“Moving Up
the Hierarchy”: Local Markets, ASEAN, and Beyond
Donna L. Doane
Research Consultant, HomeNet South East Asia
I. Introduction: the “hierarchy” of homebased workers
The general characteristics of homebased workers depend on the
particular country, or community within a country. On the “upper”
end (better off – higher quality and more specialized
products or services), we tend to find: a) Men and some women
HBWs who have better access to resources, and can travel around
and can do own marketing, get new market information, new designs
and technologies, etc.; b) Younger (including middle aged) workers
who are more educated; c) Workers with good ties/relationship to
contractors; d) Those who supply specialized products or services
for formal economy organizations (e.g., supplying inputs to or services
for formal companies/factories), etc.
On the “lower” end (worse off – lower quality
or more “generic” products), we tend to find: a)
Women and some men HBWs who have less access to resources; they
may not be allowed to travel around so they may not be able to do
their own marketing (and encounter problems with middlemen); in
isolation, they cannot get access to market information, new designs,
technology, etc.; b) Older workers who are less educated; c) Those
with Fewer direct linkages or good ties with contractors; d) Those
with fewer direct linkages to markets or formal sector. For example,
many HBWs on the “lower” end are potters –
they can’t build up inventories, get new technologies for
making pottery, or raw materials; hence they cannot sell in distant
markets even though there is a growing demand in urban areas and
across the world for “high end” pottery.
Those in the “upper” part of the hierarchy are likely
to already have access to a wide range of markets. Those “lower”
in the hierarchy will have more difficulty trying to access and
maintain their markets, and will not sell in a wide range of markets.
The following discussion will therefore focus more on HBWs that
find themselves “lower” in this hierarchy, and will
discuss what can be done to improve their circumstances.
II. What will help HBWs move “up” the hierarchy?
Being organized into networks, unions, etc. can work together to
overcome some of the difficulties HBWs face, and move up. And being
part of wider networks and having linkages to external individuals
and organizations (NGOs, MFIs, design institutes, government agencies,
and other organizations and institutions) can help HBWs overcome
some of these difficulties as well.
This implies that if the HBWs are satisfied with how they are doing
under present conditions, there may be no need to change. However,
if they are not doing well, they will need to make some changes
(e.g., through organizing themselves and being part of wider networks,
and working with other “external” individuals and organizations).
There are examples of current problems: 1) garment workers
in the Philippines experience loss of international and domestic
markets; 2) weavers in Lao PD face competition from imports, quality
control for exports; and c) weavers in Timor-Leste have problem
with the currency, small domestic market, lots of supply (including
new technologies brought in), but not enough demand. They
all need to find new markets, but where?
III. Marketing: how can one use marketing strategies to help move
“up” the hierarchy?
There are problems with exporting to ASEAN countries: Those in
the “upper” part of the hierarchy can be successful,
but it is much harder for those in the “lower” part
because there is too much competition among too similar products
in the region (e.g., textiles, or wood products in South East Asia).
In general, export markets are very unpredictable; they change rapidly,
and the HBWs would need assistance to be able to keep up with these
changes.
Domestic markets may be less profitable, but they are more predictable.
This can also be a place to “test” new products. It
may be possible to protect these markets for some
time, under international agreements – in other words, to
keep outside competition out, as domestic producers improve their
products. This is also part of the idea of “fair trade.”
(Example: East Asian countries vs. the Philippines)
Exports (not necessarily in ASEAN countries) can follow once successful
products are tested in domestic markets. Another alternative to
developing one’s own products and testing them out locally
is to work with designers tied to international exporters or high
end or high volume stores, making products to their exact specifications
– here, design, quality and timing are critically important.
IV. What can HBW organizations do?
Among the many things that HBW organizations can do to help HBWs
“lower” in the hierarchy move up are the following:
- Focus first on the domestic market – if possible, push
for policies to protect these markets from outside
competition for some time. Also, push for government policies
to help develop very small-scale enterprises. (Japan,
Thailand, India, China, etc. countries have done this)
- Organize, build networks, build ongoing outside contacts
with people one can trust and work with over time, and move beyond
very local markets into national markets whenever possible.
- Use indigenous knowledge and designs whenever
possible to make the products specialized or unique.
- Try to put together a better distribution system within
the country ((e.g., through government craft centers
or shops, festivals, tourist centers, etc.) and develop good coordination
between producers and sellers, eliminating the middlemen when
possible.
- Learn from others about how to move toward export markets
(from consultants, other homebased worker organizations, international
exporters, buyers, stores)
- When moving toward export markets, remember that design,
quality, and timing are critically important and
no “shortcuts” can be taken.
- Flexibility and having a wide range of products
(and being able to change product designs or even products altogether)
is the key to export markets. .
- Access to export markets will depend on the characteristics
of the particular product. (For example, in some markets embroidered
goods will be popular, but in others not at all).
- The very top quality “traditional” or “modern”
products can even be marketed through museums, top boutiques,
and the like. (This is only for the most skilled artisans)
The member organizations of HomeNet have a lot they can learn from
each other, and as a group they can also bring in outside help to
advise about new ways to produce and/or new ways to market products
or services. HomeNet South East Asia might also try
marketing products jointly in trade fairs, as HomeNet South Asia
has done.
The point is to learn how to move “up” the hierarchy.
This is a step-by-step learning process, and will involve gaining
greater knowledge, contacts, and flexibility. Again, being
part of a network or union, and having ties with external individuals
or organizations that can help with this learning process,
will be extremely important.
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