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- CASE STUDY - Women entrepreneurs from rural areas in the souvenir business Eastern Croatia/Slavonia Erdut Municipality JASMINA Ilinčić, Director.

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Presentation on theme: "- CASE STUDY - Women entrepreneurs from rural areas in the souvenir business Eastern Croatia/Slavonia Erdut Municipality JASMINA Ilinčić, Director."— Presentation transcript:

1 - CASE STUDY - Women entrepreneurs from rural areas in the souvenir business Eastern Croatia/Slavonia Erdut Municipality JASMINA Ilinčić, Director of development CODD Civil Organisation for Development Dalj RCC - Workshop on Enhancing Women Entrepreneurship in SEE Sarajevo, 1st October 2009

2 INTRODUCTION ... While preparing this presentation, I held a meeting ( ) 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.

3 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.

4 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.

5 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)

6 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.

7 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.

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

9 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.

10 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.

11 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.

12 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“.

13 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.

14 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.

15 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 can’t be the main souvenir market.

16 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?

17 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.

18 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?

19 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.

20 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?

21 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:

22 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)

23 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

24 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.)

25 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?

26 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.

27 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.

28 Issue: Competition How to avoid the often heard sentences?
......“I can buy a cheaper souvenir.” Or ......“This is to expensive.”

29 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 can’t compete with Chinese wages.

30 Issue: Competition Possible solution: Analyses of market
Move into new areas Products must have unique design & quality Products must have a story attached

31 Issue: Market Access How can rural women, handicraft producers, be hooked with clients and other actors involved in the market?

32 Issue: Market Access Some identified problems:
To much reliance on family, neighbours or previous contacts in local area. Women can’t 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.

33 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.

34 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).

35 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.

Support rural women in learning more about product design and development, general business management – including accounting, costing, pricing and marketing.

I have a handwoven souvenir – who want’s 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!

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.

Establish a regional/local ... SUPPORT CENTRE for rural women entrepreneurs.

40 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

41 SUPPORT CENTRES should offer:
CONSULTING regarding Finances and investment Marketing Human resources Public relations Import-export IT and E- business

42 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.)

43 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

44 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 ....

45 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 country’s unique cultural tradition, while giving the customer a beautiful high quality product.

46 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.

47 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: GORD-CODD S. Kolara 2, Dalj – Croatia

48 THANK YOU Jasmina Ilinčić, E-mail:
... For you attention. Don’t hesitate to contact me personally for further information. Jasmina Ilinčić, Mobile:

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