Disrupting the fashion industry with craftsmen of Indonesia
It all started 6 months ago when I caught up with my friend, Yang. She’s an aspiring fashion designer who had plans to launch her own label after graduating from University. When we met, Yang had just returned from a trip to Hang Zhou, China, where she had gone sourcing for materials and manufacturers who can enable her dreams.
However, it proved to be extremely difficult because of 3 reasons. First of all, finding high-quality production wasn’t easy and would probably require some trial and error before finding the right one. Even if she managed to find one, there’s the second issue of a hefty upfront payment to produce a minimum order quantity likely to be in the hundreds or thousands for each design. Well, assuming she could afford all that cash, she will end up worrying about marketing and selling of the inventory on hand.
And I thought, surely, there has got to be a better solution to this. So, I started speaking to other aspiring fashion designers like Yang and found these to be a common deterrence to them.
Later on, I met Mulyadi, CEO of MAKERSCUT, who was on a mission to save the crafting industry in his hometown, Indonesia. He told the story of Rachmat, a 2nd generation leather shoe craftsmen in Indonesia who was losing passion in his trade. Due to a lack of opportunities in the domestic market, they were often working with inferior materials, poor designs and had limited access to machinery to improve their work.
It occurred to me that designer’s main barrier of large quantity productions could have been solved with the help of craftsmen like Rachmat, who were operating in much smaller capacities compared to manufacturers she found in China.
With these in mind, I started looking into the potential of the fashion industry and found it to be a huge US$3 trillion industry. Just looking at Thailand and Indonesia alone, the size of the industry amounted to over US$20 billion. It was clear to me that this will continue to grow with demographics becoming increasingly affluent.
On the sufficiency of craftsmen, a survey by the Bank of Indonesia cited a total of 3.5 million craftsmen available in Indonesia. This represents the size of the craftsmen network we can provide access for fashion designers looking to produce items in much smaller quantities and with a high level of craftsmanship.
In addition, according to the fashion industry research report by Deloitte in 2016, consumers are gradually placing greater emphasis on craftsmanship over brand prestige, with increased demand towards new and emerging designers rather than established ones.
By bringing together designers, consumers, craftsmen, I was convinced that MAKERSCUT would be my next startup adventure. And that we could effectively have great designs, funding sources and high-quality production all-in-one platform.
How it works is pretty simple, there are 4 steps required to launch a product with MAKERSCUT. Submit sketches of your design for the production of a prototype at our sampling facility in Indonesia. Once the prototype is finalized, we’ll take the necessary steps to launch it as a crowdfunding campaign to accumulate pre-orders. The project goes into mass production with our network of craftsmen only if it achieves the minimum goal of ~50 orders. In this way, consumers would have already paid for the production and designers will not have to pay hefty amounts to launch their products.
Sounds all nice and rosy, but in truth, low margins and low volumes we faced initially were a real challenge to the sustainability of the business. Therefore, moving into 2017, our business model had to incorporate multiple revenue sources, from prototyping fees to sale of materials.
To sum it up, while we work on enabling fashion designers, the route to business sustainability has been anything but easy. But I remain optimistic and look forward to dealing with new challenges as we continue to scale our operations beyond Indonesia. I welcome any suggestions, guidance or support to help advance MAKERSCUT to the next level.
P.S. Stay tuned for as we gear up for a series of product launches in March 2017!
The Atone Burnished Leather Sneakers in Grey.
The Asfallen Phone Wallet in Olive, Cream & Navy.