A.Khulangoo: Our goal is to support craft studios and help artisans to enter international market

R.Adiyasuren

2019-07-16 10:11 GMT+8

This time we invited a woman entrepreneur in our Startup Business column, who is working towards creating an e-commerce platform that offers one of a kind gifts and handicraft items that everyone could buy without leaving their home.

A.Khulangoo, Executive Director of “Simplood Tech” LLC, introduced “Geru” online shopping portal and mobile application designed to help Mongolian artisans to expand their handicraft market both nationally and internationally.

She founded the company with her husband in 2017, and now they are a team of five working towards a common goal.

-Let’s start our interview with a question on how everything started. How did “Geru” start?
-Founded in October 2017, our company specializes in building websites and mobile apps. Geru, a mobile application, is the first fully tested product of our company. Three years ago, our family set forth a goal to launch a startup business. As such, we started development of our first fitness app. Unfortunately the project failed. Not long after that, we had a wedding ceremony during which we received many gifts that even now fills us up with happy memories. My personal favorite is a wooden frame with signatures and warm wishes from all the guests. Every time I look at that frame, my heart fills up with joy. When you think about it, people do meticulous research to find the perfect gift. Unforgettable and precious gifts are more likely to create long-lasting memories. However a place that offers such gifts didn’t exist, so we decided to take the idea and turn it into a business.

We realized that arts and crafts showcasing unique history and traditions of Mongolia can be sold not only in the domestic market, but also internationally

We realized that arts and crafts showcasing unique history and traditions of Mongolia can be sold not only in the domestic market, but also internationally. Thus, we are working to make our idea a reality. 

-As I understood, you are aiming to sell and market unique handmade items online. How many artisan studios joined your platform so far?
-“Geru” means home-based production. About 80 percent of craft studios that joined our platform turn their ideas into a handicraft product at home. Thus, we chose a name that represents the idea of making at home.

The first craft studio to join us was “Only for him/her”. They offer variety of notebooks designed as per customers’ needs and wants. I met them three years ago when I attended a training “Let’s learn to make a notebook only for him/her”. Today we are business partners. Since then 40 craft studios have joined us and now over 300 handmade items are available for purchase on our website and mobile application.

-I learned that you introduced a delivery service this February. How is the service uptake?
-We were able to secure some orders without marketing efforts. We fulfilled about 100 orders since our first order was placed. Initially, we used to do the delivery ourselves, but as sales increased it became hard for us to manage. Therefore, we are working with “Shonkhor” delivery and Mongol post.

-As you said, your platform does not only save time, but also creates many advantages to new artisan-entrepreneurs. What are the key benefits craftspeople would enjoy by joining the platform?
-New entrepreneurs or craftspeople usually don’t have stores or sales channels, so our goal is to fill that gap. In addition to providing an e-commerce platform, we are interested to support the studios in many different ways. Craft studios make beautiful products, but due to lack of human resources they face challenges with respect to managing their Facebook page, providing delivery service, product packaging and many other tasks. Therefore, we try to support them in those areas. We only want the studios to improve their products and create more appealing items. We want to support them to make items that could be marketed internationally.

When we first started, we only thought about the possibilities of creating an e-commerce platform, but not once we thought about what could be done next or what kind of challenges craft studios faced. Today’s Geru was created by meeting people and listening to their ideas and stories.

Our idea is to support craft studios and pave the way for entering international market.

We require that the products are made with expertise or know-how and offer advantages that differentiate them from other similar products

As I observed, artisans sell their products through retail shops, but this arrangement is very costly. The profit margin for retailers is 40 percent, whereas artisans themselves make only 5 to 10 percent of the profit. Therefore, there is a huge opportunity to reduce such costs.

Mongolians are not used to online shopping, so sometimes people don’t really understand why it is important to build an e-commerce platform. Many great artisans are wary of online shopping. They tend to be overly cautious when offered to create a new sales channel. Thus, I recommend them to try out any e-commerce platforms out there. It’s doesn’t have to be ours. There is nothing to lose. It is important to have different sales channels and craft studios should be easy to find via online search. They should act on this opportunity without fear or procrastination. Over 200 craft studios are on our list and almost half of them are skeptical about the idea. Online shopping offers huge growth opportunity, therefore I would definitely recommend trying it out. E-commerce platforms create greater opportunities as compared to traditional brick and mortar stores. 

-What are the requirements for joining “Geru”?
-Artisans should be making creative handmade items. We require that the products are made with expertise or know-how and offer advantages that differentiate them from other similar products. We do not increase the unit price of an item. Our policy is to offer the products at the market price. Thus, the price on our website is same as the price a customer would pay if they were to buy directly from the craft studio.

-Entrepreneurs often talk about challenges they face in shifting their mindset from being an employee to becoming an employer.  
-My husband and I both quit our jobs to start the fitness app project. But we failed within a very short period of time, I am not sure if I should call that luck or not. That was not long after I gave birth to our baby. We started having financial difficulties, therefore, my husband got a job. As my husband was working, we used to work on “Geru” in the evening or on weekends. I was in charge of UX and documentation, and my husband was developing the website and application. 

There were so many problems. Everything was on us. We couldn’t even afford to get sick. It’s very important to have clear and well-defined goals. Without them, you will fall into a trap. Clearly defined and achievable goals pave the way for success.

In the beginning, we believed that we were doing something useful and we had high hopes that people would receive it well. However, the response wasn’t quite so positive. In such situations, it was important to lower our expectation so that we don’t get discouraged. 

Two of us started this journey, but now we’re a team of five including a data analyst who primarily works on developing an artificial intelligence driven search engine, a marketing officer and a volunteer. None of us gets paid, but we believe in our work and we have a vision, which serves as a driving force. For the past seven months, we have worked towards our goal without pay.

We realized that the overall process has been working well for the last three months, therefore we started to offer the product to potential customers.

-There are many training opportunities and other types of support available for startup businesses. I heard you also received a support. Could you please share about your experience?

-First, we participated in “Startup weekend”, a three-day event, which provides an opportunity to develop and present your product. During this startup crash course, we presented our product to clients for the first time. It was an amazing three days. Since then, we were eager to attend similar training courses and later learned about Women’s Business Center (WBC). Initially, we were just doing research to find more craft studios, but we found many artisans on a picture which led us to WBC. Thus, our search for craft studios helped us to become a beneficiary of WBC. Later, I learned that WBC is funded by the Korean International Cooperation Agency (KOICA) and implemented by the Asia Foundation in partnership with the City Municipality of Ulaanbaatar, Development Solutions NGO, Mongolian National Chamber of Commerce and Industry, and Golomt Bank. I attended 2-3 training at the center and realized it could be very useful for me as I didn’t have prior business experience. Later, when an incubator program for tech Startups launched, I applied and I was accepted.

-By accepted do you mean you received funding?
-Yes. I was involved in a 4 month-intensive incubator program and received funding of $1,500. We used to share a computer among us, so we purchased a new computer with the funding. In addition to the financial support, I am very thankful for everything I have learned from the incubator program. I learned about different aspects of running business including new possibilities, issues that we should be aware of, etc. The program has helped me to grow both personally and professionally as an entrepreneur and made an immense contribution to our company’s development.

We have a problem with marketing. As we were unable to sell or deliver our product to potential customers, we asked WBC to help us on that. The center provided training and advise related to marketing our product and helped us meet with successful business people.

We are fortunate that we were able to build a mentoring relationship with B. Bayarjargal, a very experienced and competent mentor who works as a manager at “UNIT” LLC. When we told her that we were planning to enter international market, she advised us to start from Inner Mongolia and Buryatia. She not only provided advice and guidance, but also introduced us to a person who has extensive experience and knowledge about the Inner Mongolian market. This has laid the foundations for our next steps. Our initial meeting has been very fruitful; thus, we scheduled our next meeting in July.

Our mentor also advised us to establish an “Association of Craft Producers” which would provide advice and guidance for craft studios and present the needs of artisans to relevant government authorities.

She also provided invaluable advice regarding tourists’ purchasing needs and wants based on her experiences with tourists. As such, we are very appreciative of everything that WBC and our mentor had given us.

-I have seen many tips and advices on your website.
-As online shopping is a fairly new shopping practice in our country, it is important to educate the consumers and provide relevant information. In addition to that, people say that handicraft items aren’t well designed and usually lack attention to detail; therefore, we’re focusing on providing information to highlight artisans’ skills and quality of handmade items. 

-As the overall process has been working well for the last three months, you are planning on offering the product to potential customers. At the end of our interview, I would like you to share your future goals with us.
-We have developed five-year and ten-year plans. Global trend is now more focusing on offering personalized products designed to meet specific needs of an individual customer. For instance, according to the latest research, 80 percent of Nike’s profits are generated from the sales of “unique and customized” products. Therefore, we believe that there is huge market potential to export customized and one-off items to international markets.

Global trend is now more focusing on offering personalized products designed to meet specific needs of an individual customer

As per our conversation with tourists, even though Mongolia has many cultural and historical handicraft items to offer people can purchase them only if they visit Mongolia, and in some cases, the tourists find it difficult to find the right items for them. It is important that our products are well packaged with unique design elements, thus we are paying greater attention on the packaging to move forward with our goal to enter international markets.

We are doing a research. Our plan is to initially enter markets of countries that have historical ties with Mongolia including Inner Mongolia and Buryatia. Later, we are planning to expand to Europe and other countries that value handicraft items. We are planning to launch our business in Inner Mongolia in November 2019.

Delivery services that are currently available in Mongolia are not well managed. Courier delivery and shipping services provided by DHL and FedEx are more sophisticated and allow customers to track their packages. Thus, once Geru platform gains traction, we are planning on developing a system for delivery services.

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