ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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This special issue seeks to offer a new way of thinking about the relationship between production by handlooms and market theory. The attempt is to map the trajectory of successful handloom enterprises, locating them in the context of the growth of the handloom industry as a whole. The mapping seeks to highlight certain trends and processes that typify how handlooms work with markets and market institutions. In doing so, it also offers insights into understanding marketing practices within an artisanal mode of dispersed production.

Marketing Handlooms


This special issue seeks to offer a new way of thinking about the relationship between production by handlooms and market theory. The attempt is to map the trajectory of successful handloom enterprises, locating them in the context of the growth of the handloom industry as a whole. The mapping seeks to highlight certain trends and processes that typify how handlooms work with markets and market institutions. In doing so, it also offers insights into understanding marketing practices within an artisanal mode of dispersed production.


arketing practices offer striking insights into understanding how persons, organisations and firms negotiate the market in different ways. Behind every market negotiation lies a gamut of players (each of whom are embedded in a range of institutional networks), who both use and generate knowledge about the marketplace in the course of their actions. This relatively unsystematised body of practical knowledge does not inform our ruminations on markets of different kinds. In fact, there is often a disjunction between what marketing practitioners are actually doing and the strategic principles that form the basis for conceptualisations in marketing theory. Typically, micro-level knowledge remains illustrative. If these are consolidated into a middle-level knowledge base, it could throw light on macro-issues, such as the very nature, or form, of markets for specific products, the evolution of such markets, market booms or failures and the reasons for these. Extracting from everyday marketing practices and processes is an important task and not only for the above reasons. It also provides a glimpse of how marketers innovate and deal with the set of factors often characterised as “non-market” but which strongly impact factors and actors in “markets”.

Such a consideration of everyday marketing practices would allow a closer look at what is involved in the consolidation of marketing knowledge. There have been a number of debates1 about what constitutes marketing knowledge and what its forms are: Should it exclude or include tacit knowledge? How does the non-market2 (social, political, legal institutions) influence it? What have marketing skills got to do with it? Does knowledge of buyer behaviour constitute marketing knowledge, or does it call for something more? How are the marketer and producer related? These are crucial questions and need to be extracted from trends in market practices.

The articles in this section explore some of these aspects in the context of handloom markets and marketing experiences in handlooms. We seek to offer a new way of thinking about the relationship between the production of cloth by handlooms and market theory. The approach is not the same as one would find in analyses from within the disciplines of either economic history or sociology.3 Typically, in evaluating a traditional industry like handlooms, economic historians examine the scale and shifts in weaving. Likewise, a sociological analysis of handlooms would focus on the way production is organised and the social relations that support it. In contrast to these types of investigations, we attempt to focus more pointedly on the way in which handlooms are understood in a market context. Neither does business management provide a completely adequate frame of reference for such an analysis. Existing theories and models of how businesses grow have drawn on a range of ideas such as conduits (information flows and asymmetry, technology flows, networks and alliances), structures (organisational form), or the more elusive notions of “strategy” and “enterprise”.4 Even within economic theory, the growth of new businesses is poorly mapped.5 Orthodox economic theory is premised on the rational and informed actor and has “no room for the classical entrepreneurial functions of coordination, arbitrage, innovation and uncertainty-bearing” [Bhide 2000:5].6 Given this scenario, our attempt is to map the trajectory of successful handloom enterprises and locate them in the context of the growth of the handloom industry as a whole. Needless to say, this is not an exhaustive account of all successful enterprises in handlooms, nor is it an attempt to draw out “best practices” that can be replicated. Our attempt is also not to offer a full-blown alternative framework for analysis. Rather, the mapping seeks to highlight certain trends and processes that typify how handlooms (and the accompanying practices of production, distribution and exchange) work with markets and market institutions. In doing so, it offers suggestive insights into understanding marketing practices within an artisanal mode of dispersed production.

This introduction will provide a perspective on the structure of the handloom industry and the nature of the handloom market. It also offers a brief sketch of the structure of this special issue and the themes addressed.

I Structure of Handloom Industry

Dispersed production base: The handloom industry has a dispersed production base.7 in the sense that producers are spread across numerous villages and towns, unlike a centralised factory-based production. It is largely home-based, with labour inputs form the entire family. While weaving sheds do exist occasionally, more widespread is the weaver weaving at home, drawing on the labour of all the family members. Diversity: It is extremely diversified in terms of products ranging from coarse cloth

We are grateful to Seemanthini

Niranjana for putting together this

special issue –Ed.

Economic and Political Weekly August 5, 2006 for local needs to a range of medium and fine fabrics for a larger (usually urban) market. Each region is known for a specific products that is unique in design and style. Organisation of production: The modes and relations of production are also very diverse. There are independent weavers, weavers organised into cooperatives and those working under master weavers.

While a few areas may be characterised by one clear-cut mode of production (such as, say, domination by master weavers alone), combinations and a multiplicity of relations of production is the norm. Typically, under the cooperative structure, raw materials come from the cooperative, with capital support from the state. The final product is also supposed to be marketed by the state-owned apex marketing bodies. However, there have been several problems along the production-marketing chain in this model. All weaver members do not have continuous employment, either due to lack/inefficient use of working capital within the cooperative, or due to irregular yarn supplies, or due to collapse of the marketing agencies. This compels weavers to turn to master weavers. Under this system, the master weaver himself makes the investment in yarn; weavers directly under him weave the product, and the final product is marketed through the master weaver’s own networks. Independent weavers are few and far between, due to the problems of accessing working capital as well as markets directly. State policies vis-à-vis handlooms: The present-day structure and profile of the industry have also been influenced by the state’s policies. The perspective of planners in the immediate post-independence period was dominated by the nationalist emphasis on economic self-reliance. This is evident in the way the artisanal sector was approached in the five-year plan documents and other reports. The potential of employment and the value of preserving the cultural heritage played an important role in guiding policy formulations. Up to the mid-1980s policies continued in the direction of protecting the small-scale dispersed industry from the centralised industrial sector. But a crucial shift towards the issues of increasing productivity came with the textile policy of 1985. The emphasis came to be on efficiency, improving productivity while paying only lip service to employment generation. The succeeding policies of the 1990s and in 2000 further undermined the validity of the industry. While addressing allegations of low productivity through some of its “schemes”, the government continued to propound schemes that were a mix of welfarism and a seeming concession to the employment potential of this sector. The articulations however denoted the clear shift from an industry with future prospects to that of a temporary income generation model especially in rural areas. The global recognition of the importance of creating livelihoods provided an accessible representation to fit the changing policy preferences. Handlooms started appearing in the new garb of a livelihood model along with various other income generation programmes. This emphasis on the economic aspect was different from the earlier mode where artisanal industries had been the focus of patronage by various agents, from royalty to even the state, through its welfare schemes and measures. One needs to take note of the fact that despite voicing the employment potential phraseology little was done by way of investments in infrastructure or creating the right conditions for business development in handlooms. These, and other factors which will be laid out in the next section, have to be kept in mind while assessing handloom marketing experiences.

II Nature of the Handloom Market

Handloom production uses simple lowcost tools and equipment that can be easily adapted to produce specialised goods. This is a characteristic of artisan production (part of the large “informal” manufacturing sector) as opposed to mass production in which specialised equipment is used to produce standardised goods. Organisational structure of corporations engaged in mass production either encompasses both production and marketing or has welldeveloped linkages between them. It is therefore able to balance demand and supply to some extent. In handlooms, however, traditional linkages between production and marketing of handlooms have been eroded, with no clear institutional replacement. A brief overview of the nature of the handloom market over time will amplify this point.

Handloom weaving has continued over hundreds of years, though the producers’ relations to the market have definitely been changing. The traditional market for the Indian craft textile has been, for centuries, the local market. While the high-end textiles served the courts and wealthy, ordinary folk wore and used the product of the village weaver, dyer and printer. The legendary dominance of the Indian cotton textile in the world market between the first and the 18th centuries was built on this solid, unshakeable connection between local production and local market.

However, this scene dramatically changed with the course of history, which has been fairly well documented by historians and others.8 Though British rule brought about changes in the handloom industry in India, scholarly opinion is divided on the question of the kind of impact it had. The Marxist school of thought has argued that colonial contact destroyed pre-existing industrial systems and brought about economic retardation. By contrast, historians and other scholars working for over a decade have documented the dynamism of the indigenous artisan economy that, during the last century of British rule, responded by changes in the conditions under which cloth was produced and sold.9 So rather than get completely wiped out, handlooms continued to survive.10 This was made possible through an organic process of adaptation of organisational structures that made it possible to reach new and distant marketplaces and enhance production efficiencies. Though purely local markets declined, new markets in other countries and within India provided opportunities for growth.

As markets changed, the marketing intermediary linking dispersed producers with distant markets also changed. Traditionally, the weaver and customer were bound together in a close and direct transaction in the small village communities across India. In many places, apart from the common person, weavers found an important source of support in royal patronage as well. When overseas trade opened up in the 17th century, the position of the trader (or the master weaver) as the key supplier of cloth to distant markets got consolidated. The master weaver has continued to play a leading role in handloom marketing initiatives. But being in control of market information and capital, the master weaver tended to take advantage of (and in many places exploit) the weaverlabourer. Weaver cooperatives were envisaged, around the early 1940s, as an alternative to this structure. Between them, the master weaver structure and the cooperative structure accounted for the bulk of production and marketing activities in the industry. Under the cooperative structure,

Economic and Political Weekly August 5, 2006

there are hundreds of primary weaver cooperatives, which are integrated into an apex centralised marketing body. These apex agencies typically had showrooms in all big cities, providing an important link between the producer and the consumer for several decades after independence. However, since the mid-1990s, most of the apex handloom marketing bodies have been unable to respond flexibly to the market or even to capitalise on traditional products due to systemic failure and financial irregularities. The result is that despite the huge potential of the handloom market, mechanisms for linking the dispersed production base to distant markets are not in place.

Handloom marketing initiatives have been influenced by other trends as well. The Festivals of India (in France, US and Britain), initiated in the early 1980s, created considerable visibility of Indian handlooms and handicrafts in the world market. This led to a flurry of largely revivalist attempts to systematise and harness craft production taking into account the new demands. Around this time, a few NGOs also emerged as new intermediaries, whose primary attempt was to work on developmental and/or livelihood issues in the crafts and handlooms sector but who also took up marketing as a necessary support to this. These interventions were on a comparatively smallscale and served to create potentially replicable models and systems.

Over the last decade and a half, the retail market in India has undergone considerable change. With the entry of a host of goods produced by transnational corporations into the Indian retail market, the rules of the marketing game are changing fast. This extends not only to the style of presentation (for instance the style of shop interiors), but also the articles sold (whether it is processed food or shoes). This changing market scenario has tended to see the traditional Indian hand-woven fabric (or handlooms) and other artisan products as peripheral to, rather than a part of daily use, leading to a mismatch between the large-scale production structure and the narrow market. In theories of economic management, this marks a “regulation crisis” where “existing institutions no longer secure a workable match between the production and consumption of goods”.11 But this situation also provided immense scope for market exploration and posed challenges for producer-chain innovations by both the old and new players.

It paved the way for the emergence of a significant number of new players, in addition to the earlier structures of “master weaver/cooperative/government emporia”. These range from big chain retail stores with a modern retail format to well-established traditional chains, which continue to expand. There are also smaller retailers in small towns, and NGOs seeking to set up market links for the producers they worked with. Some are hugely successful, others are still trying to find their feet, and their modes of relating to producers are also different. Some target specific market segments through a cooperative structure, others are private entrepreneurs engaged in handloom trade. What different market segments are these channels catering to and how is market expansion being addressed? The efficacy of these initiatives depends significantly on how the market is worked, and builds on particular understandings of the kinds of demands for handloom cloth. Given this wide range of marketing experiences, it is evident that there exists a huge storehouse of knowledge, which has yet to be analysed and built on. A new look at marketing handlooms, building on its strengths such as innovation and flexibility, assumes importance in this context.

III Context and Themes

The articles here draw on the case studies generated for a national workshop on ‘Understanding Markets, Marketing Handlooms’, (organised by Dastkar Andhra in Hyderabad (June 25-26, 2004)).12 The workshop highlighted the problems in, and potentials of, the handloom market through a wide variety of players. It brought together diverse handloom marketing experiences and sought to understand the larger contexts within which innovations and strategies take shape.13 Some of the key questions that emerged during the workshop were: (i) Who is driving the handloom market? What is the structure of the handloom market? Is it only the sum of individual players, or something more? Who are the major players and how do they work the market? Is there a lack of variety of players in the handloom-trading field?

(ii) What are the barriers to entry? (iii) What are the existing market channels and what kinds of support systems do each need? Who should be the agents in marketing – primary producers, private traders/retailers, through government initiatives, or NGOs’ and other agencies? What are the problems encountered by each, say of scale, reach, profit, etc? Where are the bottlenecks? What is the role of each player? Which is the point of their intervention – are they seeking alternative marketing channels, or are a purely business venture, or focused on getting a fair deal to producers?

The workshop content was facilitated through a process of case study research. Case studies were prepared on pre-identified players in the handloom field today, which provided information about: (a) the growth of that particular player and the context they have worked in, and (b) the mode in which they have addressed the different variables, such as skill base of producers, design input, supply chain management, quality control, etc. The point was not merely to collect anecdotal information, but to use these stories as data for further exploration in both practical contexts as well as in building appropriate marketing theories.

Selecting the players was not an easy task. The workshop had cases on two major stores (Anokhi and Fabindia), on the cooperative and master weaver channels in Andhra Pradesh, on innovative models like Desi (a store-cum-NGO), and on NGOs engaged in marketing (Dama, Urmul, Rehwa). In addition to these case studies, there were also presentations on bazaars as an effective marketing channel (Dastkar, Delhi), on Udyogini’s attempt to build capacities in crafts, on apex marketing bodies such as Apco and Co-optex, on the Pochampalli cluster intervention and on design-marketing interface taken up by a design school in Hyderabad. Case studies as a way of raising questions about the industry/market: It is, no doubt, important to be informed about the experiences of individual handloom marketing agencies through time. Yet, merely this is not enough, and one could easily get lost in discussing as to just how many cases would constitute the right sample to support any generalisation. Our use of case studies here is more as a way of asking questions, of looking at individual cases to extract a pattern and develop a perspective on handloom markets and marketing.

What, then, do the cases allow us to do?

(a) Each of the cases provides an understanding of structure (of the handloom marketing enterprise) and process (changes over time); of the decisions taken, choices made and directions not

Economic and Political Weekly August 5, 2006 taken. In a word, it engages both the strategic and normative dimensions of marketing handlooms.

  • (b) In doing so, they demand of us a recognition of the complexity of operations undertaken and the different levels at which activities integrate, both of which bring, the context strongly back in.
  • (c) As a “measure and means of asking questions”, the case experiences also provide the insights with which to build a distinctive approach to marketing that may better characterise the artisan industries.
  • A group research process was adopted in analysing the cases in Part II. Each of the cases – the strategies adopted, the choices made, the normative location, and many other dimensions – was discussed in the group over several intensive sessions. The final product is a result of a collective process of analysis and articulation.


    Some of the dominant perceptions of the handloom industry have been that it is traditional and restricted to a niche market. Unfortunately, this association of handloom textiles with tradition in the popular, scholarly and business imagination has acted as a barrier in recognising the flexibilities in the industry. The production-market parameters set by organised mass production poses another problem, since marketing practices cannot deal with the complexity of dispersed production. For example, dealing with handloom fabric raises myriad problems for the modern retailer, since handlooms do not conform to mass production norms (of, say, speedy delivery). This has also fuelled the perception that handloom fabric suits only a limited, elite niche market, and that it should build on the “traditional identity” label to target overseas markets as well. However, this is not borne out by actual experiences in handloom marketing, where it is not uncommon to find the handloom product inhabiting a variety of segments and niches. The point this underscores is that the huge diversity within the handloom product allows it to span different segments of the market, both within the country and outside. Another dominant perception is that of the weaver as hidebound, risk-averse and incapable of innovation. Every handloom enterprise examined in this issue contradicts this assumption and reveals that they are actually capable of major shifts in scale, product development and markets. Very often, this is accompanied by building capability in servicing new markets. For instance, this is the capability to take large orders (which means larger investments), frequent design changes (which means increase in development cost), ability to face new uncertainties (risks), etc.

    It is our contention that the handloom industry is far from being the “sunset industry” it is often made out to be. This perception, in addition to some of the ones mentioned above, has tended to box handlooms into an “unchanging, traditional type”. The handloom enterprises presented and analysed here show that this is not the case. The cases offer a new look at marketing handlooms, building on its strengths such as innovation and flexibility and refute several of the myths surrounding handcrafted textiles. These provide ample indications in support of the claim that a different point of entry into the question of handloom markets is needed today.

    The cases and their analyses serve to emphasise the potential for growth in handloom industry, both in the market and in terms of producer well-being. It is also clear that there is no one tried-and-tested way forward, and that several choices are made by the handloom organisation/ firm which are influenced not only by market considerations, but also several nonmarket parameters. Where to produce and with what resources are not only situational decisions but influenced by the form of the organisation, its normative mandate and the ways in which it perceives the bottleneck in the production-marketing chain. Based on all of these, innovations all along the chain are designed. While it appears from the cases that each agency is merely negotiating the market, the analysis reiterates that in the course of these negotiations, there is value being built – for the product, for the producer, for the mode of production and for the firm itself. We suggest that, in doing this, handlooms is not only altering dominant market norms, but also changing the nature of the market transaction itself. The marketing experiences analysed also suggest a different way of looking at the entrepreneurial function in the handloom industry. The producer-marketer links are not strategic business relations (though they form part of the linkage) but models of entrepreneurship, which encompasses a larger social equation. The norms dictated by a homogeneous mass market are clearly put in question by the new relinking of producer and consumer through the

    Economic and Political Weekly August 5, 2006

    handloom/artisanal mode of production. The analysis offers an alternative to the mass production paradigm, with greater possibility of equity and well-being to the producer.

    These themes are laid out and illustrated over the two parts comprising this special issue. Part I constitutes the set of case studies, largely descriptive. Part II consists of two articles. Between them, these essays locate and analyse handloom marketing experiences in terms of organisational form/ structure, its normative moorings and how it transitions across markets. The first essay focuses on what it takes to match a dispersed production base with distant markets – broadly the challenges faced by handloom marketing ventures, and see how this could also pose questions to existing norms of the market itself. The second article explores the ways in which the nonmarket is negotiated by the handloom enterprises/firm, in relation to the strategies adopted in production and how these are also influenced by the defining normative frame within which these players function. It suggests that market negotiations in these handloom cases are also altering the very nature of the “market”, in a sense pushing the market back to its place within a societal framework as a whole.

    A Brief Introduction to Case Studies

    The case studies highlight different marketing experiences and innovative strategies adopted by select handloom marketing agencies. While the cases document the trajectories of particular players, the objective was not to evaluate their “success” or “failure”, but to locate and analyse the implications of these marketing practices.

    The cases span a range of organisational forms. There are cooperatives and master weavers from Andhra Pradesh, both of which are the most widespread structures within which production and marketing take place traditionally. Then there are major retail stores such as Anokhi and Fabindia; and Desi, which is a store with a difference. Also included are NGOs working with weavers and engaged in marketing – Dama, Urmul and Rehwa. The organisational forms of each of these are decidedly different from each other and this is one factor influencing the ways in which the supply chain is managed. Each of the agencies has made a series of innovations on form, process and product, which has had specific implications for producers, for the firms themselves and for the handloom industry as a whole. While some innovated on the very design of the production system, others combined this with innovations in product. Each agency held fast to some principles (for instance, commitment to producers, or to technology parameters), while they were willing to push the boundaries and achieve flexibility in some other aspects (for instance, design changes, methods for achieving quality control). It is the unique balance achieved by each player that makes them the successful marketing agencies that they are.




    1 See Rossiter 2001, 2002. 2 Boddewyn 2003. 3 See, for instance, Roy 1999; Mines 1984. 4 See Penrose 1959; Ghemawat 1997 and

    Rugman and Brewer (eds), 2001. 5 Bhide 2000. 6 See also, Barretto 1989; Baumol 1968 and

    Blaug 1986.

    7 Dispersed production, decentralised production, traditional and artisan mode of production are used interchangeably in the course of these essays.

    8 Arasaratnam 1990; Brennig: 1990.

    9 Harnetty, 1991; Haynes 1996; Roy 1998; Mukund and Syamasundari 2001; Specker 1989.

    10 Roy 1999, underlines the point that traditional industries survived by adapting to new and distant markets in specific ways.

    11 Piore and Sabel, 1984:4.

    12 The workshop, held at National Institute of Rural Development, Hyderabad, on June 25-26, 2004, was supported by the Office of the Development Commissioner of Handlooms, Ministry of Textiles, New Delhi, with documentation support from NABARD.

    13 Representatives of handloom firms, the government and other agencies participated. A number of academics, marketing and management professionals also provided critical input analysing the case studies and drawing out the implications of some of the practices.


    Arasaratnam, S (1990): ‘Weavers, Merchants and Company: The Handloom Industry in South Eastern India, 1750-1790’ in S Subramanyam (ed), Merchants, Markets and the State in Early Modern India, Oxford University Press, Delhi.

    Barretto, H (1989): The Entrepreneur in Microeconomic Theory, Routledge, London and New York.

    Baumol, W J (1968): ‘Entrepreneurship in Economic Theory’, American Economic Review, (Papers and Proceedings), 58, pp64-71.

    Bhide, A V (2000): The Origins and Evolution of New Businesses, Oxford University Press, Oxford.

    Blaug, M (1986): ‘Entrepreneurship Before and After Schumpeter’ in Economic History and the History of Economics, New York University Press, New York, pp 219-30.

    Boddewyn, J J (2003): ‘Understanding and Advancing the Concept of Non-market’, Business and Society, Vol 42 (3), pp 297-327.

    Brennig, J J (1990): ‘Textile Producers and Production in Late 17th Century Coromandel’, in S Subramanyam (ed), Merchants, Markets and the State in Early Modern India, Oxford University Press, Delhi.

    Ghemawat, P (1997): Competition and Business Strategy in Historical Perspective, Harvard Business School Note, No N9 797-136, Harvard Business School Press, Boston.

    Gittinger, M (1992): Master Dyers to the World, Textile Museum, Washington DC.

    Harnetty, P (1991): ‘ ‘De-industrialisation’ Visited: the Handloom Weavers of the Central Provinces of India, c1800-1947’, Modern Asian Studies, Vol XXV, pp 445-510.

    Haynes, D (1996): ‘The Logic of the Artisan Firm in a Capitalist Economy: Handloom Weavers and Technological Change in Western India, 1880-1947’ in Stein and Subramanyam (eds) Institutions and Economic Change in South Asia, Oxford University Press, Delhi.

    Mines, M (1984): The Warrior Merchants: Textiles, Trade and Territory in South India, Cambridge University Press, Cambridge.

    Mukund, K and B Syamasundari (2001): Traditional Industry in the New Market Economy: The Cotton Handlooms of Andhra Pradesh, Sage Publications, New Delhi.

    Penrose, E (1959): The Theory of the Growth of the Firm, N Y, White Plains, M E Sharpe.

    Piore, Michael and Charles Sabel (1984): The Second Industrial Divide: Possibilities for Prosperity, Basic Books Inc, New York.

    Rossitter, J R (2001): ‘What Is Marketing Knowledge? Stage 1 – Forms of Marketing Knowledge’, Marketing Theory, 1(1), pp 9-26.

    – (2002): ‘Introduction to the Special Issue on Marketing Knowledge’, Marketing Theory, 2(4), pp 331-32.

    Roy, T (1998): ‘Economic Reforms and Textile Industry in India’, Economic and Political Weekly, April 18, pp 897-910.

    – (1999): Traditional Industry in the Economy of Colonial India, Cambridge University Press, Cambridge.

    Rugman, A M and Thomas L Brewer (eds) (2001): The Oxford Handbook of International Business, Oxford University Press, Oxford.

    Shambu Prasad, C (1999) ‘Suicide Deaths and Quality of Indian Cotton’, Economic and Political Weekly, Vol XXX1V (No 5), PE 12-21.

    Specker, K (1989): ‘Madras Handlooms in the Nineteenth Century’, Indian Economic and Social History Review, Vol XXVI, pp 131-66.

    Economic and Political Weekly August 5, 2006

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