II.

Current Marketing Situation

A. Industry and Market Analysis

1. Size, sales and growth of the industry

HANDICRAFT

A handicraft, sometimes more precisely expressed as artisanal handicraft or handmade, is any of a wide
variety of types of work where useful and decorative objects are made completely by hand or by using
only simple tools. It is a traditional main sector of craft, and applies to a wide range of creative
and design activities that are related to making things with one's hands and skill, including work with
textiles, moldable and rigid materials, paper, plant fibers, etc.

Handicrafts play very important role in representing the culture and traditions of any country or region.
Handicrafts are unique expressions and represent a culture, tradition and heritage of a country. The
Handicraft Industry is one of the important productive sector. Various attempts have been made to define
this broad and diversified industry and handicrafts are a substantial medium to preserve of rich traditional
art, heritage and culture, traditional skills and talents which are associated with people’s lifestyle and
history.

Almost every family in the Philippines owns one or more handicraft products like baskets, brooms, feather
dusters, bamboo sofa set, cabinets, and other furniture. Accessories like earrings, bracelets, necklaces,
and other clothing apparel which young people today are fond of wearing are also made from native
products like beads, shells, seeds, and others. This is a clear indication that our handicraft industry is
enjoying the patronage of Filipinos nationwide.

Philippines is blessed with rich natural resources that are scattered throughout its 7,107 islands. These
God-given natural wonders are the sources of people's food, shelter, and other basic needs. After some
time, people acquired many skills that enabled them to tinker with nature. They used the raw materials
from trees, plants, and other natural resources that are very abundant and turned them into simple, yet
useful tools or instruments.

The makers of handicrafts and art pieces have the most to gain when they bring their business online,
with industry experts seeing a potential for Philippine-made goods to capture a wider global market. Local
made crafts are currently the top products on online platforms they handle, noting small-scale producers
and firms may find sizeable room to widen their reach.

Many Filipinos are engaged in handicraft businesses. Handicraft-making has become a means of
livelihood for them, especially now that many handicraft owners are exporting their products to Japan,
United States, Canada, Australia, Hong Kong, Singapore, and other countries around the world.

The Philippines is the second largest world producer of handicrafts, mainly baskets out of indigenous
materials. This industry continues to provide a respectable contribution to foreign exchange earning of the
country (US$71.9M in 2000) while many handicraft items are also sold on the local market. All together,
the sector is providing livelihood to more than 1 million Filipinos. Although the industry has experienced
some setbacks over the last ten years, it has kept the respect of the high-end markets in the United
States, European Union, and Japan and has only lost a great part of the low-end market to China, our
main competitor.

Despite this, Filipino craftsmen have indigenously overcome scarcity and increasing prices of raw
materials by constantly producing new designs for their products. Over the years, Philippine handicrafts
have evolved through innovative changes in designs reinforced by exciting choices and combination of
indigenous materials. There is, however still ample room for improvement, particularly in remote upland
communities with little access to market information, brokering services, capital, and technologies for
value addition.

According to Philippine Chamber of Handicraft Industries Director Dennis Orlina, Market realities for
example, consumers demanding new products outside of those made in China, increase of cost of
production in China and the general decision of China to move towards service-oriented industries will
drive increase and the industry achieved its 10-percent growth target last year as buyers continued to
purchase handicraft from the Philippines.

Reference: https://colosushandicraft.wordpress.com/2013/04/25/philippine-handicraft-industrytheir-
benefits-and-importance/
http://www.philstar.com/business/2014/02/03/1285902/handicraft-makers-eye-4-10-export-growth-yr
https://en.wikipedia.org/wiki/Handicraft

FAIR TRADE INDUSTRY

Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity
in international trade. It contributes to sustainable development by offering better trading conditions to,
and securing the rights of, marginalized producers and workers – especially in the South.

The Fair Trade model for international trade reverses the structure of the conventional Free Trade model
which the majority of international trade operates by. It is the role of larger Fair Trade organizations, such
as WFTO, not to dictate policy to small producers, but rather to support their autonomy in matters of
management and product pricing. The price of Fair Trade Products is one that has been decided upon
through discussion between the producers and the retailers.

As a movement which values people over profit, the ‘value’ of a Fair Trade product is not limited to the
retail cost of that product, but extends to the processes and relations which go into the production and
trading of that product.
In the case of some of the first Philippine Fair Trade organizations, including Social Action for Filipino
Youth (SAFFY) and People’s Recovery, Empowerment and Development Assistance Foundation (PREDA), the
work of foreign religious missionaries, such as Father Shay Cullen of PREDA, helped transform existing
socioeconomic development programs into Fair Trade ventures. In doing so, the organizations were able
to expand their consumer base due to the opportunities afforded by new trade channels to export markets

The People’s Revolution in 1986 drew the world’s attention towards the Philippines, while movements of
solidarity with the non-violent revolution generated international support for Philippine-made Fair Trade
goods. This included the ‘Negros Project’; a direct people-to-people trade between Japanese consumers
and displaced sugar plantation workers from Negros which was developed and supported by the Japanese
Committee for Philippine Concerns (JCPC). The aftermath of the People’s Revolution also gave birth to
Salay Handmade Paper Industries Inc. (SHAPII), a civic-minded organization, which, through the
manufacture of paper products, sought to alleviate the poverty and displacement of citizens in the town of
Salay, Northern Mindanao.

Around this time other FTOs sought to directly counter the inequalities of the conventional trading
system, among them Southern Partners and Fair Trade Center (SPFTC), whose mission is to provide a
direct link between producers and consumers and, in doing so, eliminate the role of middlemen
controlling product prices and profiting at the expense of grassroots producers and agricultural workers.

Up to this point, the Fair Trade Movement in the Philippines was largely decentralized, and while there was
co-operation between various Philippine FTOs, they lacked a unified message and objective. This received
a boost with the creation of the Advocate of Philippine Fair Trade Inc (APFTI) in 1994, as an organization
which sought to collaborate with other Philippine FTOs to form a unified voice for the advocacy of Fair
Trade

The creation of the country network, WFTO-Philippines in 2002 as a formal coalition of Philippine FTOs
was the next important stage in forming a cohesive network of Philippine FTOs with shared objectives to
provide fair and sustainable livelihoods for disadvantaged producers, promote a trading system based on
solidarity, fairness, and mutual respect, and advocate the Fair Trade movement both in the Philippines and
abroad.

References: https://wftoph.wordpress.com/about-fair-trade/

C. Company Profile
SAFFY Handicrafts is the marketing arm of SAFRUDI, the Social
Action Foundation for Rural and Urban Development, a community
development organization that began in 1966. Through their social
enterprise program, they help empower marginalized producers and
artisans throughout the Philippines.
SAFFY began as a workshop that provided alternative livelihoods for
youth and women in marginalized areas of Manila through sewing
projects, and now assists some 34 small producers groups. They also
run their own unit that specializes in making capiz shell items.
Artisans who work with SAFFY benefit from product development
assistance, access to markets, micro-financing, technical training and
special incentives for quality craftsmanship.
In addition, SAFRUDI's social development programs also include health and nutrition programs,
sustainable agriculture projects, and community organizing. SAFFY has a lovely line of capiz shell items,
as well as a variety of products made from sustainable wood, natural fibers, and recycled materials.

Mission
Championing Filipino craftsmanship through Fair Trade
Vision