Iranian Handicraft Exports Crippled by Poor Marketing

EghtesadOnline: Iran’s handicraft exports in the last fiscal year (March 2015-16) amounted to $174 million, registering a 13% increase compared with the previous year, said the director of Handicrafts Department’s Trade and Exports Office at Iran’s Cultural Heritage, Handicrafts and Tourism Organization.

News ID: ۷۳۹۹۳۵

20 February 2017

“The figure only pertains to handicrafts, excluding the export of carpets and traditional jewelry as well as suitcase trade,” Pouya Mahmoudian also told Financial Tribune at the 27th National Crafts Exhibition held in Tehran’s International Fairgrounds from February 16-19.

Producers from 31 provinces showcased their products in more than 170 stands at the exhibition.

Iran, together with China and India, says the official, is among the world’s top three producers of handicrafts.

“There are over 295 branches of handicrafts in Iran, each having their own customers and usage. The most well known among these are felts, tribal rugs, glasswork, pottery, ceramics and tiles, traditional furniture, copper and brass ornaments, woodwork [including mosaic, wood carving and inlaid), enamel work and engravings. Small, medium-sized and large production units are active in the country,” she said.

“Unique designs and patterns as well as distinctive branches of activity enable Iranian products to compete with other countries in the international market, yet prices must come to a balance”.

Mahmoudian noted that for a product to be exported, it has to meet certain criteria.

“One of the most important factors is the possibility for customers to be able to order what they want in terms of quantity, design, color and size. Any firm that is capable of meeting customer demands is qualified to embark on exports,” she said.

Stumbling Blocks

The official noted that impediments facing handicraft exports are more or less the same ones other producers and exporters of non-oil commodities are struggling with.

“High transportation cost is one of them. Another concerns participation in exhibitions abroad, which is costly and most producers of handicrafts cannot afford. There is also the issue of [lack of] banking facilities,” she said.

Mahmoudian said the government is expected to provide facilities with reasonable interest rates to both producers and exporters of handicrafts, since people active in this field are generally financially weak compared with other producers and exporters of non-oil products.

“Publicity and marketing problems also hamper exports. We should invite foreign traders and delegations to visit our exhibitions, and include handicraft merchants and producers in Iranian trade delegations sent overseas,” she said.

Small But Firm Steps

Mahmoudian noted that publicity packages, including films and video clips, are being prepared to introduce Iran’s handicrafts and its long history.

“We have launched a specialized store selling Iranian handicrafts in the Netherlands and plan to expand such stores around the world. On top of that, we have to carry out field studies and learn about customer preferences in different countries and then produce works on the basis of our findings,” she said.

Producers attending the exhibition unanimously believed that the domestic market is doing quite well and there are no major problems hindering production. Yet, they were discontent with export conditions.

Despite the aim of reducing the country’s dependence on oil exports, the government seems reluctant to grant support to exporters of handicrafts as one of Iran’s main non-oil commodities.

Mohammad Hossein Moezzoddin, sales manager with Niknezhad Handicrafts, producer of calico and enamel work, said they have no problem in procuring the raw material since most of them are domestically supplied.

“We must lower our prices to be able to sell our decorations because at present, people’s financial situation is far from ideal and they want something to adorn their houses with. They don’t really care about the craftsmanship and art that goes into the product,” he said.

He said exports are gradually gaining momentum, especially after the Joint Comprehensive Plan of Action came into effect in January 2016 which led to the removal of banking sanctions.

“We have direct exports to Pakistan, the littoral states of the Persian Gulf and Eastern Europe. Yet, our products head to China and Japan through suitcase trade,” he said.

The official said the Customs Administration demands tariffs on goods returning to Iran after attending foreign exhibitions, believing that we are importing them.

“Although there are plenty of evidence as to the contrary, we are cast into the labyrinth of bureaucracy, which is a nuisance. Taking part in foreign expos is the least a producer can do and oftentimes this is done with a lot of difficulty. We expect the government to support and facilitate such activities and not to add to the stumbling blocks,” he said.

Moezzoddin believes the main problem hampering handicraft exports is that producers are left to do the marketing by themselves.

“This is wrong. Producers don’t have the knowhow for marketing and more often than not what they do in this regard turns out to be ineffectual. Moreover, engaging in marketing detains them from their main field of expertise, which is production,” he said.

Simple Solutions

Abbas Ali Ayyoubi, manager of Nafis Khatam—producer of inlay ornaments and handicrafts, said due to problems over sales, they had to lay off workers.

“For sales to increase, two things must be done. First, the government should support and facilitate exports, and second, measures must be taken to attract tourists. Foreign visitors are not only customers of handicrafts but can act as ambassadors by introducing Iranian art overseas,” he said.

The seasoned businessman further said producers lack the financial means to advertise their products or go around the world looking for new markets.

“Iran’s commercial and cultural attaches in other countries must take on the responsibility and use marketing experts to inject new blood into the veins of the industry,” he said.

Echoing his colleagues, Hamid Reza Hosseini, manager of Negin Naghsh-e-Jahan Company—a producer of copper ornaments, turquoise work, engravings and filigree, believes production is doing well but exports are lagging behind.

“We as producers are equipped with the knowhow of production and don’t have the marketing skills. This is where the government must step in. Trade Promotion Organization of Iran and ICHHTO inform us about international exhibitions and might grant some financial aid for us to take part in these events. Yet, that’s all about it,” he said.

“What we really need is to be assisted in negotiations with foreign artists and economic players in the field to be able to find sustainable markets.”