to move beyond comfort
  zone (local community etc.)
• Sometimes they are just unable to move beyond
  their community due to lack of infrastructure,
  lack of transport opportunities, lack of finances
  etc.
• Due to low self confidence they fear to face
  risks and troubles that may come up in a business

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Issue Market awareness

• Some possible solutions?
• Trainings for motivation and self confidence
  building
• Training and assistance in business planning for
  any aspect of the enterprise (production,
  marketing, financial management).
• Encourage participation first in local, and then
  regional and national fairs/events.
• The local level (local authorities, local
  development agencies etc.) should provide
  loans/subventions for start-up activities (for
  example, to cover travel costs for participating
  at fairs, education etc.)

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Issue Market Saturation and Product quality

• Erdut Municipality is a region with very rich
  handicraft tradition ... but is this enough?
• Do we have enough evidence of what the market
  wants, whether local, national, or especially
  international?

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Issue Market Saturation and Product quality

• Some identified problems
• Selling sand in the desert, products that
  already exist in a better/cheaper form
• Rural women entrepreneurs have little info on
  market demand
• The majority of products are still strongly based
  in traditional colors, designs and function
• Inconsistency in product quality (variations of
  raw materials due to imports from other
  countries) Poor packaging and marketing
  materials
• Women expressed frustration not knowing how they
  could produce things that would be purchased.
• There is great appreciation for their work (even
  from donors, embassies, ministries, companies
  etc.), but often little sales.

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Issue Market Saturation and Product quality

• Some possible solutions?
• Support in market investigation and market
  information.
• Expert support to identify niche markets.
• Support to improve product design, quality,
  packaging etc.
• Marketing material, such as brochures, should be
  published in various languages.
• Establish linkage with relevant stakeholders to
  provide additional skills training.

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Issue Competition

• How to avoid the often heard sentences?
• ......I can buy a cheaper souvenir.
• Or
• ......This is to expensive.

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Issue Competition

• Some identified problems
• Flood of cheap imports to Slavonia (from
  handicraft to food) and Croatia in general.
• Products made in China or India are cheap and
  trendy, and, as such, the interest in traditional
  local products tends to die out (to expensive
  etc.).
• High cost of raw materials and inconsistency in
  their supply and quality.
• High cost of the workforce (even though women
  work for minimum wages!). You cant compete with
  Chinese wages.

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Issue Competition

• Possible solution
• Analyses of market
• Move into new areas
• Products must have unique design quality
• Products must have a story attached

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Issue Market Access

• How can rural women, handicraft producers, be
  hooked with clients and other actors involved in
  the market?

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Issue Market Access

• Some identified problems
• To much reliance on family, neighbours or
  previous contacts in local area.
• Women cant run around for marketing,
  distribution and money collection.
• Sometimes middlemen tend to exploit them.
• Little use of market information
• Rural women have less possibilities to enter
  markets such as Istria or Dalmatia no contacts,
  no information about events/fairs, lack of money
  to participate in events, no means of transport
  such as a car etc.

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Issue Market Access

• Possible solution
• Link to retailers interested in products.
• Try to directly hook producer to trader.
• Help set up stands, vending points at touristic
  hotspots.
• Strengthen sales skills, confidence.
• Provide funding for transport and exhibitions.
• Establish webshop.

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Issue Access to finances and Legal registration

• Some identified problems
• Start-up financing for raw materials, marketing
  and other costs is a common challenge.
• Major problem to rural women is liquidity.
• Family is the primary source of finances.
• Most women have never used a credit or applied to
  any kind of subvention.
• For small levels of production, registration
  costs are significant and beyond womens financial
  means. The majority of rural women entrepreneurs
  in the handicraft business are registered as
  non-profit associations, which have a cap on the
  amount of revenue that they can generate per year
  (85,000 kuna).

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Issue Access to finances and Legal registration

• Possible solution
• Provide initial credit/loans/subventions
  technical assistance at local level.
• Assist in finding domestic or foreign sources
  (subventions from ministries, EU pre-accession
  funds etc.).
• Provide support and assistance to women in
  actually obtaining those finances!
• Pursue registration as a cooperative, as the next
  step.

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Some ideas ...

• EDUACTION IN DESIGN, BUSINESS MANAGEMENT
  MARKETING
• Support rural women in learning more about
  product design and development, general business
  management including accounting, costing,
  pricing and marketing.

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Some ideas ...

• FACILITATION OF CONTACT MAKING EVENTS
• I have a handwoven souvenir who wants it? Is
  it good enough? Should it be modified?
• For example Organise gatherings between
  designers, hotel owners, souvenir shop owners and
  handicraft producers
• Organise study tours to examples of good
  practice!

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Some ideas ...

• MAKE SLAVONIA THE ULTIMATE
• HOTSPOT ? FOR RURAL TOURISM
• Increase the tourist flow into Slavonia so that
  customers are able to have direct contact with
  producers and their work.
• It would be good to create spaces that would be
  of interest to large tourist groups.

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Some ideas ...

• LONG-TERM LOCAL SUPPORT FOR RURAL WOMEN
  ENTREPRENEURS
• Establish a regional/local ...
• SUPPORT CENTRE
• for rural women entrepreneurs.

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SUPPORT CENTRES should offer

• INFORMATIONS regarding
• market -supply and demand
• loans, credit and subvention offers
• new regulations in the field of finance and
• fairs, business and education events

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SUPPORT CENTRES should offer

• CONSULTING regarding
• Finances and investment
• Marketing
• Human resources
• Public relations
• Import-export
• IT and E- business

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SUPPORT CENTRES should offer

• EDUCATION regarding
• Start up programs for women entering the
  business (motivation, orientation, business plan,
  registration etc.)
• Improve your business program for women
  entrepreneurs (new regulations, marketing,
  product/service quality, new technologies etc.)
• Tailor-made education programs (women in food
  cooperatives, women in handicraft business etc.)

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SUPPORT CENTRES should offer

• NETWORKING activities
• With other successful business women and
  enterprises (examples of good practice)
• Linking producers with buyers
• Meetings, fairs or other contact making events
• Database of women entrepreneurs, retailers, shops
  ...
• Website presentation

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Conclusion

• Like with most handcrafted products, not only
  with the Handwoven souvenirs social enterprise,
  current sales are limited by a lack of market
  linkages, unattractive design, poor product
  development, no marketing strategy, little access
  to finance, inadequate contact with the products
  target market (or no knowledge of what the target
  market is in the first place), overall weak
  business management skills and registration
  constraints ....

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Conclusion

• The souvenir market is known as a market for
  cheap, mass-produced items.
• Yet handcrafted products have a deeper meaning in
  many senses.
• They can meet a need of a tourist who is looking
  for an interesting gift or something that reminds
  them of their visit. And these products can also
  convey and celebrate a countrys unique cultural
  tradition, while giving the customer a beautiful
  high quality product.

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Conclusion

• Most importantly, however, the sale of
  handicrafts can build communities by
  strengthening micro-enterprises and cooperatives
  that are managed by women in regions with great
  economic need.
• This is certainly the case in the Slavonia
  region. Handicraft development initiatives can
  play an important role in increasing job creation
  and income generation in Croatia.

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CONTACT ...

• ... If you are interested in the CODD Handwoven
  souvenirs products, if you know someone who
  could be interested ...
• ... if you want to know more about my
  organisation ... Visit
• www.gord.hr
• GORD-CODD
• S. Kolara 2, Dalj 31226 Croatia
• 385-31-591195
• gord-codd_at_inet.hr

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THANK YOU

• ... For you attention.
• Dont hesitate to contact me personally for
  further information.
• Jasmina Ilincic,
• E-mail jilincic_at_inet.hr
• Mobile 385- 98 - 922 92 56