In 1985, when Neelam Chhiber went for industrial training to a branded cookware factory in Delhi as part of her course in industrial design at the National Institute of Design, she ended up becoming a defining moment in her life. “I found myself questioning the relationship between the management, and workers who made the ovens and other cookware. I did not like the atmosphere. It whetted my curiosity about traditional production methods.”
Chhiber decided that she would study the methods of the artisans of Bastar for her six-month diploma course. “I saw how customers and artisans interacted, face-to-face. I learnt that you need links between the customer and artisan,” she says. This learning has evolved into Mother Earth, a Rs80-crore retail brand today, which is part of the emerging boom in sustainable lifestyle products in India. It has also pitted her against the largest player here today, the Rs500-crore Fabindia, which has become a household name among upwardly mobile Indians who flock there for kurtas, all-natural soaps and dining tables.
The sector has come alive for other reasons: Recently, L Capital, the private equity arm of French luxury purveyor LVMH, picked up an eight per cent share in Fabindia, while Future Ventures, a private equity (PE) fund, part of the Future Group, funnelled Rs14 crore into Mother Earth for a performance-linked investment.
Chhiber says that over the decades, she logged long stints as a consultant with several handloom and handicraft corporations which took her to artisans’ clusters across the country and helped her to understand their issues. What was a real eye opener, however, was her training in social entrepreneurship that she received from international non-governmental organisation (NGO), Social Impact. “I realised in 2008 that if we wanted impact, we must scale up. And, for that, we needed to build a brand. Mother Earth was born.”
Gita Ram, secretary of the Crafts Council, played a vital support role, and provided her with a loan worth Rs60 lakh. Then, Chhiber approached Future Ventures, which agreed to invest in her company. Investments worth Rs5 crore from a social fund, Green Business Fund, followed. Mother Earth was on the move.
Today, Chhiber is focused on scale. Compared to 50-year-old Fabindia, with over 160 retail outlets, Bangalore-based Mother Earth has just eight stores. “We want to hit Rs500 crore in five years,’’ says Chhiber. Arun Gupta, president of Future Ventures, her largest investor, says, “You need scale. Or your artisan will always be a poor fellow. Expansion of the front end is a must to ensure there is sustainable demand for their products.” The $400-million private equity fund has also invested in brands like Mother Earth, Biba, Clarks Shoes, Turtle and Capital Foods. Mother Earth also sells its products through online portals, tele-shopping and multi brand outlets.
Seventy per cent of Mother Earth’s turnover comes from home goods like bath mats and furniture. The company is also busy tapping the export market. “We have a two per cent global market share,” says Chhiber. ‘’Consumers want cutting edge design and easy availability. The fact that it is a designer-led brand is what makes it stand apart,’’ says Gupta.
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Currently, 40 per cent of Mother Earth’s products comes from self-help groups (SHGs) it helps incubate. That figure, the company says, will grow to 60 per cent soon. These groups are based in the four southern states, as well as Odisha.
A trust formed by these SHGs also has 15 per cent shares in the company.
It also sources mat weaving from Tripura, handloom and wood craft from Uttar Pradesh and applique and printing work from Rajasthan. From the south, it gets basketry and lacquer work.
All profits of production stay with the SHG. The production incubation teams do an open costing with the SHG, based on market rates wherever applicable. For instance, in garment tailoring, the SHG is given the same rates that would be given to any mid-sized job working unit. The groups get facilities that any corporate would provide—such as provident fund and health insurance—and also establish good working facilities as well as capital from banks.
Mother Earth’s success has heralded a new age in socially-conscious entrepreneurship and a wave of companies is poised to try their hand at similar business models. Anokhi, a second generation, family-owned business, with a turnover of Rs70 crore, is a blue-chip competitor for both FabIndia and Mother Earth and says that it supports around 1,000 craftsmen. However, owner and managing director Pritam Singh says he has no ambitions to expand or raise investments.
Dastkar in Andhra Pradesh and Asha in Kolkata are companies trying to enhance their brand awareness and grow in size and reach. Traditionally, NGOs have not done well in livelihood because of their antipathy to markets. That’s changing, says Chhiber, as people are increasingly seeing sense — or rather rupees — in going commercial, especially with artisans sharing in the spoils. Udaipur’s Rangsutra, which is modelled on Fab India and is also its supplier, wants to boost its Rs8-crore turnover by jump-starting online sales, says managing director and founder Sumita Ghose.
That’s good news for the thousands of artisans in the country who can finally find a ready market for their products.