Bottlenecks in branding exportable productsMarket research becomes meaningful when it focuses on exploring new markets.
As per the Trade Policy 2009, Commodity Development Programmes need to be implemented under two separate and pre-identified groups. The first group represents a special focus area that consists of labour intensive goods that are already established in export markets such as (i) Readymade garments, (ii) Carpets and woollen goods, (iii) Pashmina and silk products, and (iv)Handicraft goods. Under the thrust area development group, priority would be given to goods that have high potential for exports such as agriculture, forest-based produce, gems, gold and silver ornaments, processed leather, and so on. The Trade Policy 2015 has added more items to make it an overall group of 26 goods and seven services. Factors such as backward linkages, scale of production, market exploration and quality control do not seem to have been taken into consideration while making the list.
Branding of products and services do call for sincere efforts for building and enhancing their identity and sustainability. Even though their quality meets international standards and their huge export potential, governmental failure to formulate appropriate and pragmatic branding pursuits has resulted in barriers while exporting them to overseas markets.
Challenges of branding
Carving out a sustainable niche in international markets through effective branding holds the key to reducing the trade deficit besides helping in import substitution. People are willing to pay a premium when the products resonate with a particular brand. Nepali carpets were branded with the stamp of the Nepal Good Weave Foundation (earlier Nepal Rugmark Foundation) which not only addressed child labour issues but also made the carpet weaving and spinning sectors viable. Exports of pashmina products too received a fillip once they got branded as Chyangra Pashmina.
The reality is that serious and rigorous branding experimentation has never been put to practice even for niche products such as hemp. Local requirements are generally overlooked while considering branding interventions for international markets. Branding efforts in the Nepali fabric sector has not been given due attention. A downward spiral in the volume and value of trade involving most exportable goods with huge potential is testimony to this fact. The annual foreign trade statistics of 2019-20 show that woollen carpets and readymade garments account for 6.30 and 4.45 percent of Nepal's total exports respectively. As per the Trade and Export Promotion Centre, carpet and pashmina exports declined by 4 percent each between 2016 and 2020. Readymade garments which held a 48.75 percent share of Nepal's total exports in 2000 plunged to 18.38 percent in 2009, suggesting the imperativeness of branding as a key intervention.
Successful branding of a product requires an enabling environment in the form of infrastructure encompassing regular power supply, IT connectivity, roads, warehouses and other government support, skilled manpower, relocation of factories and related logistics. It is the lack of institutional and policy support mechanisms that has led to the failure of branding of Nepal garments. Export promotion zones have proved to be ineffective and even fizzled out. They failed to attract investments, and always had issues such as proximity and accessibility for entrepreneurs. As per a study by South Asia Watch on Trade, Economics and Environment (SAWTEE), exporting goods from Nepal takes 44 days on an average and costs $1,599, which is the highest in the region.
Nepali exportable products should reach the stage of mass production while carving their own niche to be able to stand as an independent brand. To achieve this, Nepali brands may keep the Bangladeshi readymade garment segment as a benchmark. Marketing strategies generally need to precede strategic branding efforts. Brands are required to get accepted locally before they make forays into overseas markets. This is true of the Nepali apparel market that is flooded with several international brands. Local traders claim that their brands are 30 percent cheaper compared to imports from India and China. Thus, to stay in business, our local products have to have the competitive edge over foreign brands in terms of pricing. Thinking about both forward and backward linkages could add to the authenticity of the apparels, the product's superiority and price competitiveness. Certificate of origin helps to enhance the credibility of fabric brands and make a mark through their exclusive designs that are in demand in international markets.
The fabric sector is empowering marginalised and disadvantaged communities besides aiding social transformation by providing a better lifestyle for the working class in Nepal. Branding efforts can highlight and publicise this aspect and become successful in enhancing a sense of “ethnocentrism” among Nepali consumers. Today, consumers have easy and thorough digital access to both local and international brands. So, a complete understanding of changing customer preferences and shifts in their perceptions is the sine qua non for all branding initiatives. Consumers resonate well with those brands that provide quality or value for their money or give a sense of prestige and social status.
Innovate or perish
There are several sector-specific institutional impediments and legal loopholes, and governmental constraints. To overcome them, empirical research that is need-based has to be carried out. For this, the government and associated institutions are expected to invest their time, energy and money. This entails a purposeful segmentation, targeting and positioning analysis of the target customers that we intend to reach, both within and outside Nepal. Additionally, garnering the viewpoints of consumers and getting their perspective with respect to the marketers' branding initiatives become a critical factor.
Market research becomes meaningful when it focuses on exploring new markets rather than on serving the existing ones. All brand creation and communication exercises involving exportable products call for sincere and dedicated efforts on the part of all stakeholders of the ecosystem. Identification of market needs, both domestic and international, especially in terms of colour patterns, thickness of the material and so forth become a necessary preliminary in all such research pursuits. As the adage goes, innovate or perish. Local traders engaged in the export business should not just whine about the drastic contraction in their turnover but respond creatively to their challenges.