Bottlenecks in the branding of exportable products
In accordance with the 2009 trade policy, the commodity development programs are to be implemented under two distinct and pre-identified groups. The first group represents a special focus area that consists of labor-intensive products that are already established in export markets such as (i) ready-made clothing, (ii) carpets and woolen articles, (iii) pashmina and silk products, and (iv) handicrafts. Under the Orientation Zone Development Group, priority would be given to products with high export potential such as agriculture, forestry products, precious stones, gold and silver ornaments, processed leather. , etc. The 2015 trade policy added more articles to make it a comprehensive group of 26 goods and seven services. Factors such as backward links, scale of production, market exploration and quality control do not appear to have been taken into consideration when listing.
The branding of products and services requires sincere effort to build and improve their identity and sustainability. Even though their quality meets international standards and huge export potential, the failure of the government to formulate appropriate and pragmatic branding activities has resulted in obstacles in their export to overseas markets.
The challenges of branding
Carving out a sustainable niche in international markets through effective branding is the key to reducing the trade deficit in addition to helping to replace imports. People are willing to pay extra when the products resonate with a particular brand. Nepalese rugs have been stamped with the seal of the Nepal Good Weave Foundation (formerly Nepal Rugmark Foundation) which not only addressed child labor issues, but also made the carpet weaving and spinning sectors viable. Exports of pashmina products also received a boost once they were labeled as Chyangra Pashmina.
The reality is that serious and rigorous brand experimentation has never been put into practice, even for niche products like hemp. Local requirements are generally overlooked when considering brand interventions for international markets. Branding efforts in the Nepalese fabrics sector have not received due attention. A downward spiral in the volume and value of trade in most exportable goods with enormous potential bears witness to this. The 2019-2020 annual foreign trade statistics show that woolen rugs and ready-made garments account for 6.30% and 4.45% of Nepal’s total exports, respectively. According to the Trade and Export Promotion Center, carpet and pashmina exports declined by 4 percent each between 2016 and 2020. Ready-made garments, which accounted for 48.75 percent of Nepal’s total exports in 2000, fell to 18.38 percent in 2009, suggesting the branding imperative as a key intervention.
A successful branding of a product requires an enabling environment in the form of an infrastructure encompassing regular power supply, IT connectivity, roads, warehouses and other government supports, a skilled workforce, relocation of factories and associated logistics. It is the lack of institutional and political support mechanisms that has led to the failure of the branding of Nepalese clothing. Export promotion zones have proved ineffective and have even fizzled out. They failed to attract investment and always had issues such as proximity and accessibility for entrepreneurs. According to a South Asia Watch Trade, Economy and Environment (SAWTEE) study, exporting goods from Nepal takes an average of 44 days and costs $ 1,599, the highest in the region.
Nepalese exportable products are expected to reach the stage of mass production while carving out their own niche to be able to market themselves as an independent brand. To achieve this, Nepalese brands can keep the Bangladeshi ready-to-wear segment as a benchmark. Marketing strategies should generally precede branding efforts. Brands must be accepted locally before making inroads into foreign markets. This is the case of the Nepalese clothing market which is full of several international brands. Local traders claim their brands are 30% cheaper than imports from India and China. So, to stay in business, our local products must have a competitive advantage over foreign brands in terms of price. Thinking about both backward and forward linkages could add to clothing authenticity, product superiority and price competitiveness. The certificate of origin helps to strengthen the credibility of fabric brands and to stand out thanks to their exclusive creations, in demand on international markets.
The fabric sector empowers marginalized and disadvantaged communities in addition to helping social transformation by providing a better way of life for the working class in Nepal. Branding efforts can highlight and publicize this aspect and succeed in reinforcing the feeling of “ethnocentrism” among Nepalese consumers. Today, consumers have easy and full digital access to local and international brands. Thus, a full understanding of changing customer preferences and shifts in their perceptions is the key. sine qua non for all brand initiatives. Consumers resonate well with brands that offer quality or value for money or convey a sense of prestige and social status.
Innovate or perish
There are several sector-specific institutional barriers and legal loopholes, as well as government constraints. To overcome them, empirical needs-based research must be carried out. For this, the government and associated institutions must invest their time, energy and money. This involves targeted segmentation, targeting and positioning analysis of the target customers we intend to reach, both inside and outside Nepal. In addition, collecting the views of consumers and getting their perspective on branding initiatives from marketers becomes a critical factor.
Market research really makes sense when it focuses on exploring new markets rather than existing ones. All branding and communication exercises involving exportable products require sincere and dedicated efforts on the part of all players in the ecosystem. The identification of market needs, both national and international, in particular in terms of color patterns, material thickness, etc., becomes a necessary prerequisite for all this research. As the saying goes, innovate or perish. Local traders engaged in export business should not only complain about the drastic contraction in their turnover, but creatively respond to their challenges.