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Report -Market assessment and
Value Chain Analysis of Stitched
and Embellished Fabrics Submitted to British Asian Trust
Ayesha Humaira
Head of Qualitative
Aamir Shaikh
Director Special Projects
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Executive Summary Overview of the Market
Embellishment industry has grown manifolds due to population explosion in Pakistan. This is
why each sub category of embellishment has grown in numbers as compared to past two decades.
From 2011 to 2015, the size of the retail pie has increased 38.5% and the total value of organized
retail sector is estimated to be $ 152 billion.1
In the realm of embellishment, machine embroidery is the biggest segment. It has witnessed
phenomenal growth in past decade and will continue to do so in the foreseeable future. Machine
embroidery on lawn has changed a common place product into a valuable one for which
customers are ready to pay price premium.
In comparison to machine embroidery, the size of hand embroidery has shrunk over the past
decade or so. Hand embroidery appears to be in a transitional phase. It is slowly disappearing
from mass market and resurfacing at the specialty end of the market. Lack of design innovation
is making mass market wholesalers lose the war against their innovative rivals such as brands
and designers.
Hand embroidery is expected to grow in next two years because it has made a comeback on
international high-end fashion scene during the past two years and this trend has got a
trickledown effect. Some national brands have just started stocking limited pieces of hand
embroidery too along with their regular machine embroidered portfolio. This entails that demand
for hand embroidery is there but it comes from niche clientele who are catered by designers rather
than mass market retailers.
Though all sub categories of handwork like embroidery, adda work, chunri etc are sizable enough
for new entrants but adda work offers best return on investment. Price margins are the highest in
adda work because end users are willing to spend on weddings. Unlike hand embroidery, adda
work does not have any substitute as yet and it is going to be done with hands in future too.
Lawn embroidery gets to be sold in highest number even though profit margins can be modest
particularly for mass market products.
1 Aurora.dawn.com, July 14, 2017
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Hand Embellishment Value Chain
The unorganized sector of fabric embellishment is largely buyer driven. Artisans are undoubtedly
the weakest link in the value chain and each aspect of their work is controlled by the buyers. They
possess little bargaining power which results in low returns. Switching from lower to higher
paying buyer like home based entrepreneurs or brands is not easy because it requires not only
greater market access but also higher level of skills and professionalism.
Middlepersons exert undue advantage over the artisans. If the artisans have market linkages,
they tend to earn better. This entails that any organization working for the betterment of artisans
and aiming at providing technical assistance to them should ideally focus on direct market access
and skill enhancement.
End users emphasized that designing for hand embroidery needs to be modern and trendy. A
professional designer can be hired to help artisans in this regard. Following training needs for
artisans were identified by participants of this research:
• Training in professionalism.
• Up gradation of skills for neat and intricate work.
• Training on using new colour schemes instead of rudimentary colour combinations.
• Usage of new fabrics like swiss lawn, cotton net etc.
Government’s Focus
Hand embellishment is a sub category of textile industry which accounts for almost 60% of
Pakistan’s exports. However, it has been in doldrums for the past few years due to energy crisis
in Pakistan and exports of textiles have shown a steady fall. When successive governments have
failed to meet the demands of textile sector, it is highly unlikely that a small part of it receives a
lot of attention or funds. Handwork is such a small part of overall textile sector that its visibility
on Government’s radar is quite low.
In spite of overall dip in textile exports, export of ready-made garments has shown an upward
trend for the past two years. According to Pakistan Bureau of Statistics, an increase of 4.2% and
4.15% in value of readymade garments was recorded in 2016 and 2017 respectively.
Keeping this trend in view, Punjab Government’s thrust appears to be on apparel manufacturing
as it is building a huge apparel zone near Shiekhupura. In vocational institutes run by the
government, more emphasis is placed on stitching courses than textile hand embellishments.
Projects or schemes for hand embellishment in these institutes are mainly funded by international
organizations.
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Handwork and Exports
As mentioned earlier, export of readymade garments has increased in the past two years. Hand
embellishments are done on readymade garments which means that demand of hand
embellishment will also increase in near future.
Sourcing and export companies in Pakistan do need a partner who can help them in processing
orders from their international clients. However, it seems unlikely to them that unorganized
sector has the capability to produce desired quality and quantity or meet the deadlines effectively.
Their reservations need to be addressed in an effective manner.
National and International Markets
Nationally, Lahore, Karachi and Islamabad are the main consumption markets of handwork.
Almost all market actors who are involved in exports of handwork whether they are mass market
wholesalers, sourcing companies or entrepreneurs agreed upon three major international markets
where the demand of handwork is very high. These markets are: UK, Italy and France.
Market Size and Value
Adda work market in the cities surveyed is estimated to be $ 480 million and hand embroidery
around $ 360 million.
Trends and Customer Demand
Innovation is the holy grail of handwork and customers have never been more demanding. Far
from being minimalistic, modern customers desire complex beauty produced by fusion of
different methods and materials. Demand for delicate and intricate hand work at reasonable price
was voiced by all end users.
Designing of hand embroidery needs to be in sync with the zeitgeist. Major consumers of hand
embroidery are middle aged women or senior citizens. It is perceived to be a product worn by
older generations and young consumers find it monotonous. Exclusivity and modernity are the
two aspects for which women of all ages are ready to pay price premium. Any entrepreneur
taking up hand embroidery business needs to bear these in mind.
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Non-Clothing Items
Hand embellishment work on non-clothing items is so rare that there are no shops dealing solely
with it in the markets of the cities surveyed. Retailers sitting even in handwork specific markets
sell only 5-10 % handwork and rest of the stock comprises of machine made stuff. End users
mostly buy non clothing items for gifting purposes and handmade non clothing items are only
made through special orders. Handmade bedsheets of block printing, ralli, resham work, Kanta
work and antique work are the only non-clothing items that sell in good numbers in Bahawalpur,
Multan and Karachi.
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Table of Contents Executive Summary .................................................................................................................................. 2
1. Project Objectives and Methodologies .......................................................................................... 12
Project Objectives ........................................................................................................................ 12
Achieved Sample – Pilot Phase ................................................................................................. 12
Achieved Sample – Main Phase ................................................................................................ 13
Field methodology – Recruitment ............................................................................................ 13
Field Methodology – Limitations ............................................................................................. 14
Information Synthesis Methodology ........................................................................................ 15
2. Overview of the Base Cities ............................................................................................................ 16
Southern Punjab .......................................................................................................................... 16
Overview of the Base Cities – Bahawalpur ............................................................................. 16
Multan vs Bahawalpur ............................................................................................................... 17
Overview of the Base Cities – Bahawalnagar.......................................................................... 18
Overview of the Base Cities – Gujranwala .............................................................................. 19
3. Overview of Embellished Fabric Market ...................................................................................... 20
Overview of the Market ............................................................................................................. 20
Machine Embroidery on Lawn .................................................................................... 20
Fancy Machine Embroidery ......................................................................................... 22
Adda Work ..................................................................................................................... 22
Hand Embroidery .......................................................................................................... 23
Chunri .............................................................................................................................. 24
Block Printing and Gota Work ..................................................................................... 25
Fusion .............................................................................................................................. 26
Overview of the Market Numbers ........................................................................................... 28
4. Hand Embellishments and Exports ............................................................................................... 28
Textile Industry of Pakistan ....................................................................................................... 28
Textile Industry Export Landscape .......................................................................................... 30
General Export Focus of Government of Pakistan ................................................................. 30
Handicrafts and Exports ............................................................................................................ 31
Punjab Government’s Initiatives .............................................................................................. 33
Hand Embellishment and Sourcing Companies .................................................................... 34
Quality ............................................................................................................................. 35
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Quantity........................................................................................................................... 35
Timely Delivery .............................................................................................................. 35
Other Issues .................................................................................................................... 36
The Biggest Stumbling Block ........................................................................................ 36
Following International Export Quality Parameters need to be adhered to ......... 36
Trends .............................................................................................................................. 37
Hand Embellishments and Small Exporters ........................................................................... 37
5. Market Segmentation....................................................................................................................... 39
Market Segmentation based on Product Quality ................................................................... 39
Segment Wise Buyer Requirements ......................................................................................... 40
6. Value Chain Analysis ...................................................................................................................... 40
Value Chain-Flow of Activities – Embroidery, Gota, Mukesh ............................................. 40
Value Chain-Flow of Activities – Adda Work ........................................................................ 40
Design .............................................................................................................................. 41
Circulation....................................................................................................................... 43
Production ....................................................................................................................... 43
Delivery ........................................................................................................................... 43
Selling .............................................................................................................................. 44
Distribution of Gain ....................................................................................................... 45
Value chain – Embroidery, Gota Work, Mukesh .................................................................... 46
Value Chain – Adda Work......................................................................................................... 47
Value Chain Actors – Roles and Responsibilities ................................................................... 47
Value Chain Governance Relationships .................................................................................. 53
Value Chain Governance Relationships – Embroidery, Gota Work, Mukesh ................... 54
Value Chain Governance – Embroidery, Gota Work, Mukesh ............................................ 54
Value Chain Governance Relationships – Adda Work ......................................................... 57
Value Chain Governance Relationships – Adda Work ......................................................... 58
7. Market Size and Value Estimation ................................................................................................ 60
8. Non Clothing Items ......................................................................................................................... 63
Non Clothing Items with Hand Embellishments ................................................................... 63
Hand Embellished Bedsheets .................................................................................................... 64
9. Trends and Customer demands ..................................................................................................... 67
Innovation – A Dire Need .......................................................................................................... 69
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10. Price Margins .................................................................................................................................... 71
Price Margins – Mass Market Embroidery .............................................................................. 71
Price Margins – Up Class Embroidery ..................................................................................... 72
Price Margins – Mass Market Mukesh/Kaamdani ................................................................ 72
Price Margins – Up Class Mukesh/Kaamdani ....................................................................... 73
Price Margins – Mass Market Gota Work ............................................................................... 73
Price Margins – Up Class Gota Work ....................................................................................... 74
Price Margins – Mass Market Applique Work ....................................................................... 74
Price Margins – Mass Market Adda Work .............................................................................. 75
Price Margins – Middle Tier Adda Work ................................................................................ 75
Price Margins – Non Clothing ................................................................................................... 75
Price Margins – Imported Bedsheets from China ..................................................... 76
Price Margins – Mass Market Block Print Bedsheet ................................................. 77
11. Major Market .................................................................................................................................... 77
Major International Market for Handwork ............................................................................. 77
UK .................................................................................................................................... 78
Italy & France ................................................................................................................. 78
USA & Canada ............................................................................................................... 79
KSA & UAE..................................................................................................................... 79
Potential issues ............................................................................................................................ 80
Major Consumption Markets for Source Markets .................................................................. 80
12. Pros and Cons of Different Businesses .......................................................................................... 81
Comparison of Businesses ......................................................................................................... 81
Adda Work .................................................................................................................................. 81
Hand Embroidery ....................................................................................................................... 81
Machine Embroidery .................................................................................................................. 82
13. Constraints Analysis ........................................................................................................................ 83
Constraints of Wholesalers and Retailers ................................................................................ 83
Constraints of Exporters ............................................................................................................ 84
Constraints of Designers and Brands ....................................................................................... 84
Constraints of Workshop Owners and Retailers .................................................................... 84
14. Appendix ........................................................................................................................................... 85
Gender Sensitive Information ................................................................................................... 85
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Embroidered Products ............................................................................................................... 86
Cost of Setting up an Embroidery Unit of Two Machines .................................................... 87
Pre – Feasibility Study Commercial Embroidery Unit by SMEDA ..................................... 88
Disclaimer ....................................................................................................................... 88
Executive Summary ....................................................................................................... 89
Introduction to SMEDA ................................................................................................ 89
Purpose of the Document ............................................................................................. 90
Brief Description of Project & Product ........................................................................ 91
Critical Factors ................................................................................................................ 92
Geographical Potential for Investment ....................................................................... 92
Potential target Customers/Markets .......................................................................... 93
Project Cost Summary ................................................................................................... 93
Contact Details ............................................................................................................... 99
Useful Links .................................................................................................................. 101
Annexures ..................................................................................................................... 102
Key Assumptions ......................................................................................................... 104
Women Chamber of Commerce and Industry ..................................................................... 105
A specimen of Activities by Karachi Chamber ..................................................................... 106
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Figure 1 ...................................................................................................................................................... 26
Figure 2 ...................................................................................................................................................... 27
Figure 3 ...................................................................................................................................................... 27
Figure 4 ...................................................................................................................................................... 29
Figure 5 ...................................................................................................................................................... 29
Figure 6 ...................................................................................................................................................... 40
Figure 7 ...................................................................................................................................................... 41
Figure 8 ...................................................................................................................................................... 42
Figure 9 ...................................................................................................................................................... 45
Figure 10 .................................................................................................................................................... 46
Figure 11 .................................................................................................................................................... 47
Figure 12 .................................................................................................................................................... 54
Figure 13 .................................................................................................................................................... 57
Figure 14 .................................................................................................................................................... 60
Figure 15 .................................................................................................................................................... 60
Figure 16 .................................................................................................................................................... 86
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Table 1 12
Table 2 13
Table 3 40
Table 4 53
Table 5 61
Table 6 62
Table 7 81
Table 8 87
Table 9 92
Table 10 94
Table 11 94
Table 12 95
Table 13 96
Table 14 96
Table 15 97
Table 16 97
Table 17 98
Table 18 98
Table 19 99
Table 20 104
Table 21 104
Table 22 105
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1. Project Objectives and Methodologies
Project Objectives
To carry out a Value Chain Analysis and Market Assessment to develop demand-side data and
segmented buyer intelligence for embellished stitched & un-stitched fabrics in Bahawalpur,
Bahawalnagar and Gujranwala.
Results from this report will provide an evidence base for training, product development and
market linkage program design. In particular, the Value Chain Analysis and Market Assessment
should shed light on the status and viability of existing and potential markets and determine
which hold greatest potential for private individuals, small businesses and local enterprises to
increase their income through specific inputs like business development, product range
expansion, market viability, value addition, and quality improvement.
Achieved Sample – Pilot Phase
Table 1
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Achieved Sample – Main Phase
Table 2
Members of chambers of commerce were also entrepreneurs dealing in embroidery and adda
work. In the same way some wholesalers were exporters as well. In addition to interviews, market
observations were also conducted to understand market dynamics, what is being sold and at
what price.
Field methodology – Recruitment
After identifying the wholesalers and retailers who deal with handwork, field personnel
approached them and explained that they were conducting a survey on hand embellishment and
if they would like to participate in it. If they agreed, they were asked to share time and place of
their convenience at a certain date. All interviews of wholesalers, retailers, exporters were
conducted at their shops. Entrepreneurs, end users and some members of chamber of commerce
were interviewed at their respective homes.
Field methodology for this project comprised of many routes but the most used route was
commercial route since this project aimed at understanding the demand side of the value chain.
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Commercial Route
In the first leg, main markets and bazaars that deal with handwork were identified in each city.
These markets were specifically handwork markets or at least the markets where handwork could
be found easily. Next step was identifying wholesalers and retailers who were big enough to
provide a holistic picture of the sector, market and the city. This was easier in case of smaller cities
like Bahawalpur and Bahawalnagar but difficult for bigger cities like Lahore and Karachi which
is why in bigger cities, effort was made to recruit presidents of different market associations along
with other wholesalers and retailers.
Though most respondents recruited through commercial route were pre-recruited but in some
instances, some informants were identified within the course of the interviews and spot-recruited
by the moderator or the field team.
Snowball Technique
Snowball is a nonprobability sampling technique where existing study subjects recruit future
subjects from among their acquaintances. Since hand embellished clothes are not worn generally,
snow ball technique was used to recruit end users. Entrepreneurs and members of chamber of
commerce were also approached using references.
Field Methodology – Limitations
Identifying wholesalers and retailers who exclusively deal with hand embroidery in Karachi,
Lahore and Islamabad was an uphill task. Most wholesalers deal in hand and machine
embroidery both. Only a handful of wholesalers were dealing with hand embroidery exclusively.
After visiting many markets in multiple cities, it was learnt that wholesalers for clothing were
easier to come by while wholesalers for non-clothing items exclusively (except bedsheets) did not
exist in the market. In non-clothing items category, we talked to the ones who generally dealt
with non-clothing items and asked about the percentage of the handwork they sell.
Some wholesalers we met during the course of the project were reluctant to give exact numbers
of exports or sales they made. Therefore, questions had to be modified and made more general
in order to extract a reply. For example rather than asking the number of pieces sold in a month
by them, they were asked to break the market into small, middle and big wholesalers and share
the approximate number of pieces sold by them every month.
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Survey was conducted with only those respondents who gave their consent for it which means
that it is likely that we may have missed the most relevant person in a certain marketplace.
Chain analysis gets enriched if both sides of the story is listened to. However, it was not possible
since we did not adequately cover the supply side of the value chain. However, some facts have
come to be known as open secrets. For example, we do not have to conduct a supply side research
in order to know that home based embellishers are exploited. Everyone we interviewed (even the
exploiters themselves) mentioned this fact.
Not studying supply side of the chain also means that we have skipped the raw material side of
the value chain. This is why this document has skipped the raw material procurement step of the
value chain. Therefore, the issues and influences it can exert on the value chain are not known.
Market sizing is a comprehensive quantitative study with a sizable amount of time investment.
Since this research is a preliminary scan of the demand side of an unorganized sector, qualitative
route was chosen. Market size and value was determined through estimations shared by the
participants. This is why degree of accuracy of market sizing is not comparable with a
quantitative survey. Numbers shared in this document are directional at best.
Information Synthesis Methodology
This report uses combination of methodologies ranging from primary to desk research. Complete
information was not available in either type of researches which is why gaps were filled by
employing both. Piecing together fragments of information has revealed the big picture. Hence,
both the sources complement each other. This complementary nature of information is, however,
not to deny the fact that information from primary research figures much larger than desk
research which was silent on many fronts due to unorganized nature of the sector.
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2. Overview of the Base Cities
Southern Punjab
Field work for this project was conducted in seven cities, out of which three (Bahawalpur,
Bahawalnagar, Multan) are located in Southern Punjab.
The official statistics of 2010 count Punjab’s population at 93 million, 32 per cent of which lives in
South Punjab. Compared to other parts of the province, Southern Punjab has underdeveloped
communication networks, poor infrastructure, weak social services institutions, inadequate
agricultural inputs, and large gaps in municipal services. Exclusion and social marginalization
are widespread due to discrimination on the basis of caste, class, ethnicity, gender, and land
ownership. Poverty is characterized by low income levels, a weak asset base, and barriers against
efforts to reduce discrimination.2
Economic hardships compounded by periodic natural disasters, including droughts and floods
that destroy homes and livelihoods have added to financial woes and forced a large number of
population to live below the poverty line. Of 40 million people living below the poverty line in
Pakistan, an estimated 10 million are in Southern Punjab, with poverty levels between 48 and 64
percent in the poorest four districts.
Overview of the Base Cities – Bahawalpur
The historic city of Bahawalpur is known for its handwork production. Hand embroidery, chunri,
gota are specialties of the city. In recent years, machine embroidery with touch ups of hand
embroidery and adda work has also proved to be a popular category.
Hand embroidery is mainly done by artisans residing in villages around Bahawalpur. A great
majority of adda work is mainly done inside the city in workshops and small set ups called
“karkhana” (workshop)
Mukesh, taarkashi, chunri and gota are the main specialties when it comes to clothing. Chunri is
a famous technique of Saraiki speaking region as well as Sindh. However, chunri made in
2 Center for strategic and International studies.
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Bahawalpur, Abbas Nager is considered to be of superior quality than that of Sindhi origin or the
one made in other Saraiki speaking areas like Multan.
Hand Embroidery in Bahawalpur is available at extremely inexpensive rates due to cheap labor
force from surrounding villages. The Individual consumers and traders specifically come to
Bahawalpur to purchase low-priced embroidery as well as adda work.
Local customers in Bahawalpur prefer machine work more than hand embroidery because it is
so ubiquitous in their surroundings that it is no more a special thing for them. Those who buy it
mainly buy for their relatives living abroad or gifting purposes.
Neighboring city, Multan has taken advantage of this situation in Bahawalpur. Wage rates in
Multan are higher because travel distance for artisans is more in. Multani wholesalers and traders
buy embroidery from Bahawalpur and sell it in regional and international market with the name
of “Multani embroidery.” These pieces are sold at much higher rates in regional or international
markets.
Multan vs Bahawalpur
Multan is 5th most populous city of Pakistan while Bahawalpur stands at number 12. Multan is
seen as a major city with better facilities of education, health and infrastructure. It is connected to
the rest of the Pakistan and World through an airport. Multan covers an area of 781 square
kilometers and Bahawalpur is sprawled on an area of 237.2 square kilometers. In national
assembly, Multan has 6 seats while Bahawalpur 4. In provincial assembly, Bahawalpur has got
10 seats and Multan 13.
Multan has been historically representing Southern Punjab. It has got political and economic edge
over Bahawalpur. Multan wields power in politics too as many towering personalities in the
national assembly are from Multan. The last Prime Minister of Pakistan, Syed Yousef Raza Gillani
was also from Multan. Bahawalpur, on the other hand is not in the limelight both politically and
economically.
Multan Chamber of commerce and Industry has been demanding the government to establish an
economic zone in Multan so that it can reap the benefits of China Pakistan Economic Corridor
(CPEC). Multan claims its right to be the premier-center of the proposed Southern Punjab
province due to its importance in the region.
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Since Multan and Bahawalpur deal in the same business of ethnic embroidery, there exists a
professional rivalry between the two cities. Wholesalers in Multan are wealthier and invested
more in their businesses as compared to businessmen Bahawalpur.
Multan Chamber of Commerce and Industry is very active as compared to that of Bahawalpur.
When international exhibitions are announced, people from Multan chamber participate more
actively because businessmen in Multan can spare more money to be invested in exploring new
avenues for enhancing their business. Since all people who end up going to international
exhibitions are of Multan, the work they exhibit and sell there is known as ‘Multani’ instead of
‘Bahawalpuri.’ Chambers of Commerce are independent bodies and their activities depend a lot
on leadership in office.
Overview of the Base Cities – Bahawalnagar
It is an agricultural city where main professions of common people are:
• Farming
• Work in rice factories
• Shop Keeping
There is a shortage of skilled artisans in and around Bahawalnagar. SME owners stated this as
one of the reasons of shifting to machine embroidery. Other reasons of shifting to machine
embroidery include:
• Quick turnaround time
• More demand from buyers
• Less chances of mistakes
• Precision and fineness guaranteed
• No surprises at the end of a finished fabric
• Machines can do a lot of work that was previously done manually like gota, dory work, sequins, resham etc.
• The benefit of managing less human resource with more output is the basic reason of using machines for embroidery.
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Unlike Bahawalpur, Bahawalnagar does not boast of a lot of skilled artisans in hand embroidery.
There are two types of work categories produced in Bahawalnagar:
• Adda work
• Machine embroidery with a little touch up of hand embroidery or adda work
Stitching is considered to be a specialty of Bahawalnagar. There are stitching units present in
factories as well as separately in the city and women at home also stich for SMEs.
Most of the work produced in SMEs is exported to regional or international markets. Some large
sized SMEs either export themselves or sell to exporters.
Women in Bahawalnagar are not very skilled in handwork-both embroidery and adda work.
Unlike Bahawalpur, Bahawalnagar district is not famous for any hand work nor is cottage
industry developed there.
Women are given small work only like dupatta, trouser or some sequins work. Consequently,
they earn less. Women, however, demand much less than men for the same kind of work which
seems to be the reason they are employed by SMEs.
Overview of the Base Cities – Gujranwala
Gujranwala is famous for its cottage industry. There are many places where people have set up
small home based workshops. Women also work from home.
Adda work is the specialty of the city though embroidery work is also being done but its volume
is too small as compared to the adda work.
Wholesalers complain that ever since motorway has connected Pindi, Islamabad and other
smaller cities, customers and traders have stopped coming to Gujranwala and their businesses
have suffered huge losses. Since Gujranwala is connected through GT road only and it is rather
difficult to access it, their direct sales have suffered. Many wholesalers have started relying on
retail more even though earlier on, they would not have entertained individual customers.
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Main areas where adda work is sold are: Khajoor market, Raina wali gali, Nalkey wala chowk,
Dastageer Gali, Madni market, Qasayan Wala Gala etc. Main areas where women work at home
or where home based workshops are located are: Dhulley, Nawab Chowk, Alam Chowk, Awan
chowk, Marali Wala, Kumharan Wala Gala, ghorey Shah etc. Ladha Warraich, Kot Ishaq, Butna
wala and Sialkot by pass road has got proper factories where adda work is done.
3. Overview of Embellished Fabric Market
Overview of the Market
Overall, market of embellishment is divided into two main segments:
• Clothing
• Non clothing (Bed linen, cushions, curtains, clutches, handbags, table runners, wall hangings, etc.)
Clothing is significantly bigger as compared to non-clothing categories. In special markets,
clothes figure much larger than other categories. Retailers and wholesalers have their own
specialties that they deal in. Following are some of the sub categories that retailers and
wholesalers identified:
• Machine embroidery on lawn
• Fancy machine embroidery
• Adda work
• Hand Embroidery
• Chunri
• Block printing and Gota Work
• Fusion
Machine Embroidery on Lawn
“There is no business like the lawn business” is a common saying in Pakistan pointing towards
the profitability of it. Lawn is worn with or without embroidery but major chunk of it is
embroidered. There are almost 100 designer lawns brands and about 200 second tier brands.
Countless replica makers and third tier brands that are catering to low price segments.
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There are number of reasons why this business is thriving in Pakistan:
• Due to global warming, summer seasons has been protracted in Pakistan. In cities like Karachi, lawn is worn almost 12 months and in other warm parts of the country like Punjab around 8-9 months.
• Disposable income of middle class has been rising over the years which has increased branded wear.
• More and more young women are joining work every year and they need branded lawns as respectable office wear.
• Rapid urbanization has also played a part in making lawn a sought after summer wear.
• Expansion of informal economy has played a vital role whereby consumers have been pushed to spend within the country. Consumption accounted for 92% of Pakistan’s GDP during 2015-2016.
• As opposed to its start around half a century ago, lawn market has seen young and qualified fashion designers entering into lawn business who have changed its face from a mass product designed in mills to an haute couture item.
• A shift from centralized broadcasting to an open competition broadcasting system in Pakistan has also boosted lawn business. Multiple channels, programs and TV anchors and hosts wear designer lawns and set a norm to follow in fashion.
• Many textile brands found it hard to continue their export businesses profitably due to energy crisis in Pakistan and hence the rising cost of doing business. Operating within the country through a lawn retail brand seemed to be a viable option to them. Lawn has also earned a name for Pakistani textile industry which is why lawn is to Pakistan what silk is to china. This popularity abroad has increased acceptance at home as well.
Designer brands face the issue of cheap imitations but on the other hand, this is meeting the needs
of low to middle class. Resultantly, price bands for lawn have widened unreasonably- from 900
to 20,000 rupees depending on the brand, quality of fabric and design and type of embroidery.
Two thirds of Pakistani lawn business is unstitched lawn. Faisalabad has taken the lead in replica
lawns even though they are being produced in each major city of Pakistan. A number of factories
in Faisalabad have started producing their own lawn brands with each launching more than 50
designs a year.
Even though there are innumerable brands of all tiers in lawn business yet each year witnesses
many new lawn brands being launched which is an evidence of ever increasing popularity of
lawn. However, for every new entrant, competition is quite fierce.
Lawn business is doing so well in Pakistan that most players have not bothered to take their
businesses abroad even though it is demanded in many countries of the world.
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Lawn fabric can be a major export product and it has already been exported to UK, UAE,
Malaysia, India, Bangladesh, Sri Lanka and even North and South America.
Other than clothing, machine embroidery on cushions, throws, curtains, handbags etc. is also
being exported.
Fancy Machine Embroidery
Although technically this is machine embroidery but in general market, this category is dealt
differently and specialized shops and wholesalers exist for it. This category caters to light and
heavy party wear. It is different from everyday wear because of choice of fabrics and threads.
Fancy/party fabrics like silks, chiffons and banarsi are used. Threads are also fancy like silk and
other shiny silver and gold threads called tilla. This work is also adorned with stones, beads,
cutwork, shiny laces, piping and other embellishments.
Some hand embellishment on fancy suits is also used in addition to machine work in some cases.
This work is normally a little less in cost as compared to pure adda work. Adda work is more
specific to weddings while this category caters to party wear and is easier to carry since it’s mainly
thread work coupled with other embellishments.
Adda Work
Salma sitara, zari and zardozi are different names given to adda work which is the most opulent
form of embroidery. Indian royals used to wear clothes with patterns made of silver wires and
gold leaves. However, today, craftsmen make use of a combination of copper wire, with a golden
or silver polish, and a silk thread. It is done on a wooden frame called adda with a curved hook
called AR and needle.
Wedding business is quite a big deal in India and Pakistan. There are hundreds of shops,
boutiques and designer work readily available in every main city of Pakistan. According to the
shopkeepers and designers interviewed for this survey, margins are good in this work and even
though it is a seasonal business spanning roughly from October to March, it provides them with
enough revenue to last for the whole year.
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Heavy majority of retailers believe that this business has increased manifolds over the past decade
or so. Several reasons have been stated for this boost in the business:
• Population explosion is cited as the biggest reason for the boost in business. 60% of Pakistan population comprises of youth who need to get married in due time
• Wedding has always been considered to be a big occasion in sub continental culture and an occasion to splurge. However, in recent years plethora of TV channels and the advent of social media have made people show off more than they can afford to.
• Celebrity weddings and the air time they get as well as their social media coverage has risen people’s standard of weddings and wedding day dress to new heights. Resultantly, they are ready to pay the price premium for their wedding and dowry.
• People fear being mocked by society if they fail to spend ‘enough’. More often than not, this forces them to spend more than the resources they have.
• Entry of designers and small boutiques have also made people spend more in the name of customization.
Adda work market is turning into a retail model very fast due to high need of customization in
it. Wholesalers who used to do wholesaling exclusively are dealing with retail customer more
now because every bride needs to look different according to her resources.
Adda work is also done on clutches, table runners and cushions by the same artisans who deal
with clothing. However, this kind of work (except clutches) is done only on individual orders and
not available in the market. This is usually ordered by brides-to-be’s mothers who want it to be
part of their dowry
Hand Embroidery
Hand embroidery is becoming rare day by day. During the course of this study, it became difficult
to recruit wholesalers and retailers who deal in hand embroidery exclusively, particularly in big
cities. Even in Bahawalpur and Multan, wholesalers and retailers have started stocking some
machine work along with hand embroidery since they do not want to send the customers away
who come demanding machine embroidery.
Many wholesalers and retailers were in the process of winding up or reducing their stocks of
hand embroidery, particularly mass market ones.
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Mass market wholesalers believe that now it is quite difficult to find good artisans who charge
reasonable rates. Artisans do not want their next generation to adopt this skill because of low
returns on it. Now, artisans in this work are mostly very poor females who have succumbed to
cultural restrictions on women’s mobility and operate from home.
Following are the reasons of declining trend of hand embroidery:
• Consumer demand has shifted to machine embroidery as it is economical
• Emergence of branded pret wear has made the customers seek convenience
• Hand embroidery is expensive and tailoring costs compound it further
• Good artisans are not available for reasonable rates due to general low wages
• Factory owners, wholesalers and producers find machine embroidery to be a better return on investment. The benefit of managing less human resource with more output is the basic reason of using machines for embroidery. Quick turnaround time, guaranteed precision and finesse in end product are other benefits of opting for machine work.
Chunri
Chunri or tie and dye is a labor and time intensive craft. It is a famous technique of Saraiki
speaking region as well as Sindh. However, chunri made in Bahawalpur, Abbas Nager is
considered to be of superior quality than that of Sindhi origin or the one made in other Saraiki
speaking areas like Multan.
Chunri is mainly used on occasions like marriage, ‘Eid, basant, etc. This why it has started coming
with other embellishments too.
Chunri makers use cloth from Faisalabad mainly. China Silk is procured from Pindi and Crinkle
Chiffon from Gujranwala. Pure Chiffon comes from China.
According to wholesalers, 2005 to 2010 chunri business was very slow as it went out of fashion.
Only village dwellers would buy it but then media and fashion weeks resurrected it and a new
lease of life was granted to it. Chunri is in fashion these days and many lawn brands like Gul
Ahmed etc. have even introduced chunri prints in their summer collection.
Chunri has come a long way from being a simple rustic art to a modern one. A range of new
colors other than traditional red, green and maroon has been introduced. This color
experimentation is more successful in Bahawalpur while in Sindh mostly traditional chunri colors
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are used. New fabrics are being used in Bahawalpur too. A fancy touch is given to normal chunri
with gota, tilla, beadwork etc.
Suits within the range of 1000-1200 are sold most as they are economical. Linen, chiffon-georgette
and Pakistani silks are bought by lower middle and middle class while upper middle class only
demands pure chiffon. Depending on fabric, types of dyes and other embellishments, a chunri
suit on pure fabric can go up to Rs. 15,000.
Block Printing and Gota Work
Gota work is mainly done on clothes and used on weddings or ‘Eids mostly. Block printing can
be done on clothes as well as on beddings, cushions and curtains.
Gota work is in high demand for the past 3-4 years. It has made a comeback in the fashion. It has
been exported to India in big quantities. Mostly inexpensive work is being exported to India since
Indian gota work is quite fine and expensive, Pakistani gota has been used to meet the needs of
the lower middle class.
Block printing is almost extinct from the mass markets. There used to be specialized markets and
units in the markets a few decades ago but this is not the case anymore. One has to search very
hard to find a block printing shop in the markets of Major cities. This work is being taught in
fashion schools now and seems to be restricted to either individual orders or expensive designer
wear. There were only 2-3 shops of block printing in Bahawalpur itself. People still running the
block printing shops lamented the fact that now there are no artisans who can make blocks. They
have to get them done from the furniture shops which in turn affects the quality of the printing
done with it.
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Fusion
Combination of hand embroidery, machine embroidery or adda work is called fusion. The
possibilities of fusion are almost endless. Modern designs are all about how fusion is used to
create exquisite beauty.
Figure 1
Machine Embroidery
70%
Adda Work20%
Hand Embroidery
10%
Estimated Size of Market Segments - Overall
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Figure 2
Figure 3
Adda Work80%
Hand Embroidery
10%
Machine Embroidery
10%
Estimated Size of Market Segments - Gujranwala
Hand Embroidery
70%
Adda Work20%
Machine Work10%
Estimated Size of Market Segments -Bahawalpur & Multan
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Overview of the Market Numbers
Lawn3
• Total textile Exports= $23bn
• Readymade clothes $1.7bn
• Lawn exports= $500m
• Domestic Consumption of Lawn= $1bn
Adda work
• Bahawalpur, Bahawalnagar, Gujranwala = $ 30 million
• Karachi, Lahore, Islamabad, Multan = $ 450 million
• Total = $ 480 million
Hand Embroidery
• Bahawalpur, Bahawalnagar, Gujranwala = $ 10 million
• Karachi, Lahore, Islamabad, Multan = $ 350 million
• Total = $ 360 million
4. Hand Embellishments and Exports
Textile Industry of Pakistan
Embellished fabrics are a part of textile sector which is the largest sector of Pakistan’s exports and
the single largest employer. Any discussion about embellished fabrics will have to be seen within
the larger context of textile sector.
3 Hindustan Times, 22nd July, 2016
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There are two main segments of the textile industry of Pakistan, woven fabric and knitwear.
Figure 4
Figure 5
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Textile Industry Export Landscape
According to Pakistan Bureau of Statistics (PBS), export earnings of readymade garments grew
by 4.2% in value and 1.6% in quantity during July-March fiscal year 2016 compared to same
period last year. The grant of GSP-Plus status by EU has a positive impact on readymade
garments both in value and quantity.
The Generalized System of Preferences, or GSP, is a preferential tariff system which provides for
a formal system of exemption from the more general rules of the World Trade Organization
(WTO).
This status was awarded in 2014 by EU and it will expire in 2018. It allows Pakistani exports to
enter the EU market at zero tariff and 70 per cent at preferential rates.
PBS released in June 2017, there was a fall in textile and clothing exports from Pakistan in the first
11 months of financial year 2016-17. A 1.98% decline was recorded in textile and clothing exports
to reach $11.234b. This export has already dipped an 8% in the previous fiscal year.
PBS data revealed a growth in exports of value-added products in terms of both quantity and
value during the first eleven months of the FY 2016-17. Exports in May declined 12.24% in
comparison to April. Exports for knitwear fell 1.85%, towels decreased 4.77% and bed-wear 3.22%
during the July-May period of FY 2016-17. Ready-made garments increased 4.15% during the
same time.
General Export Focus of Government of Pakistan
According to Strategic Trade Policy Framework 2015-18, following initiatives are being taken for
trade development:
• “The Focus Markets for short-term export enhancement will be (1) Iran, (2) Afghanistan, (3) China, and (4) European Union. These markets have been selected on the basis of potential for enhancement of Pakistan's market share in the short term.”
• “In order to diversify our export markets, an outreach strategy for Africa, Commonwealth of Independent States (CIS) and Latin America is being adopted. As part of the market
P a g e | 31
penetration/outreach strategy, these new markets will be explored through the following initiatives:
o Market Research o Opening of new Trade Missions o Exhibitions and Delegations o Linkages through Export Import Bank [EXIM Bank]”
Iran and Afghanistan do not seem to be sharing very warm relationship with Pakistan currently
but other countries mentioned in the policy need to be considered for promoting embellished
fabrics made in Pakistan.
Heads of different women chambers also confirmed this focus of the Government and stated that
their members have been visiting these countries for exhibitions.
Training programs can be developed to cater to these countries according to their specific needs
in fabric, color palette and designs.
Handicrafts and Exports
According to Strategic Trade Policy Framework 2015-18, export of handicrafts has shown
significant improvements in 2014-2015. However, no numbers have been quoted. Neither does it
contain any information about any handicrafts export policy.
Every Government in Pakistan claims to promote and patronize handicrafts in Pakistan.
However, on ground level, very little is visible. Most projects that promote and preserve
handicrafts are sponsored by international organizations or donors.
The Trade Development Authority of Pakistan (TDAP) has got a handicrafts division which is
largely underperforming. TDAP was established on November 8, 2006, under a Presidential
Ordinance, shall have Ministry of Commerce as its administrative ministry. TDAP is the
successor organization to the Export Promotion Bureau (EPB) and is mandated to have a holistic
view of global trade development rather than only the ‘export promotion’ perspective of its
predecessor. Designated as the premier trade organization of the country, TDAP shall be a
dedicated, effective, and an empowered organization, which shall be professionally managed.
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What activities does TDAP regularly undertake?
• Participates in 60 to 80 international trade exhibitions annually.
• Sends 20 to 40 trade delegations abroad every year.
• Organizes the EXPO PAKISTAN annually in Pakistan, which is well-attended by foreign
buyers.
• Runs the Expo Centre, Karachi providing a permanent exhibition space for holding
trade events.
• Implements various Trade Policy Initiatives announced by the Commerce Ministry.
• Undertakes various sector-development projects from the Export Development Fund.4
This handicrafts’ division is part of the Facilitation Division of the TDAP and it claims to create
a strong synergy between the artisan community and TDAP. It holds some local exhibitions and
fairs like Blue Fair in Multan but overall patronage of handicrafts is minimal.
There is no special quota for handicrafts in international exhibitions and trade fairs TDAP
participates in. However, women entrepreneurs are given stalls internally and locally at 50%
subsidized rates which means the government pays half of the stall fees.
Embroidered clothes do not have a separate HS code as it is considered to be too small a category
to be handled under a separate code.
Hand embellishment is a part of textile industry which accounts for almost 60% of Pakistan’s
exports. However, it has been in doldrums for the past few years due to energy crisis in Pakistan
and exports of textiles have shown a steady fall. When the Government is not meeting the
demands of textile sector, it is highly unlikely that a small part of it receives a lot of attention or
funds.
4 www.tdap.gov.pk
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Punjab Government’s Initiatives
Following initiatives by the Government of Punjab are likely to affect hand embellishment sector
or districts:
Punjab government is building Quid e Azam apparel Park on M2 Motorway near Shiekhupura
in order to facilitate the textile, garment & apparel sector all over Pakistan. Stitched garments
seem to be the priority of the Government. Provision of embroidery machines seems to be highly
likely in this park. Following description of the park are available on Punjab Industrial Estates
Development & Management Company’s website:
• “Presently, there is neither any organized or planned Garment/Apparel Zone neither in Punjab nor in the entire Country. Therefore, there is an utmost need for establishment of state-of-the-art Apparel/Garment Zone to encourage and promote garment related industrial activity. It can also become a source of foreign investment by projecting to international industrial community; in particular, South Asia, China and Central Asian States. As a matter of fact, establishment of Garment Zone will bring prosperity to the entire region at local and national levels.
• Since, the focus of Apparel/Garment Zone will be largely on industries like textiles and garments but allied and other general industries related to textile and garment will also be given the same importance as these industries will serve a major role in supporting and supplying to the main industries. There will also be opportunities for industries producing value additions products, therefore planning and development be carried out in light of their (all types of textile, garment and related industries) combined technical and financial parameters.
• The Apparel Zone will be developed on minimum 1536 acres which can meet the requirements to provide maximum possible facilities including infrastructure, amenities, CETP and grid station etc. to the potential industrialists.”
According to the major dailies of Pakistan on June 15, 2017, Punjab Chief Minister, Shahbaz Sharif
has allocated a huge amount of Rs 213 billion which would herald a new era of development and
prosperity in Southern Punjab
He was quoted as saying that poverty alleviation from southern Punjab was the top priority of
the government. Details of the funds are as follows:
• Rs 25 billion had been allocated to the mega program for provision of clean drinking water, which would be started simultaneously in all the tehsils of southern Punjab and completed in the beginning of next year.
• Khawaja Fareed University of Engineering and Technology had been established in Rahim Yar Khan and funds earmarked for Muzaffargarh-DG Khan and Alipur-Punjnad dual carriageways. The work on Lodhran-Khanewal Road had also been started.
• Rs 45 billion had been allocated for different development works in Bahawalpur Division, while the safe city project would also be launched in Multan and Bahawalpur.
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• Zever-e-Taleem Program had been introduced to mitigate the problems being faced by girls belonging to less-developed areas. The Khadim-e-Punjab Ujala Program would commence from the schools situated in southern Punjab to provide solar power to thousands of educational institutions.
• Six mobile health units had already been playing important role in providing best healthcare facilities to remote areas of southern Punjab, while another 16 would soon be added to the fleet.
• The Punjab government is in process of acquiring 100 mobile health units for far-flung areas of southern Punjab.
• Quality educational institutions like Daanish Schools had been established in the region where talented but deserving children of low-income families were being provided with free education and residence. On the other hand, a state-of-the-art hospital had been established in Bahawalpur.
• Shahbaz was quoted as stating that billions of rupees were being utilized for construction and rehabilitation of rural roads under Khadim-e-Punjab Rural Roads Program which had helped improving rural economy through improved access for the people.
Moreover, in technical education institutes like Technical Education and Vocational Training
Authority (TEVTA) no emphasis has been placed on hand embellishments. Courses like domestic
tailoring, machine embroidery, industrial stitching etc. are offered. Even PSDF’s (Punjab Skill
Development Fund) regular courses offered in textile are domestic tailoring, fashion designing
etc., PSDF, however, is offering textile embellishment course in it Skills for Market Scheme.
According to Pakistan Textile Journal, Pakistan Readymade Garments Manufacturers &
Exporters Association (PRGMEA) and China Chamber of Commerce for Import and Export of
Textile and Apparel (CCCT) have signed a Memorandum of Understanding (MoU) to promote
and expand cooperation between Pakistan and Chinese textile and apparel companies.
Hand Embellishment and Sourcing Companies
Pakistan has got over 100 liaison centers for international firms as well as export firms that work
for international retail stores like wall Mart, El Corte, American Eagle, Primark, Metallica and
brands like Reebok, Next, Puma, Zara etc.
Majority of these sourcing partners are sending finished products abroad. These firms work on
product development, quality assurance, merchandising and sourcing. In apparel category,
knitwear is exported more than woven fabric with the ratio of 70:30. These firms export finished
products which means ready to wear clothes.
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In ready to wear category, sometimes, hand embroidery is demanded as well. This demand is
mainly for women and kids wear. However, all the representatives of these firms were quite
reluctant to process orders of hand embroidery due to following reasons:
• Their orders are huge in terms of numbers. Sometimes, they run into thousands or millions even. Though hand embellishment orders are usually in thousands but they doubt that a firm/organization in Pakistan can meet such huge orders.
• Even where the numbers are as low as 5000-10,000 pieces, they still believe that it will be difficult to handle for the unorganized sector. There are three main fears:
o They will not be able to maintain quality. o They will be unable to achieve quantity. o Timely delivery will not be possible.
Quality
Exports to European and US firms means a lot of stringent requirements need to be met,
particularly for Europe. Fabric and materials needs to be tested and certified. In case of home
based workers, surety cannot be provided that they have used the same materials and fabrics
provided by the exporters.
Quality assurance measures of NGOs seem weak which is why exporters are doubtful whether
they will be able to get the standardized products in terms of color schemes, number of beads per
T-shirt and even design. A certain theme is followed in international designs which is built on
colors, shades and tones and needs to be uniform.
Quantity
If the setup has got enough skilled workers who can manage huge quantities is also a question
mark. Lead time for a quantity as low as 5000 pieces is at least one month and sometimes, these
sourcing companies are working on quite tight timelines.
Timely Delivery
The very process of distributing work in different villages and collecting it back seems to be a
lengthy process which may hinder timely delivery. Factories these sourcing companies work with
mostly provide them the comfort of one window operations.
There are no backups to fight power cuts in the villages which means only sunlight hours can be
utilized which again is a big question mark when it comes to the delivery.
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Other Issues
Child labor is quite a big issue internationally which is why export companies are very careful
not to use home based laborers where children may be used. They prefer to work with BSCI (The
business social compliance initiative) certified firms.
Majority of export based firms stated that if they are given enough proof by some organization
that they can deliver on quality, quantity and lead time, they will be willing to work with them.
There are constant pressures from the customers to lower the price of the products. In case of
machine work, it is easier to manage while handwork becomes expensive. If a T shirt costs 30
rupees on machine, it goes up to 150 in case of hand embellishment. Though this problem is rare
as international brands understand the cost of hand work. However, sometimes, it becomes a
headache to meet the price pressures.
The Biggest Stumbling Block
Export liaison office representatives stated that they had talked to some NGOs that run some
centers in the areas of Bahawalpur and Multan. However, they have been unable to assure them
that their value chain is strong enough to deliver the orders in a timely manner. The very set up
of an NGO seems to be unable to deliver mainly because their stakes are not involved in this
business unlike a factory owner who has invested his own money into his factory. Hence, level
of responsibility is going to be very low. And hence less professionalism is expected of them. “If
we get stuck somewhere, escalating the matter to the factory owner gets it resolved. Who would
be answerable in case of an NGO?”
This is why they sourcing companies usually decline the requests where hand embellishment is
involved as they do not want to cut a sorry figure in front of the client and hurt the bulk of their
business which comprises of machine embroidery or simply stitched clothes. These declined
orders are processed in Cambodia, China, Vietnam, Portuguese and India.
Following International Export Quality Parameters need to be adhered to
• Tested and certified fabric, threads and other materials have to be used.
• Since loose sequins or beads are dangerous for kids, pull tests from SGS or whichever testing company the client approves are necessary.
• Color bleeding tests are performed on the fabric and materials used.
• Croaking color transfer tests are done where they rub it on acrylic or woven fabric and a range is defined up to which color transfer is acceptable.
• Chemical testing of accessories is conducted so that dying may not be harmful for the skin.
• Accuracy of design is extremely important for exports. If they asked for 5 beads at a certain point, it has to be five, 4 will not be acceptable. Even placement of different patterns needs to be accurate because a small change may alter the design which is against standardization.
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Trends
1-2 years ago, hand embellishment was minimum but now trend has started changing and hand
embellishments seem to be in vogue on international fashion map.
Hand embellishment orders are only 1-2 % of their overall export orders. One of the exporters
stated that in 6 years, they had done only two orders-one 6000 pieces and the other 4000.
Beads, ribbon work, pom-poms, diamantes and sequins are ordered more frequently. Hand
embroidery and fabric flowers orders are rare. Hand embroidery is usually done in combination
with machine embroidery and other kind of work like ribbon and bead work.
This hand embellishment is usually done on women and kids clothing like jeans and frocks.
Hand Embellishments and Small Exporters
Other than sourcing companies, there are innumerable small to medium individual exporters
who are directly working with the foreign customers. Some get the orders through paid websites,
others have connections from previous workplace or through someone they knew.
Even smallest of exporter has defined a minimum number of pieces which is 200, they do not take
any order less than that. Their average orders range between 10,000-30,000 pieces per 90 days.
These exporters also work within the country because their sales volumes of exports are not very
big.
According to them, hand embellishment is minimum double the price of machine embroidery.
This squeezes profits margins which are 100% in case of machine work.
If there are 50 orders in a year, only one would be of hand embellishment and that too mostly on
baby garments. Stone work, ribbon, sequins, thread work and screen printing is required by the
clients. Thread work may be 3-5% of their overall orders. Demand for handwork comes from
within Pakistan. If it comes from international clients, then mostly through those who deal with
diaspora and people who manage home based exhibitions.
This work is mostly done by adda walas in the bazar or women at home in Orangi, New Karachi,
Korangi, Paposh areas in Karachi. These women mostly meet deadlines as well.
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It has become difficult to find laborers on cheap rates now. Exporters try to give them work on 5-
10 rupees per piece (where small embellishment is being done like beads on the bottoms of the
kids jeans). Since there is shortage of laborers, exporters have to go by the laborers’ demand now.
In knitwear category, 80% stitching units in Karachi serve exports, only 20% serve locally. There
are estimated to be 1,000-2,000 stitching units in Karachi with the capacity to produce 1,000 to
14,000 pieces per day according to the size of the unit. A mid-sized factory sends a container
every week which is 40,000 pieces. So 2,000,000 to 2,500,000 pieces per month are being produced
in knitwear in Karachi alone.
Around 200 factories are dedicated to woven fabric in Karachi while 800 for knitwear and most
of these are catering to the USA.
Due to energy crisis in Pakistan, around 20-25% of the textile industry has been shifted to
Bangladesh. Wages in Bangladesh are much cheaper than Pakistan. If wages are around 100
rupees in Pakistan, they would cost only 10 rupees in Bangladesh. Moreover, taxes levied on
textile are also considerably less than Pakistan.
Cost of business in exports can be calculated through one example: If a product costs $13, taxes,
freight charges and transportation charges are $3. If you are exporting 5,000 pieces then $10,000
are the charges of export.
Some of the challenges of exporters are taxes, freight charges, duties, and light, water and gas
shortages. Since they sometimes cannot meet deadlines due to energy load shedding, they have
to send the goods by air which costs a lot and they incur losses. If everything goes well, they can
send the delivery by sea which is quite economical.
Innovative orders they received from abroad was screen print and digital print on one piece. Then
hand embellishment with three types of different fabric on one shirt: cotton, polyester and leather.
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5. Market Segmentation
Market Segmentation based on Product Quality
Broadly speaking, hand work market can be divided into three main segments:
• Mass Market
• Middle Tier
• Upscale
Mass Market Products
These products are made on a cheap fabric with rough strokes and run of the mill designs. Price
sensitive segments of society like Lower middle class urban population and village and town
dwellers buy these products. KPK is the biggest purchaser of such items where people still have
a taste for embroidery and other hand work. Wholesalers in Lahore and Pindi state that their
main customers are Pathans.
Middle Tier Products
These products are made with better fabric and material. Better designing and neat stiches make
them acceptable for middle class individuals who detest mass market products and seek
individuality. Such products can be fished out of the stocks of mass market wholesalers or
boutiques. Mass market wholesalers and retailers usually keep a mix of stocks so that they can
serve all customers walking into their shops.
Upscale
Designer products fall into this category. These designers can be home based as well as haute
couture ones. The quality and designing fetches them high retail prices. Upper middle class
customers who seek exclusivity are the buyers of these products.
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Segment Wise Buyer Requirements
Table 3
6. Value Chain Analysis
Value Chain-Flow of Activities – Embroidery, Gota, Mukesh
Figure 6
Inputs were not covered in detail during the course of this research
Value Chain-Flow of Activities – Adda Work
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Figure 7
Since adda work is mainly done in workshops, it does not have the circulation step which is quite
critical in case of embroidery, gota and mukesh work.
Design
Design means the basic print on which embroidery or adda work is done. This print is made on
butter paper and later transferred to the fabric using a perforated paper stencil. Design also refers
to deciding which material is to be filled in it, which will go into making an outline, which stich
and color scheme will be used.
This activity is of critical importance. The quality of design along with fabric and material
determines the worth a product can fetch in the market. The reason mass market products are
cheap and designer products are expensive is innovative designs. Mass market wholesaler’s talk
about designs and innovation but their creative capabilities are quite limited.
Mass market wholesalers rely on their own creative skills or hire local craftsmen who have not
been formally trained. An expert locally trained designer who has learnt from an ‘Ustad’
(trainer/teacher) and works for mass market wholesalers and retailers charges 6000-7000 for a
bridal lehenga and 3000-4000 for a bridal shirt. A party wear shirt ranges from 1500-2000. Length
of the shirt also matters, the longer the shirt, the more the wages. Wholesalers tell them what they
want for example a shirt with gown fully covered or sparsely covered. Whether the work is going
to be light, heavy or medium. Basic patterns are inspired by work on historical buildings,
especially in Lahore. Persian designs are in used in adda work a lot. Wholesalers and local
designers’ idea of novelty and innovation revolves around rudimentary changes in color
schemes, a slight change in motif, for example leaves instead of flowers, etc. This is why most
products look exactly the same over the years. These craftsmen go to the wholesalers and show
them their newly drawn designs and then sell them.
A few wholesalers, however, are able to maintain better quality designs coupled with pure
materials which is why their products sell at a price many notches higher than usual mass market
ones. Almost all wholesalers set product design and definition themselves and convey it to the
artisans or middlepersons. The mode of explaining the design and color scheme is verbal.
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Home based designers or entrepreneurs take inspiration from the internet quite profusely. Their
designs are not common which is why their customers are ready to pay high prices quite easily.
Brands and fashion houses employ qualified professional designers who create designs for
which customers are willing to pay price premium. Both brands and home based designers create
proper samples which are given to the artisans to follow. This ensures better quality of work
produced by the artisans.
International Retailers and Buyers usually send the designs to be copied in the finished
products. These designs are made by professional designers and add a lot of value to the end
products.
Figure 8
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Circulation
Circulation of the patterned fabric to the artisans in villages who can embroider it. This circulation
is done by micro entrepreneurs and middlepersons. This activity is so important that whoever
carries it out makes good money in it.
Since wholesalers, retailers and brands have to perform other activities like marketing and selling
too, they are unable to allocate time to such a time-intensive activity. They outsource it to
middlepersons who distribute the work among artisans according to their skill sets.
Production
Once artisans receive the fabric and materials, they work to produce the finished products.
Middlepersons keep on checking the progress of the work and try to pressurize the artisans for
timely delivery.
Since artisans do this work in their free time, there can be many obstacles to complete the work
in the specified amount of time. Kids’ illness, guests and other mundane events can hamper the
speed of work by the artisans.
Production of adda work is done in workshops where individual owners or supervisors ensure
quality of work. These workshops can be within the city or outside the city. For example, mass
market work in Lahore is produced in workshops in Shiekhupura, Okara, Kamunki, etc which
are smaller cities or towns. Wages in smaller cities are one to two times lower than big cities like
Lahore which is why work is outsourced there.
Delivery
Middlepersons have to collect the embroidered fabrics from artisans spread in different villages
and take them back to the wholesaler and retailers. They pay the artisans according to whatever
they deem fit. If the work is unfinished or not satisfactory, they are not liable to pay.
Collection and transportation expenses are borne by the middlepersons and micro entrepreneurs.
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Wherever artisans themselves get the work from wholesalers, they bring it back themselves. They
also bear the expenses of traveling.
In adda work, wherever the work is outsourced, it is brought back either by the workshop owner
or simply couriered to the destination.
Selling
Checking the fabric for any aberrations from the design, mending the damages and dying are
done by all wholesalers and retailers who get the embroidery done.
Wholesalers sell their products with minimum value addition and get lowest margins. They play
with volumes that ensures profit.
Since retailers have to sell to the end customer, they add value in different ways in order to make
the product more attractive. Ironing and packing are the most basic sub activities performed by
every retailer. Others add some more embellishments like laces, beads etc., yet others add an
inner and bottom, hem the dupattas and get the fabric stitched. Each value addition increases the
price of the fabric.
Since most adda work is customized, the wholesaler or retailer has to give it to the tailor to stitch.
They also add small adornments like tassels, beads, stones etc. They also get the matching
clutches done in case of a bridal wear and then finally deliver to the customer.
Brands and designers wield the power of branding in addition to superior designs, packaging
and advertisement budgets. This is why they are able to sell at price premium.
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Distribution of Gain
Figure 9
Design, branding and marketing are the competencies that command high return on investments
and promise highest place of governance in the value chain.
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Value chain – Embroidery, Gota Work, Mukesh
Figure 10
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Value Chain – Adda Work
Figure 11
Value Chain Actors – Roles and Responsibilities
Artisans:
Artisans produce handwork according to the demand of the manufacturers who cut the cloth,
transfer the designs for embroidery onto the cloth, and prepare the materials before the work is
sent out to home based artisans. The artisans embroider the articles by hand, following the verbal
instructions given to them in most cases. The work is then brought back to the manufacturers
where it is recorded, dyed, washed and ironed. Manufacturers also finish the fabric for selling.
If it is thread work only, the price of the thread is included in the wages and artisans or
middlepersons buy themselves. However, quality conscious wholesalers try to provide all
materials themselves. Artisans have to complete the assignment closer to the timeline given to
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them which is mostly 1-2 months. However, this varies according to the amount and complexity
of work. Some pieces can be done within 1-3 days as well.
Being at the end of the value chain, artisans get minimum wages. The ones who directly go to the
wholesalers to get work, earn marginally better than those who work completely from home and
never go out. Most manufacturers know the wages rates in the market and so do the artisans.
Artisans usually do not accept rates lower than the market but even market rates are sinfully low.
Home based artisans accept rates lower than market rates too because the work is being given to
them at their doorstep. Rates differ with the type of work. Neatness, intricacy, delicacy and
amount of work to be done on a piece makes the rates differ.
Retailers, wholesalers and manufacturers all strongly believe that the artisan get least amount of
money in the value chain. Their per-day earning does not even come up to more than 25 rupees.
This is specially the case with the artisans who work on Pakistani stuff with thread only. Adda
work and work on pure stuff still give better rates because they require higher level of skill.
Adda work is produced in the workshops as it requires more controlled environment. The
supervisor or the workshop owner makes sure that the fabric is completed within stipulated time
frame.
Daily wages and per piece rates are the two methods through which artisans are paid. Hand
embroidery is usually paid per piece while adda work is done on daily wages. Adda work
artisans get paid better than home based artisans who produce embroidered work. This is because
adda work is done in a controlled environment where quality and speed of work can be
monitored.
Wage rates differ according to geography as well. In smaller cities wage rates are much lower.
For the same kind of work an adda work artisan based in Bahawalpur may get 500 while in
Lahore 1000. Moreover, definition of a day is different. In Bahawalpur or Bahawalnagar 12 hours
is taken as one day while in Lahore, Karachi and Islamabad 8 hours. Labor rates for different
types of work across quality bands will be given in detail in price margins section of this
document.
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Middleperson/Order Processors
There are three types of middlepersons:
1- Order processors:
This type of middlepersons try to avoid the risk of manufacturing something that may not sell.
They first get an order from their customers (retailers/wholesalers/exporters) and then start
production. The fabric is usually provided by their customers. This fabric is used as a
guarantee/advance payment since it is expensive. In hand embroidery, no time is committed
with the order giver since artisans work only in their free time. One 2-piece takes about 1-1.5
months but it can very well be more than that.
2 - Pure Middleperson:
These are the ones who are connected to big wholesalers and factories and the order processors
and get the orders from them directly. They do not work themselves but get the work done by
artisans. They know which artisan is good at which type of work and assign them work
accordingly. They also give reminders to them every now and then and check how much work
has been done. The language and the work dynamics in villages are a little difficult for
wholesalers to manage which is why they trust middlemen. Small wholesalers try not to use pure
middlepersons as their charges are more than artisans and that’s over and above the wages and
material cost. So they try to choose someone out of the artisans themselves and make them do the
managerial work. Big wholesalers cannot, however, take this risk as their quantity is difficult to
manage. They prefer pure middlepersons who can work professionally with them. These
middlepersons usually pay for any wastage or low quality of work. Since middleperson has to
disburse money to artisans, he may be giving less than what he received from wholesalers.
In adda work, workshop owners who do not run an outlet of their own, take orders from
wholesalers and retailers and get them completed through their laborers. They have to follow the
deadlines because the end customers have to wear the clothes on specific events like weddings
or engagements.
3- Artisan Middlepersons/ Micro Entrepreneurs:
Some artisans who have got managerial skills and are a little enterprising, get connected to the
wholesalers and manufacturers who give them orders in bulk. Since they cannot complete the
whole order themselves, they share this assignment with other villagers. Once the work is
completed, they bring all the work back to wholesalers. These artisans are usually exempted from
paying small damages or wastes though this is not always the case. Micro entrepreneurs are
almost always women. Some of these women not only have market linkages but also try to
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establish new ones by participating in local, regional and national exhibitions which gives them
access to individual end users as well as organizations and firms that are likely to buy their work.
Village Coordinators:
Big middlepersons keep village coordinators with them. Since they are working with multiple
wholesalers, they cannot manage micro-level details. They delegate these tasks to a person who
distributes work in the village, checks for quality and timeliness and collects it from the village
for the big middleperson.
Wholesalers:
In embroidery work, wholesalers manufacture their own stuff. Adda work wholesaler can also
outsource work to workshop owners. There are mainly two types of wholesalers:
1. Those who mainly manufacture their own stuff and sell it later as the orders come along
2. Those who manufacture and sell through sampling
• The first type keeps on experimenting with manufacturing. They manufacture whatever
is deemed fit on the basis of previous sales trends and sell later to retailers, exporters or
wholesalers. The benefit in this type of business is that if they get a big order, their stuff is
already ready to sell. These wholesalers use their own fabric and material. Many
wholesalers have a retail outlet too because they do not want to lose out on walk in
customers. Another reason of entertaining end users is that wholesale business volumes
are shrinking. In adda work, customization is so very rampant that no customer buys the
same kind of stuff that is displayed on the shop as a specimen. They want changes in
them. Wholesaling of adda work is also diminishing in big cities.
• The second type of wholesalers are usually small ones who get an order through
sampling. This method is also used by medium or big wholesalers when their usual orders
are slow. In order to enhance their sales volume during that time, they meet the customers
and show them their samples and later sell them their preferred items.
• These hand embroidery wholesalers perform following functions:
• Assessing demand through previous sales • Designing • Getting it traced on paper and transferring it to the fabric through a tracer • Giving it to the middlepersons/artisans • Receiving work through a middleperson or artisans
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• Washing and Dying of fabric • Checking for any damages and mending damages through darn • Selling
• In case of adda work, following processes are overseen by wholesaler or his supervisor:
• Getting orders from end users as well as assessing demand through previous sales for specimen displayed on the shop
• Designing • Getting it traced on paper and transferring it to the fabric through a tracer • Giving it to the artisans in their own workshop or someone else’s workshop • Getting it back from them • Checking for any damages and mending damages • Giving it to the tailor and checking for any issues in size etc. at the time of receiving • Adorning the clothes with piping, beads, etc. • Getting a matching clutch prepared • Selling
Retailers:
Retailers sell to end users. Retailers can be located in immediate, local or regional marketplace.
There are three types of retailers:
• Mass market shopkeepers
• Small Boutiques (An upgraded version of a shop with better quality products and higher
prices)
• Brands/ haute couture designers
Exporters:
Exporters buy from wholesalers and sell into international markets. Wholesalers prefer to work
with agents of exporters, particularly the ones who send their products to India. There are no
proper methods to get payments from India which is why a local person is more trust worthy
than a client in India. Wholesalers who deal with European and US clients get orders directly and
payments are routed through usual means like bank accounts.
Online Business Persons:
These individuals deliver to the end users at their doorstep. They simply buy from the
wholesalers and put them up on their websites. Some online business owners also get their own
work done from the artisans but majority prefers to buy ready made since it gives them time to
concentrate on marketing.
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Briefcase Exporters:
Brief case exporters are individuals who sell small volumes of clothes in international market,
mainly the country they reside in or go quite often to. They cannot carry a lot of products and
usually sell them through home exhibitions or to personal contacts they have in friends and
family.
These are the individuals who buy embellished fabrics from retailers and wholesalers and sell in
their home towns abroad. They usually hold home exhibitions or simply share their work from
Pakistan on WhatsApp groups of family and friends. Since they buy in rupees and sell in Dollars
or Pounds, they usually make good money.
Home based Entrepreneurs:
There are many women who have a selected clientele for handwork. Usually these are their
relatives, friends and acquaintances. These customers have a taste for hand work and are
exclusivity seekers for which they can pay price premium. These home based entrepreneurs work
with the artisans directly. Their artisan are highly skilled which is why they are paid way better
than the ones who work for mass market wholesalers.
Adda work entrepreneurs prefer to have a small workshop at home where they work with only
a few handpicked artisans. They may also have some artisans chosen from the market who work
at their own place and work exclusively with entrepreneurs as they pay them higher rates than
the market rates.
Designers and Brands:
National outlets and Designers always work with exclusive artisans who do not work for anyone
else. They are extremely possessive and protective of their artisans. They pay them the highest
possible amounts as wages/salary since they can earn price premium from end users. Most
designers have their workshops in big cities. However, one or two have opened their workshops
in smaller cities like Bahawalpur because of lower costs and the fact that they want to eradicate
poverty through training and giving work to local artisans.
End Users:
End users mainly buy from retail stores. However, if they have to buy in good quantity, they
usually go to wholesale markets as well. Particularly on the occasion of a wedding, customers are
likely to visit wholesale markets. Customers’ choice of point of sale largely depends on which
strata of society they belong to and how much purchase power they have.
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End users of hand embroidery are usually 40+ women who have seen their mothers and
grandmothers wearing hand embroidery and worn it themselves when they were younger. They
still have the taste for it as each piece of embroidered clothes is unique. However, recent years
have witnessed a general rise of pret wear and machine embroidery. The usage of those women
who like to wear hand embroidery has also decreased over the years due to the following facts:
• Pret wear has introduced a hassle free method of buying clothes. Hand embroidered clothes need some effort to be put in.
• Brands give women economical and prestigious clothes to wear while handwork is expensive due to tailoring costs associated with it in addition to original high prices.
Adda work is equally popular among all age groups as wedding is an occasion where everyone
has to look their best. Same is the case with gota work which is worn on mehndi day of the
weddings.
Value Chain Governance Relationships5
Table 4
5 Adapted from Humprey, Schmitz, 2004 and Mc Cormick, Schmitz, (2001)
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Value Chain Governance Relationships – Embroidery, Gota Work, Mukesh
Figure 122
Value Chain Governance – Embroidery, Gota Work, Mukesh
Relationship 1
Usually small wholesalers and retailers directly get in touch with the artisans to save the cost of
middlemen. Big wholesalers and retailers only do this in conjunction with using a middleperson
too. They give work to the artisans who visit their shops in search of work and bring the work
back to them on the shop itself. This relationship is simply directed. The artisan usually have to
agree to the wages given by the wholesaler and they complete the order keeping in mind product
definition given by the wholesaler.
Artisans who are directly linked with wholesalers and retailers earn better than the ones who
work through a middleperson. This is because the middle person’s share in the wage rate is
stricken off.
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Wholesaler reserves the right to accept and reject the work based on desired quality. They also
try not to pay the whole amount of delivered work and keep some money as security. However,
this is always not possible because artisans are poor and keep asking for the money that is due.
Relationship 2
Circulation of the fabric among village artisans is quite a time taking activity for the wholesalers
and retailers. They outsource this activity to the middlepersons. Micro entrepreneurs are actually
middlepersons who work with wholesalers and retailers in directed network. When they go back
to their villages after taking orders from them, they distribute it among fellow artisans. Since they
themselves are artisans, they can keep a better eye on quality and speed. Their follow ups are also
up-close and more continuous in nature.
Relationship 3
Middlepersons who get orders from wholesalers and retailers find some local villagers called
village coordinators and give work to the artisans according to whichever work they are good at.
Sometimes one piece needs to be given to three different artisans according to the nature of work.
These village coordinators do that as well.
Some middlepersons also directly give the work to the artisans. The modus operandi employed
by the middlepersons depends on the volume of work. If they can handle it themselves, they
circulate themselves. When the volumes are big, village coordinators are taken help from. Village
coordinators are directed by middlepersons who are, in turn, directed by wholesalers and
retailers who share market relationships with a number of buyers. These buyers sell to end users
with whom they have market relationship.
Wholesalers pay wage rates to the middlepersons who pay the artisans according to what they
deem fit. This means that artisans do not get the amount that has been charged from the
wholesaler. Middlepersons are also empowered to accept and reject a piece on the basis of quality
or pay lower rates based on quality. Abusing this power is quite a norm in this sector.
Wholesalers exert control over middlepersons and some do not pay completely to the
middlepersons. Some amount is kept as a security money. This security money is paid with the
next round of delivery. This is not done where long term relationship has established trust in each
other but usually with a new person.
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Those retailers and wholesalers who buy ready embellished fabric are limited by the range of
products available at the manufacturing wholesalers. To counter this problem, they try to buy
from multiple wholesalers. However, not every wholesaler offers credit which is why their
choices are limited.
Relationship 4
Middlepersons can also have connections with other buyer groups in the market who can buy
directly from them and can give them orders to be processed. These relationships are mostly
market relationships.
Middleperson’s relationship with the brands and designers is directed since design and technical
specifications are shared by the customers in the shape of a sample.
Relationship 5
As in case of adda work, home based entrepreneurs share almost balanced relationship with the
artisans. Many train their artisans to get work of a certain quality done from them. Artisans
cannot sell their work themselves while entrepreneurs cannot embellish the fabrics. Both possess
capabilities that are hard to substitute. This makes them negotiate their issues and problems
mutually. This is not to say that a home based entrepreneur will always share this sort of warm
and balanced relationship with the artisans but most can manage it as their volume of work is not
huge. Consultation and coordination on product definition of home based entrepreneurs with
their customers makes it a balanced relationship.
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Value Chain Governance Relationships – Adda Work
Figure 133
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Value Chain Governance Relationships – Adda Work
Relationship 1
Most wholesalers and retailers who own their own workshops have directed relationship with
the artisans. Though artisans can hop from job to job in search of better employment opportunities
and hence can have market relations with wholesalers but most wholesalers try to retain their
good laborers. They supervise their work for quality and tell them what to make when to make
and how much quantity is to be produced. Technical assistance is provided to them in terms of
design and product specifications. Same is the case with workshop owners who get orders from
wholesalers and retailers. Their relation with the artisans as well as with the wholesalers and
retailers is directed. In artisan’s case, they direct and in wholesalers and retailers they are directed
by them. Most wholesalers and retailers try to maintain relations with their order processors as
over time they understand their needs and know how to deliver on them. Workshop owners take
decisions whether to work for some wholesaler exclusively or work for multiple clients
depending on the size of their workshop, number of labor and above all payment history of the
wholesaler or retailer. Wholesalers and retailers, on the other hand, look at the quality of work,
lead time required and delivery history of the workshop owners in order to choose who to work
with. Overall, this relationship is directed by wholesalers and retailers.
Wholesalers and retailers maintain market relationships with other wholesalers and retailers who
buy from them, exporters and brief case exporters and online business owners. Since adda work
is mostly customized, it is exported in small quantities. We have not been able to meet anyone
who exports adda work in bulk.
Relationship 2
All brands and designers have their own workshops where they produce their products. Their
supervisors are given orders of what, how, when and how much to produce. Artisans and
supervisors have little say in production decisions. They are only carrying out the orders. They
can, however, give their opinion about the materials to be used and how a design would be filled,
if consulted by the designers. Brands and designers manage vertical integration of all the stages
of the value chain.
Factory owners who work in fusion adda work, i.e. adda work, hand embroidery and machine
embroidery, also work like brands and designers with the supervisors and artisans. They have
their own supplying establishment or workshop either on the premises of the factory or at an
independent place. They, however, need to outsource some of their work to independent
workshop owners. Usually, these workshop owners have exclusive contracts with them and do
not work for other factory owners for a specified period of time. These workshop owners have
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directed relationship with the factory and they also maintain directed relationship with their
artisans.
Factory owners and brands/designers are different only in scope. Brands and designers operate
on national level and may sell internationally through their outlets abroad in multiple
geographical locations while factory owners’ operate their outlets in limited cities and export to
certain countries where their clients are located.
Relationship 3
Home based designers offer exclusivity of designer wear to their selected customer base. These
customers can get highly customized products after discussing it with the designer. Designers, in
turn, discuss it with their artisans, particularly the master artisan. Home based entrepreneurs
work in two ways: by setting up a workshop at home or finding a workshop owner who manages
work for them.
Their artisans are also handpicked and produce high quality work since they are paid well. They
enjoy better relationship with their artisans as it is difficult to come by highly skilled artisans.
Since the customer base is very limited and exclusive, these home based designers are able to
maintained balanced relationship with them. In the same way, choicest artisans also means they
can sustain a balance relationship with their workers too.
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7. Market Size and Value Estimation
Figure 144
Figure 155
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Table 5
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Table 6
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8. Non Clothing Items
Non Clothing Items with Hand Embellishments
Hand embellishment work on non-clothing items is so rare that there are no shops dealing solely
with it in the markets of the cities surveyed. Even markets of Bahawalpur and Multan that are
the hubs for hand work tell the same story. During the course of this research, many wholesalers
and retailers narrated that they had wound up their businesses since it had not remained
profitable any more.
As is the case with suiting, machine work has replaced handwork since machines can replicate it.
Now, retailers sitting even in handwork specific markets sell only 5-10 % handwork and rest of
the stock comprises of machine work.
End users mostly buy non clothing items for gifting purposes. Their everyday usage has
decreased substantially.
Now, handmade non clothing items are only made through special orders. These orders can be
given by individual customers, retailers or organizations that are working for preservation of
culture and crafts. They are also sold through national and international exhibitions.
More often than not machine work is sold as handwork since it is difficult for a common customer
to decipher the difference. In a suiting item, customer can turn the fabric and make sure whether
it is handwork or not. This cannot be done in case of a clutch or a hand bag. Moreover, since this
work was done by hand in the past, when customers go to handwork specific markets, they are
psychologically more tuned to believe that it is going to be handwork. Retailers exploit this
psyche and assure the customer that is it actually hand made.
For example, zari-tilla clutches (pic on slide 105) have machine work on them but all over
Pakistan, they are sold as handmade, particularly, at Lok Virsa, Islamabad where Pakistani
diaspora frequents. These are mainly produced in Hyderabad, Sindh.
Following non clothing items were available in small quantities at retail shops:
• Clutches
• Hand bags
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• Wall hangings
• Decoration pieces
• Cushions
• Gota jewelry
• Neckline and sleeve designs of gota work
• Laces of gota work
As is the case with mass market suiting, almost identical non clothing items are sold in all
territories and almost at the same price.
Clutches with adda work that are used by brides on their wedding days are given complimentary
with the wedding jora. This clutch has the same fabric and work that has been done on the jora
itself. The fabric is pasted on cardboard with the help of glue and shaped into a clutch. Artisan
who does the pasting gets 300-400 rupees per clutch.
Handmade bedsheets are still sold in good quantity as compared to rest of the non-clothing items
in Bahawalpur, Multan and Karachi. Some of the shops sell these along with regular machine
printed bedlinen. However, this is the only non-clothing items whose exclusive shops can still be
found in Bahawalpur and Karachi.
However, even these hand embellished bedding shops seem to be in a bit of trouble in
Bahawalpur even which is the epicenter of handmade work. The wholesalers we talked to were
seriously contemplating changing their business line from bedding to ladies’ fancy suiting. One
reason for this is their shrinking business over the past decade. Many wholesalers have started
relying more on retail and less on wholesaling because there is not enough demand. Moreover, a
bed cover can be used over a long period of time while a woman would not wear the same clothes
to a second wedding or party.
Hand Embellished Bedsheets
A wholesaler in Bahawalpur reminisces that in 1996, average sales per day were 400,000 rupees.
Now, china bedsheets are sold by the same people who used to sell handmade sheets of
Bahawalpur. His goods used to go to Lahore, Gujranwala, Pindi and Islamabad but now he sells
only locally.
Same narrative was repeated in Multan and Karachi too where retailers said that only 5% of their
goods are handmade and on an average two customers a month come wishing to buy handmade
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bed covers or cushions. Now, specialty shops where handmade is sold are shrinking quite
rapidly as most wholesalers have started stocking machine made printed bedsheets as well.
The main reason of this decline in business stated to be lack of innovation. Following examples
have been cited:
• Designs of these bedsheets have not changed for decades. Customers need something new to buy it multiple times.
• Printed machine made bed sheets and pillow covers are ready to use while handmade bedsheets are usually sold unstitched.
• Over the past years, bed sizes have been changed and presence of mattresses have increased the bed sizes while the sizes of handmade bed sheets are still charpoy sized. They do not hang from the bed.
One would think if the shopkeepers realize this why don’t they do a simple thing of increasing
the size for example? This is because they are scared of losing the remainder of their business.
Increasing the size of a block printed bed cover means it will go up to 800 rupees from 500. They
are scared that people would not buy at this price.
Composition of bedsheets in an average shop in Bahawalpur is as follows:
• Screen Printing: 60%
• Block printing: 10%
• Gultex: 10 %
• Ralli, antique, ajrak :20%
This composition can change with the type of shop but majorly screen printing from Hyderabad
is quite dominant even in Bahawalpur. Moreover, Ralli is mainly coming from Sindh side both in
Multan and Bahawalpur. Ralli from Cholistan was not found in shops of Multan and Bahawalpur.
When asked the reason, shopkeepers simply stated that Sindhi ralli is readily available while they
do not have the same availability for Cholistani ralli.
Bedsheets with screen print and machine tilla work are popular due to reasonable price band.
Shopkeepers in Multan and Bahawalpur stated that only educated people form Islamabad or
Karachi buy handmade bedsheets and that too as a gifting item. People have stopped using them
on daily basis, particularly in big cities.
When it comes to bed covers, durability is a sought after quality. Machine work meets this need
in a satisfactory manner. Hand embroidery needs hand washing and more care to last long.
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Putting it into a washing machine can ruin it. Some rallies/ applique work do not have any
guarantee of colors which means that it can only be used once.
Chinese handwork bedsheets and cushions were quite popular some 15 years ago. They were
used as a replacement of Pakistani hand embellished bedsheets. The reason they still sell more
than Pakistani handwork in cities like Gujranwala is that Pakistani handwork is more expensive
and mass market customers do not have the will or purchase power to buy them.
Unlike common belief that handwork can never be same if you give it to different artisans,
handwork in china has got a factory-like symmetry and standard. Moreover, importers state that
in china, handwork is extremely organized. If you have ordered something to be delivered in 15
days, it will be delivered right on the date. This is not the case in Pakistan.
Following types of work are being imported:
• Handmade ribbon work on bedsheets, cushions, table cloths
• Handmade embroidery bedsheets with filling stich
• Machine made patchwork which looks like kanta work from Thar
• Machine made patchwork that looks like applique work
Crochet bedsheets are also sold in negligible quantity. Usually people from villages and small
towns buy them.
A machine made patchwork bedcover imported from China which looks like handmade applique
work is sold around Rs.2000 while the same work done by hand was sold around Rs. 3,700.
Wholesalers and retailers stated that even though they could get handwork done by some of their
old contacts but they prefer not to stock it as it is difficult to sell it due to high price.
In Lahore, Karachi and Islamabad expensive bedsheets are also sold though their number is quite
low. Resham work, figure work and antique work bedsheets are sold as high as 100,000-150,000.
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9. Trends and Customer demands
Navigating a handwork business is quite tricky these days since customer demand is difficult to
gauge.
Manufacturers usually make 50 pieces of a new design at first. When these pieces are sold to other
wholesalers, number of repeat orders are counted. If a design is demanded by more than three
wholesalers (buyers), it means that the new design is a hit. If no repeat orders come in,
manufacturing of that design is halted.
Before the prevalence of internet, a homogenous fashion was followed by all and sundry and
manufacturers could easily understand which fashion or style is being followed like short shirts
and trousers era, long shirts and big dupattas era etc. However, polarization in fashion is the
name of the game now. Internet has made customization very easy. Manufacturers seem
concerned about not only the length of the shirts but also the style. Where to finish the
daman/front of the shirt is also an issue now as everyone is wearing different lengths.
Modern designs are all about fusion and intricacy. Laces, patches, dori work, multi-head machine
embroidery along with tilla and dabka work or bead work are being used in one design. Gone
are the days when 2-3 materials were enough to make one design. Work on neckline and front
was enough. Now, front is designed separately, back, sleeves, dupatta and trousers/bottoms
separately.
Both the manufacturers and end users check out big weddings and parties over the internet
because that is where the trends are derived from. Fashion shows, morning shows, fashion mags
and TV dramas are watched closely for new design ideas.
Many wholesalers who have put an effort on design side of the business say that the business of
hand embroidery has been picking up and it will grow in the next five years.
The fact that embroidery (both hand and machine) has made a comeback on international scene
in recent years was endorsed by the exporters interviewed as well as snippets of information
shared by international newspapers. Following are the two examples:
• Telegraph in its online addition of February 2016 features an article, from traditional to on trend, embroidery is making a comeback. The articles cites examples of hand embroidery to
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be employed by high end designers and brands like Gucci, Saint Lauren, and Dolce & Gabbana etc. It quotes James Merry saying ‘Hand embroidery has a freedom and personality to it that is lost with the machine. It’s almost like comparing your handwriting to the typed word.’ It concludes that the new generation is interested in embracing this new fashion fad.
• Financial Times in its online issue of June 2015 features an article named ‘Embroidery enjoys a fashion renaissance’. It shows models wearing hand embroidery by Pucci, Chanel, Valentino, Mary Katrantzou and Dries Van Noten. It quotes customers paying as high as £ 9000 for a hand embroidered outfit. Exorbitant price, shortage of skilled laborers and customers questioning the provenance of the outfits are issues that are faced by designers selling hand embroidered pieces. In spite of all this hand embroidery seems to be back in luxury end of the market.
Local designers, brands and exporters have already confirmed this during the interviews.
Representatives of Sourcing Houses stated that they had started receiving embroidery orders in
the past one or two years even though they have been associated with this business for a long
time. “Our designers and researchers in Europe have indicated that we should start working on
some hand embroidered products too as they are in fashion.”
Some brands have got limited handwork available. According to young customers (teenagers),
12000-15000 on Nishat for one shirt is too expensive to buy. Sometimes, price is a barrier and
sometimes quality of work, customer needs good work in reasonable price. This need is fulfilled
by pret wear more than handwork. 3000-5000 is the range acceptable for handwork as this is the
range available on brands. One can get a good two piece or kurta in this range. Handwork needs
to be closer to this range in order to sell.
Young generation is more focused on the style, design, fitting, color and cuts of whatever they
wear. They can't compromise on cuts and fitting. For them, attraction lies in a beautifully set piece
whether that is hand embroidered or machine.
Demands of Pakistani diaspora living abroad and that of Pakistanis are similar except that people
abroad are more careful about spending their money. In UK people want to pay maximum £ 250-
300 for a light party wear.
On local front, chiffon is quite in vogue in big cities like Lahore and Karachi. Kacha Pakka stich,
shadow work, Pakka tanka and marori combination is in since last year and ribbon work is
completely out. Shadow, Benazir and makri tanka on one shirt are popular among low and
medium end customers. Indian chicken Kari has been popular for the past few years.
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Gota work has picked up in last couple of years and the demand has started pouring in from
Karachi and Lahore. It is also exported to international markets. Many manufacturers in
Bahawalpur stated that they find it hard to meet even local demand. Mukesh work is also a hot
item when it comes to exports. Sikh community likes mukesh a lot and wherever they reside in
the world, demand of mukesh work is high. Mukesh is also liked throughout Pakistani Punjab.
Modern cuts, double gowns, trouser, shirts, layered shirts and western touch is preferable in both
adda work and embroidery.
In adda work, colors other than usual gold and silver are also being tried. Capris, tails, short shirts
and other cuts have been introduced lately. Cut work is quite in these days. French knot, 3 D
(loaded work) is very much in.
Innovation – A Dire Need
Every buyer agrees that innovation is needed in the field of embroidery. Whenever
manufacturers hit upon a good design or some fabric innovation, they receive high returns from
the market.
Innovation is particularly needed when it comes to selling in the international market. During the
course of the research, we came across some examples of innovation to suit the needs of customers
abroad:
• Hand embroidered prayer rugs in KSA and scarves in Malaysia.
• In Europe, work on creaseless fabric is demanded. Anything that is difficult to wear is not welcomed by international customers.
• On cushions, Velcro is preferred rather than zips because it is easier to wash in the washing machine.
• If work has to be exported to South Africa, neckline embroidery should go down to the belly button and it should be in bright colors with a lot of shimmer.
• Small items like glass coasters, napkins etc are liked more in European countries. A multipurpose piece of fabric with Eiffel tower embroidered on it which can be used as a wall decoration piece or table runner or a picnic mat.
• Trousers made of chiffon with undies sewn into them for European countries.
One of the designers from Karachi has opened their design house in Bahawalpur. They aim to up
the skills of the artisans, give them many times better rates and provide them with good
environment to work. They introduced many new techniques like:
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• Using kacha resham
• New stiches like phulkari tanka that is a specialty of Haripur
• Introducing thinner kora with AR
• Shifting shadow work, taarkashi, French knot on adda from frames
• Using truck art
• Filling with sitara on a resham base/foundation
• Using combination of fabrics
• String/boor and network techniques
• All material is pure like original pearls, resham etc.
• Their quality standards are totally different: cleanliness, completeness and intricacy is taken care of
• Intricacy can be understood by one example where 19 colors were used on one small piece of cloth.
15-20 years ago, neat and heavy handwork was preferred while these days, people are not much
concerned about quality. Now manufacturers want more pieces to be made so that they can sell
more. The artisans also do not want very heavy or intricate work because that takes more time
and it delays their earning. Their needs are immediate and waiting for money to come is difficult
for them.
They even sacrifice more money in comparison to immediate money. For example, if they are
getting 2000 for a ralli bedsheet, they would prefer a smaller assignment which pays them 800
but gets finished in less time. Retailers also prefer quick money because such pieces take time in
manufacturing and they do not have enough money to be blocked when these products are in the
production phase.
There is demand for innovative and neat work is in the market but this need is ignored in the lure
of quick bucks by majority of wholesalers. Neat work requires more time and more investment
which is why there are very few players in the market who have the financial muscles to do that.
This need is taken care of by home based entrepreneurs and designers.
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10. Price Margins
Mass market products’ margins are squeezed due to lack of design innovation and less value
addition.
Wages are decided inclusive of materials. For example if wages are 1000 for a shirt and dupatta,
thread of 70-80 rupees is included in it. For the sake of clarity, on the next slides, we have broken
down the wages and material separately.
The reason why material is included in labor is because if material is given to the laborers over
and above the wages, they tend to ask for more material than is necessary for completion of work.
This results in eroding retailer profits.
Surprisingly, there was not a lot of difference among wholesale prices of the mass market
products. At max 100 was being charged more in bigger cities. The difference comes when the
same clothes are stitched, an inner or a bottom is added and clothes are ready to wear.
Price Margins – Mass Market Embroidery
Blue 2 Piece (Shirt & Dupatta). Shadow work and Benazir tanka on Pakistani Rahat lawn. The
front is fully embroidered. Design is a little intricate with a bit of taarkaashi in the flowers.
• Fabric (Rahat Lawn) = PKR 500
• Thread (DMC) = PKR 70 – 80
• Labor = PKR 900
• Total Cost = PKR 1,500
• Wholesale Price = PKR 1,600
• Retail Price = PKR 1,650 – 1,800
• Price Margins = PKR 50 – 200
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Beige 3 Piece (Shirt, Dupatta & Bottom). Shadow work and Benazir tanka on Pakistani Supreme
lawn. The front has a neckline embroidery and bunches of flowers on the front.
• Fabric (Supreme Lawn) = PKR 600
• Thread (Staple) = PKR 30 – 40
• Labor = PKR 250
• Total Cost = PKR 900
• Wholesale Price = PKR 950
• Retail Price = PKR 1,000 – 1,200
• Price Margins = PKR 50 – 200
Price Margins – Up Class Embroidery
Shirt dupatta of pure chiffon with taarkashi and filling stich.
• Fabric = PKR 1,800
• Thread = PKR 1,000
• Labor = PKR 3,000
• Total Cost = PKR 5,800
• Retail Price = PKR 18,000
• Price Margins = PKR 12,200
Price Margins – Mass Market Mukesh/Kaamdani
Shocking pink 2 piece on Pakistani chiffon.
• Fabric (Pakistani Chiffon) = PKR 600
• Mukesh & Labor = PKR 500
• Total Cost = PKR 1,100
• Wholesale Price = PKR 1,150 – 1,200
• Retail Price = PKR 1,00 – 1,400
• Price Margins = PKR 100 – 200 White 2 piece on pure chiffon.
• Fabric (Pure Chiffon) = PKR 2,000
• Labor = PKR 1,000
• Total Cost = PKR 3,000
• Wholesale Price = PKR 3,100 – 3,200
• Retail Price = PKR 3,300 – 3,500
• Price Margins = PKR 100 – 200
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Navy blue 3 Piece on Pakistani lawn.
• Fabric (Supreme Lawn) = PKR 600
• Labor = PKR 500
• Total Cost = PKR 1,100
• Wholesale Price = PKR 1,150 – 1,250
• Retail Price = PKR 1,200 – 1,300
• Price Margins = PKR 100 – 200
Price Margins – Up Class Mukesh/Kaamdani
Shirt dupatta of pure chiffon and best quality 70 tola mukesh work on it.
• Fabric = PKR 1,500
• Mukesh & Labor = PKR 7,500
• Stitching = PKR 2,000
• Total Cost = PKR 11,000
• Retail Price = PKR 22,000
• Price Margins = PKR 10,000
Price Margins – Mass Market Gota Work
Red 3 piece Pakistani lawn with a neckline and small gota flowers thrown on dupatta.
• Fabric (Supreme Lawn) = PKR 600
• Material (Gota) = PKR 100 – 150
• Labor = PKR 200 – 250
• Total Cost = PKR 950
• Wholesale Price = PKR 1,000
• Retail Price = PKR 1,100 – 1,200
• Price Margins = PKR 100 - 200
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Yellow 2 Piece on Pakistani chiffon with gota work on neckline and back and small gota flowers on
dupatta.
• Fabric (Pakistani Chiffon) = PKR 600
• Material (Gota) = PKR 100 – 150
• Labor = PKR 500
• Total Cost = PKR 1,200
• Wholesale Price = PKR 1,250 – 1,300
• Retail Price = PKR 1,400 – 1,500
• Price Margins = PKR 100 – 200
Price Margins – Up Class Gota Work
Lehenga set for mehndi function on pure jamawaar shirt and lehenga and net dupatta. This type of
gota has to be molded into petal shape.
• Fabric = PKR 3,500
• Gota = PKR 6,000
• Labor = PKR 7,500
• Stitching = PKR 3,000
• Total Cost = PKR 20,000
• Retail Price = PKR 60,000
• Price Margins = PKR 40,000
Price Margins – Mass Market Applique Work
Lawn 3 piece with neckline and dupatta work. Small flowers on the dupatta only
• Fabric (Supreme Lawn) = PKR 600
• Labor = PKR 450
• Total Cost = PKR 1,150
• Wholesale Price = PKR 1,200
• Retail Price = PKR 1,250 – 1,300
• Price Margins = PKR 50 – 100
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Price Margins – Mass Market Adda Work
Bridal lehenga set on jamawaar with light work on it with tilla naqshi and dabka.
• Fabric = PKR 3,500
• Material = PKR 10,000
• 1 Laborer works for two weeks = 400*16 days = PKR 6,400
• Stitching = PKR 3,000
• Total Cost = PKR 22,900
• Retail Price = PKR 35,000
• Price Margins = PKR 12,100
Price Margins – Middle Tier Adda Work
Bridal Lehenga set on pure chiffon with naqshi, dabka, tilla and resham work. Set in antique heavy
style. (Loaded work). Usually a 400,000 piece is almost always a copy of a brand. A designer brand
will sell the same type of work in around 1,700,000 while cost may almost be the same. There will
be difference in finishing though.
• Fabric and lining = PKR 15,000
• Material = PKR 50,000
• Daily wages (8 hours) = PKR 800
• 12 laborers work for 15 days = 12*15 = PKR 180 daily wages
• Overheads added to Daily Wages = PKR 200*180
• Total Labor = 1,000*180 = PKR 180,000
• Stitching = PKR 7,000 – 8,000
• Total Cost = PKR 250,000
• Retail Price = PKR 400,000
• Price Margins = PKR 200,000
Price Margins – Non Clothing
Teeka, Jhoomer, Earing Set
• Material = PKR 150
• labor = PKR 150
• Retail Price = PKR 500
• Price margins = PKR 200
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Gota-adorned Bangle set
• Material = PKR 130
• Labor = PKR 130
• Retail price = PKR 400-500 but mostly PKR 400
• Price Margins = PKR 140 – 240
Big Embroidered Clutches:
• Whole Sale Price = PKR 500
• Retail price PKR = 600 – 700
• But mostly PKR = 600
• Price Margins = PKR 100 – 200
Big Zari, Tilla Clutches:
• Whole sale price = PKR 400
• Retail price = PKR 500-700
Price Margins – Imported Bedsheets from China
This is a mass market item. Cotton bedcover with filling stich flowers on all four corners of it and
one bunch in the middle.
• Bought from China = PKR 1,450
• Import Duty = PKR 300
• Total Cost = PKR 1,750
• Wholesale Price = PKR 1,850
• Retail Price = PKR 2,000 – 2,200
• Price Margins = PKR 150 – 350
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Price Margins – Mass Market Block Print Bedsheet
A tricolored traditional bedsheet.
• Fabric = PKR 200
• Material (Color) = PKR 100
• Per color wages = PKR 30
• 3 laborers apply 3 colors = 3*30 = PKR 90
• Overheads = PKR 10
• Total Cost = PKR 400
• Wholesale Price = PKR 500
• Retail Price = PKR 550 – 600
• Price Margins = PKR 50 – 100
11. Major Market
Major International Market for Handwork
Almost all market actors who are involved in exports of handwork whether they are mass market
wholesalers or sourcing companies agreed upon three major markets where the demand of
handwork is very high. The biggest market is UK followed by Italy and France. USA and Canada
are third biggest markets and KSA and UAE stand at number four.
Though India and Bangladesh are big markets for Pakistani lawn, hand embroidery and gota work
and a lot of trade has happened in the past, Pakistan’s diplomatic relations with both of these
countries have not been good for the past 3 years or so. There used to be a lot of exhibition
participation and trade just a few years ago but things are not very rosy these days and do not seem
to be revived in near future.
Indian market demands high volume but offers less profit margins. In Bangladesh volume is not
very high but margins are better than India. Mass market gota and mukesh made in Bahawalpur
have got very high demand in India. Though gota work is done in India too but it is quite expensive.
The reasons Indian work is expensive are: a) their fabric is always pure crinkle which is 600 per
yard while Pakistani chiffon is 100 per yard .b) their work is very neat and intricate. This is why
what costs in India Rs. 12000 can be prepared in Pakistan in 1500-2000 rupees. This inexpensive
work has got high demand in India where it caters to lower middle class.
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Pakistani Lawn suits are very popular in India which is why every exhibiter takes lawn
embroidered and non-embroidered fabrics to India. A 500 rupee kurti will sell in 1200-2000 Indian
rupees.
If Pakistan’s diplomatic relations improve with India and Bangladesh, they will again be big
markets for Pakistani gota and mukesh work catering to middle and lower middle class. Pakistani
lawn has already conquered the hearts of Indian customers. Any embroidery done on lawn sells
like hot cakes in India.
UK
This market holds biggest potential for hand work due to the presence of Pakistani and Indian
immigrants. Both mass market and up class products are being exported to the UK. Competition
with Indian products is quite fierce in the UK. However, most exporters we met were exporting to
the UK.
Italy & France
For the past couple of years or so hand embroidery has returned to haute couture fashion in major
European fashion hubs. This phenomenon has got a trickledown effect to mainstream fashion
brands and retailers as well.
Italy and France are known fashion hubs where send hand embroidery can be sent as a component
which can be used in overall dresses like a patch with a motif which can be used on pockets, blouses
or wherever they want it to be. Beachwear, kaftan with motifs, chunri kaftans and beachwear.
Sarong cover ups with matching bows on hats have got a big market there. Wall hangings,
multipurpose embroidered fabric and embroidered undergarments have been exported to Italy by
small exporters. Pakistan can take advantage of GSP Plus status in these countries as well till the
end of 2017.
The method to get an order is to send some samples first to show our artisan’s capabilities. We need
to sell our technique which can be customized later. Design needs to be provided by the client since
we do not understand their requirements a lot.
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Many big wholesalers from Multan and Bahawalpur stated that they had been doing regular
business with Italian clients some 5 years ago. However, middle persons and Pakistani
businessmen have been involved in fraudulent activities for short term gains and now Italian clients
do not trust Pakistani businessmen and hence frequency of orders has declined sharply.
USA & Canada
USA and Canada along with UK, Germany and Spain are among top 5 countries where Pakistani
knitwear is exported. According to Textile Journal of Pakistan, the main items of export in knitwear
from Pakistan are elegant men's T- shirts, fancy ladies T-shirts with exquisite embroidery and
sequined work, night shirts for ladies and men's pajamas sets and sportswear and jogging suit and
boxer sets. Sourcing companies and exporters have also confirmed that hand work is mainly done
on women’s t-shirts, sweaters and bottoms as well as kids’ garments. USA imports a wide range of
wall hangings and cushion covers and many other items duty free from Pakistan. This can be
leveraged for hand embellishment sector as well.
KSA & UAE
UAE is also one of the major knitwear importer from Pakistan. In KSA generally and in UAE
especially Pakistani hand embellished products have to compete with Indian products. However,
there is still a lot of room for exporting to these two countries due to large diaspora population
there. In addition to suiting, scarves, dupattas, Abayas, prayer rugs and matching cross bags have
been sent to these markets by Pakistani businessmen. Both embroidery and adda work have a
market there.
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Potential issues
The World Bank (WB) in a recent report "Stitches to Riches? Apparel Employment, Trade, and
Economic Development in South Asia" says that Pakistan offers low prices in most product
categories, but it lags behind competitors in reliability and political stability.
These issues are bound to arise in any country where potential for hand work is to be explored.
Credibility of Pakistani passport is another issue that delegations and exhibiters face abroad.
All the markets discussed above hold great potential for more handwork exports if the connections
are established with the right firms and organizations.
Major Consumption Markets for Source Markets
Gujranwala
• Local markets – Jhelum and Sialkot
• Regional Markets – Lahore, Pindi/Islamabad, Wah Cantt, Mardan, Hyderabad and Mirpur
• International markets – UK.
Bahawalnagar
• Local Markets – Multan and Faisalabad
• Regional Markets – Lahore, Karachi, Pindi/Islamabad and Hyderabad
• International Markets – UK.
Bahawalpur
• Local Markets – Multan, Rahim Yar Khan and Sadiqabad
• Regional Markets – Lahore, Karachi, Pindi/Islamabad and Abbottabad
• International markets – India, UK, Bangladesh UAE and KSA
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12. Pros and Cons of Different Businesses
Comparison of Businesses
Table 7
Adda Work
Pros
• People’s willingness to spend on weddings make margin go quite high.
• Per piece margins are so high that even a mass market retailer can sell it on 100% margin.
• For designers, this margin goes up to 200-300%.
• Working for 5 months of the year is enough for the whole year.
• No threat of being extinct in the near future as women in Pakistan and India are fond of this work. There are yet no machines that can replicate it properly.
• If one does not want to manage workers themselves, outsourcing production to workshop owners is an option.
Cons
• High investment is involved in it as per piece making is high. Damages to clothes cost a lot and sample making also costs a lot.
• Needs a controlled environment and continuous supervision. Giving at home is difficult unless some artisan’s house is declared a workshop and women come and work there.
• Overhead costs need to be born since a workshop area is needed.
• Workers need to be retained for the slow-sales time of the year as well.
• Timelines needs to be followed strictly
Hand Embroidery
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Pros
• No high initial investment needed.
• A workshop is not necessary hence overhead costs of production can be saved. However, a workshop will ensure quality and delivery timing.
• Can be sold to exclusive clientele on high price.
• The business can have a mission: helping alleviate poverty through handicrafts.
Cons
• Access to skilled artisans is difficult.
• Delivery timings and quality of work cannot be committed in the absence of a workshop.
• Losses need to be borne by manufacturers as artisans cannot pay.
• Standardization is a challenge with big orders
Machine Embroidery
Pros
• Accounts for almost 80% of embellished fabric market with lawn and fancy embroidery.
• Though margins are not very high in mass market but volumes are so huge that profit is good. At brands and designers’ level, margins are also very high.
• Less human resource to manage as compared to hand work.
• More accuracy and precision in final products.
• Sells almost 8 months of the year.
Cons
• Initial investment for two-machines set up is around 20 million.
• Cut throat competition in low, middle and up class brands categories.
• Too many brands which makes product differentiation an issue.
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13. Constraints Analysis
Constraints of Wholesalers and Retailers
Wholesalers and retailers who manufacture their own products have to give credit to other
wholesalers or retailers even though everything has to be purchased on cash such as material and
laborers have to be paid as well.
Most mass market products have low margins due to lack of design innovation which is why
wholesalers and retailers try to find artisans who can work on low wages for them. This has become
quite a challenge now as artisans are either joining other professions or not ready to work on low
wages.
If wholesalers and retailers prepare a new design, their designs are sometimes sold to other retailers
and wholesalers by the artisans, depriving them to reap the benefit of a new design in terms of
money.
Though mass market wholesalers understand that innovation is the way to survive, their abilities
to innovate are quite limited. Some are risk averse too.
Sometimes, wholesalers don’t know the artisans they work with. They have to deal with wastage,
damage and loss almost every time they handover a big assignment for embroidery, particularly
when they are working with the artisans directly. Constrained by their circumstances, sometimes,
artisans sell the fabric or ready stuff to other retailers and wholesalers.
Emergence of brands has affected wholesalers’ work. Now brands can sell anything whether
embroidery or adda work. However, many wholesalers consider partnering with the brands as a
means to survive in future since hand embroidery is disappearing slowly but steadily from mass
market.
Working with brands is a good opportunity for the wholesalers but there are certain issues that
stop them from this collaboration:
• Brands require a lot of skill and perfection so rate of rejected pieces is very high.
• They require timely delivery and working with artisans means you cannot ensure timing.
• To deliver in time, heavy investments are needed- to furnish an order of 1000 pieces, you need to invest in 2000 pieces so that your work comes in timely. The assumption is that at least half of the artisans will return the work in time.
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Constraints of Exporters
Sourcing firms have to deliver large amounts in a short period of time keeping in view all the
quality standards specified by their customers abroad. Finding a one window partner for all their
hand work needs is important to them. Locating an organization that is trust worthy is a challenge
for them.
Constraints of Designers and Brands
Since these companies require high levels of craftsmanship in their products, they prefer to source
from reliable artisans and middlepersons. Their products demand high skill and commitment level.
Delivery timings are extremely important to them since they have to launch their seasonal product
lines in time.
Home based entrepreneurs as well as brands face the issue of getting their designs leaked out before
they are launched in the market. They emphasize the need to train the artisans in professionalism.
Constraints of Workshop Owners and Retailers
Training a novice in adda work is a laborious task, when the labor is skilled enough to produce
better work, he is picked by another set up. An ample amount of advance money has to be released
to contractors/middlemen. Every laborer in the workshop demands 20,000-50,000 in advance when
they start working with a particular workshop. This loan is never returned because they earn very
little but this has to be given in order to secure laborers.
Moreover, workshop/SME owner is expected to meet laborers’ household expenses too. In case of
an illness or a wedding in the family of laborer, the owner is expected to pay. In adda work, seasonal
nature of the operations poses many challenges for the manufacturers. They have to take care of
the artisans throughout the year even when there is no or slow business. Small workshop owners
face shortage of labor in high season when laborers prefer to work for bigger SMEs who can pay
better.
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Sometimes, strength of the labor is not enough to complete the orders which hurts their profit
margins. In Bahawalnagar, one of the SMEs owners stated that they have the capacity to
accommodate 500 laborers but they only work with 200 of them as skilled laborers are not available
easily. Elections, weather extremities, domestic issues, cotton picking season etc. delay work by
artisans for embroidery.
14. Appendix
Gender Sensitive Information
Factory owners employ more men than women in their workshops because in their opinion:
• Women take more time in understanding things due to lack of exposure.
• Women are less skilled than men generally speaking.
• Women cannot work with the same concentration as men do because they are worried about their household matters.
• Men are usually trained at some place while women come directly from home and need to be trained first.
• They take more days off as compared to men due to their responsibilities at home.
Since most women prefer to work from home, they cannot do adda work. Following are the reasons
why adda work cannot be given to home based artisans:
• These cloths cannot be washed and if you give this work at home, it is bound to be dirty.
• Women are unable to set the adda properly and keep it at a certain tightness.
• Since the fabric as well as material are quite expensive, any damage at home will be irreparable.
Since mainly males are employed in adda workshops, a widespread concept in the market is that
women produce inferior quality work. This is why, even those manufacturers who employ females
in their workshops try to hide this fact from the buyers in case their products are tagged as low
quality. This has become a hurdle in financial inclusion of females. Moreover, labelled as inferior
workers, they make less money out of the same work that males do.
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Embroidered Products
According to industry estimates, about 70% of the embroidered products are used in local
(Pakistani) market. The products include women / men suits, table & sofa cover, bed sheets,
badges, logos, T-shirt, caps, etc.
About 30% of the embroidered products are exported to different countries. These products include
T-shirts, caps, badges, logos, women/men suits, etc.
According to the estimate given by the industry and machine sellers, there are thousands of
embroidery machines operational in Pakistan. Most of embroidery factories are located in Karachi,
Lahore, Faisalabad and Sialkot. A few factories are also located in Hyderabad, Multan and
Rawalpindi. Therefore, any of the above cities would be a suitable location for setting up a
commercial embroidery unit. Raw material and labor is also easily accessible in these cities 6
Figure 166
6 SMEDA Feasibility online Report
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Cost of Setting up an Embroidery Unit of Two Machines
Table 8
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Pre – Feasibility Study Commercial Embroidery Unit by SMEDA
Disclaimer
This information memorandum is to introduce the subject matter and provide a general idea and
information on the said matter. Although, the material included in this document is based on
data/information gathered from various reliable sources; however, it is based upon certain
assumptions, which may differ from case to case. The information has been provided on as is where
is basis without any warranties or assertions as to the correctness or soundness thereof. Although,
due care and diligence has been taken to compile this document, the contained information may
vary due to any change in any of the concerned factors, and the actual results may differ
substantially from the presented information. SMEDA, its employees or agents do not assume any
liability for any financial or other loss resulting from this memorandum in consequence of
undertaking this activity. The contained information does not preclude any further professional
advice. The prospective user of this memorandum is encouraged to carry out additional diligence
and gather any information which is necessary for making an informed decision, including taking
professional advice from a qualified consultant / technical expert before taking any decision to act
upon the information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk
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Executive Summary
The demand for commercial embroidery is continually rising due to urbanized population and
changing life styles. Although there are a number of local manufacturers producing good quality
of embroidered cloths but still a huge demand exists for potential investment in the embroidery
business in Pakistan.
This particular pre-feasibility study is for setting up a commercial embroidery unit for both
genders. The focus of the business would be to provide quality products like embroidered fabrics,
bed sheets, table and sofa cloths, etc. All these products are proposed to be sold to wholesalers and
retail outlets in major cities of Pakistan.
The proposed business venture should preferably be located in any of the major urban cities of
Pakistan; to reduce initial capital investment, the proposed unit is to be established at rental
premises. The proposed machine can stitch 20,833 stitches in 1 hour. This unit will stitch 220 million
stitches in 330 working days with 2 embroidery machines on 16 operational hours per day,
however, initial operational capacity is assumed at 70%, whereas, maximum operational capacity
utilization is at 95%. This production capacity is estimated to be economically viable and justifies
the capital as well as operational cost of the project. However, entrepreneur’s knowledge of clothing
industry, development of quality cloths, attractive designs, competitive pricing and strong linkage
with suppliers and wholesalers network are factors for the success of this project.
The estimated total cost of the proposed commercial embroidery unit is Rs. 20.74 million out of
which Rs. 13.76 million is the capital cost and Rs. 6.99 million is for working capital. The project is
to be financed through 50% debt and 50% equity. The project NPV is around Rs. 29.11 million, with
an IRR of 39% and Payback Period of 3.41 years. The project will provide employment
opportunities to 13 individuals including owner / manager. The legal business status of this project
is proposed as ‘Sole Proprietorship’.
Introduction to SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in October
1998 with an objective to provide fresh impetus to the economy through development of Small and
Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the national income,
through development of the SME sector, by helping increase the number, scale and competitiveness
of SMEs" , SMEDA has carried out ‘sectoral research’ to identify policy, access to finance, business
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development services, strategic initiatives and institutional collaboration and networking
initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment has been a
successful hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business development services is also
offered to the SMEs by SMEDA. These services include identification of experts and consultants
and delivery of need based capacity building programs of different types in addition to business
guidance through help desk services.
Purpose of the Document
The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs in project
identification for investment. The project pre-feasibility may form the basis of an important
investment decision and in order to serve this objective, the document / study covers various
aspects of project concept development, start-up, production, marketing, finance, and business
management.
The purpose of this document is to facilitate potential investors in Commercial Embroidery
business by providing them with a general understanding of the business with the intention of
supporting potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally documented
sectors attains greater imminence as the research that precedes such reports reveal certain thumb
rules; best practices developed by existing enterprises by trial and error and certain industrial
norms that become a guiding source regarding various aspects of business set-up and it’s successful
management.
Apart from carefully studying the whole document, one must consider critical aspects provided
later on, which shall form the basis of any investment decision.
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Brief Description of Project & Product
The proposed project is designed as a small scale commercial embroidery unit. This unit will be
capable of providing its services to local garments and fabric manufacturers as well as those
garment manufacturers who are dealing in exports and require embroidery work on their
garments.
This sort of project is quite flexible in a way that there is no processing of raw materials required
and each machine is independent in its working. The project can be started even with a single
machine. However, keeping in view the potential and industry norms, the project will be more
feasible and economical with two or four embroidery machines.
Due to the increase in number of commercial embroidery units and competition, there are chances
that the market rates may reduce. However, this can be tackled by providing different value added
services to customers.
Another major threat to the business is credit factor. This is also related to the competition. The
customers may ask for credit facility for a longer period, and this can disturb the cash cycles of the
unit. This can be avoided by making a similar policy for all customers, so there will be no
complaints from customers and cash cycle will not be disturbed.
14.1.1.1. Production Process Flow
The production process flow of commercial embroidery unit starts with the purchasing of fabric
from the market, depending whether customer provides the fabric or not. Then comes the
designing and tracing phase.
The designs are developed either in house by employing a full time designer or can be out sourced.
After the completion of designing stage the designs are loaded on the machines and then
embroidery work is done by the machines on the fabrics with the help of embroidery threads.
Finally embroidered cloths are to be packed and dispatched to the customers.
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14.1.1.2. Installed & Operational Capacities
The installed and operational capacities of the commercial embroidery unit mainly depends upon
the installed machinery.
The pre-feasibility study is based on an installed capacity of 666,667 stitches per day on 16 hours
basis. While maximum capacity utilization of the unit is assumed at 95%, 633,333 stitches per day
and 209,000,000 stitches annually. However, during 1st year operation unit will operate at 70%
capacity and will stitch 466,667 stitches per day.
The details of operational and installed capacity according to product mix are provided in the table
below:
Table 9
Critical Factors
Following points should also be ensured to make the business successful:
• Assurance of high quality with consistency.
• Surety for on-time delivery of products.
• Competitive rates.
• Cost efficiency through better management.
• Aggressive marketing
• Attractive designs.
• Relationship with export manufacturers.
Geographical Potential for Investment
According to the estimate given by the industry and machine sellers, there are thousands of
embroidery machines operational in Pakistan. Most of embroidery factories are located in Karachi,
Lahore, Faisalabad and Sialkot. A few factories are also located in Hyderabad, Multan and
Rawalpindi.
Therefore, any of the above cities would be a suitable location for setting up a commercial
embroidery unit. Raw material and labor is also easily accessible in these cities.
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Potential target Customers/Markets
Demand of Pakistani embroidery is gaining momentum globally. Orders are being placed from
Saudi Arabia, United Arab Emirates, United Kingdom, United States, Belgium and Oman.
Pakistan has a great potential to compete in the global market, particularly in the Middle East
markets. With little effort it can gain a reasonable share.
The markets for embroidery products are as follows:
14.1.1.3. Local Market
According to industry estimates, about 70% of the embroidered products are used in local
(Pakistani) market. The products include women / men suits, table & sofa cover, bed sheets,
badges, logos, T-shirt, caps, etc.
14.1.1.4. Export/Foreign Market
About 30% of the embroidered products are exported to different countries. These products include
T-shirts, caps, badges, logos, women / men suits, etc.
Project Cost Summary
A detailed financial model has been developed to analyze the commercial viability of the proposed
Commercial Embroidery Unit. Various costs and revenue related assumptions along with results
of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are also attached as
annexure.
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14.1.1.5. Project Economics
The following table shows Internal Rate of Return, Payback Period and Net Present Value.
Table 10
Returns on the project and its profitability are highly dependent on the efficiency of the
entrepreneur in hiring skilled persons and maintaining good quality in terms of design, quality and
customers services.
14.1.1.6. Project Financing
Following table provides the details of required equity and variables related to bank loan;
Table 11
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14.1.1.7. Project Cost
Following fixed and working capital requirements have been identified for operations of the
proposed business.
Table 12
14.1.1.8. Space Requirement
In order to reduce the initial capital expenditure, the proposed Commercial Embroidery Unit will
be established in a rental premises. Therefore, space may be acquired in the industrial state or in
outskirts of big cities where skilled workers are available. The rent of the building will depend on
the area and geographical location of the unit. An estimated area of 10 Marla (2,250 sq. ft.) will be
required for the proposed venture.
The area requirement has been calculated on the basis of space requirement for production,
management and storage. However, the unit’s operating in the industry do not follow any set
pattern. Following table shows calculations for project space requirement.
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Table 13
For this particular pre-feasibility the rent amount has been determined at Rs. 72,000 per month
(calculated at the rate of Rs. 32 per sq. ft.).
14.1.1.9. Machinery and Equipment requirement
Following table provides list of plant and machinery required for an average size Commercial
Embroidery Unit.
Table 14
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14.1.1.10. Furniture and Fixture Requirements
The details of required furniture and fixture for the proposed Commercial Embroidery unit are
provided in the following table:
Table 15
14.1.1.11. Office Equipment Requirement
Following office equipment will be required for the proposed venture:
Table 16
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14.1.1.12. Raw Material Requirement
Main raw materials required are thread and sequence which is readily available in the markets.
Following are the details of raw material required for embroidery fabrics.
Table 17
14.1.1.13. Human Recourse Requirement
In order to run operations of Commercial Embroidery Unit smoothly, details of human resources
required along with number of employees and monthly salary are recommended as under:
Table 18
It is assumed that the owner would have prior experience or knowledge about the Commercial
Embroidery Business. Salaries of all employees are estimated to increase at 10% annually.
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14.1.1.14. Other Costs
An essential cost to be borne by the business is the cost of electricity; the annual electricity expenses
are estimated as Rs. 1,128,325. This project also requires marketing and promotional activities; for
which approximately 01% of total revenues (i.e. Rs. 1,549,625) will be spent on marketing and
promotion expenses annually. Similarly, during 1st year of operation communication and office
expenses are estimated at Rs. 123,600 each. The cost of maintenance of machinery and equipment
is assumed as Rs. 0.5 per stitch.
14.1.1.15. Revenue Generation
Following tables provide assumption for revenues and costs of the proposed Commercial
Embroidery Unit during first year of operation:
Table 19
Contact Details
In order to facilitate potential investors, contact details of private sector Service Providers relevant
to the proposed project be given.
14.1.1.16. Machinery Suppliers
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14.1.1.17. Raw Material Suppliers
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Useful Links
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Annexures
14.1.1.18. Income Statement
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14.1.1.19. Balance Sheet
14.1.1.20. Cash Flow Statement
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Key Assumptions
14.1.1.21. Operating Cost Assumptions
Table 20
14.1.1.22. Revenue Assumptions
Table 21
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14.1.1.23. Financial Assumptions
Table 22
Women Chamber of Commerce and Industry
Chambers of commerce and industry are private entities. They are, however, licensed from
Ministry of Commerce. This means that every chamber has their own style of working depending
on the person heading it.
Every chamber used to have a women committee but due to cultural taboos, women were not
comfortable joining it. In 2008, Pervez Musharraf’s Government initiated separate women
chambers through an ordinance. This ordinance expired but in 2013, another act reinstated women
chambers. This step was taken to increase engagement of women in business. There are 11 women
chambers working in Pakistan. Vice presidents are elected for one year. Elections are held every
year and a new board comes into office each year.
A woman either needs to have 51% share or sole proprietorship in order to be a member of women
chamber. Artisans are encouraged to be part of women chamber and participate in activities
initiated by it. However, likelihood of the artisans becoming a member is quite low due to illiteracy
and cultural restrictions on mobilization. Moreover, very few women artisans are running their
business themselves. However, those who venture out and attempt to run their own businesses are
provided support from the chambers.
Chambers help women from getting a business account to NTN number and only then registers
them. Even though it's not the job of the chamber to do everything that comes before joining the
chamber. Training, capacity building, general help, developing linkages to different organizations
like TDAP, SMEDA etc., are the activities done by women chambers. They do not provide any
financial help to their members but help them to be aware of different platforms through which
women can get loans or financial help.
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They also guide women according to their skill level for exhibitions. 2-3 women can be grouped
together to participate in one stall. Costs are shared among them and participation becomes cost
efficient.
Women chambers need patronization. Expenses for the secretariat need to be met. Right now
minimal funding is being provided by the Government and these chambers are running on self-
support basis through the fees charged to the members.
Following incentives are being provided to women through these chambers:
• Quota in TDAP for women exhibitors from Government to incentivize women.
• There are loans for women entrepreneurs which has it has lowest markup rates but the chamber wants payback time to be increased for this loan scheme.
• WEXET is the largest exhibition in Pakistan for women organized by TDAP in which women enraptures from Bahawalpur, Multan or Sindh participate.
• TDAP give subsidized stalls in exhibitions. Half the price of the stall is paid by the Government of Pakistan.
No consolidated data is available on the activities etc. since all chambers are working separately.
These chambers themselves do not collect a lot of data or keep record of each activity. Women
chambers have to go a long way because out of 52% population, only 3% have been registered in
chambers.
Women Chamber Multan has taken the following:
• 220 women members in Multan women chamber.
• Blue fair gives exposure and learning to artisans too. Brands and designers are also there which makes this event a grand scale event. A section is dedicated to women artisans as well.
• Steps for Women chamber has written to Canadian government for links in hand embroidery.
• Written to WomenX to come to Multan so that women can participate.
• Women National business agenda is being worked upon by Multan chamber.
• This document will give recommendations on access to finance, Recommendations for FBR and TDAP to grow women’s share in business.
A specimen of Activities by Karachi Chamber
Development work for Women Entrepreneurs and Artisans by KWCCI District East, Karachi,
Sindh. 2nd Quarterly Report June to December 2015
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• Bachat Bazar mid-June 2015
• Visit to the Hussaini Yateem Khana for ‘Eid donations
• Visit to British High Commission to create linkages.
• Dastkar Exhibition South Asian Bazar (Delhi, India August-September 2015)
• Visit by Jaica from Japan to the K.W.C.C.I.
• Malaysia conference and exhibition in 2015. (Muslim world biz Oct. 2015)
• US Aid meeting an attended in Islamabad.
• Lahore Wexnet by TDAP.
• Exhibition in Faisalabad at Sitara Mall organized by president FPCCI Mian Idrees.
• Karachi women chamber goes to congratulate senior Vice President Mr. Khalid Tawab (F.P.C.C.I)
• Meeting of President’s chamber in Islamabad in January 2016.
• Single country exhibition 15 to 17 January attended in Colombo Sri Lanka.
• Honored by pillars of Pakistan.
• The SAARC conference & Expo
• Pakistan Expo
• Solar workshop and screening of Women’s rights Film
• SME Conference and Expo
• Inaugural of Display Centre
• SME Meeting attended at FPCCI
• German Pakistan Trade Investment Presentation at Marriott.
