Trade Secret of Women’s Enterprises: Stay Small, Go Big

There must be in the small, colorful bits and pieces that come with marking a holiday that enables them to generate a festive air and inspire joy in the heart. Whatever makes these minutiae do what they do, it seems drowned in the cheer they create and in the celebration—but who cares? That they create joy is enough and in that their reason for being and purpose seem fulfilled. Perhaps because of their smallness and because of what they’re made of, these things are not given much moment. It can’t be denied, however, that an event is much less festive and rather empty without them. Though cheer may not directly flow from them, cheer being an internal bubble of joy rising from within the human makeup, these bits and pieces do have a good part in creating the effect.

When we see the streets, public places and homes festooned with lights and display colorful ornaments, we know that a happy season is near, and Christmas tops the list. When colored lights deck street trees, wound about their trunks and branches in great care and artistry, exuding goodness, the city’s usually drab byways turn into extraordinary places and exciting promenades on evenings—especially when chill has invaded the air. When tiny tinny stars, papier mache balls, paper wreaths and buntings, and whatnots, all in attractive colors, are tacked on and hang from the eaves, shimmer and throw back light, and when a Christmas tree occupies a place of glory at home, the bubbling of cheer cannot be kept down at the sight.

These ornamental bits and pieces, lumped as one under “holiday decor,” have grown into a big industry, and, while they are the lightest handcrafted items among the ever widening array of handicraft groups, among them gifts, arts and crafts, fashion accessories, houseware, and furniture, they are not necessarily the simplest. Many of these bits and pieces, though made of the lightest material, come in so artistic and so attractive designs that only long honed skills, patience and a meticulous penchant for attention to detail bring off winners from out of the long and elongating line of products in a highly competitive field.

Holiday décor products, and the industry, can be described as one which features a wide variety of ideas and designs, fast moving and as fickle as fashions in garment. The name of the game is creativity, and there is always room for new shapes and concoctions, innovations and new material. Designs and concepts come and go and then, much like fashion, wing back in cycles of revivals. Lightweight and low-priced, the small bits and pieces have short market life and are as good as disposables. Most, if not all, are discarded at the close of each season. Only a few select items are kept, stored, to be reused the next season, or recycled as gifts to friends. This makes the seasonal demand for the products on an even keel, steadily rising from year to year.

Piece for piece in terms of price, holiday décor items expectedly are the lowest among the handicraft groups, but it is amazing to know that sales of these bits and pieces and whatnots have snowballed in 2005 to US$6.4 billion global business worldwide. This business sector has been “averaging a modest 6% yearly growth” in the last survey period spanning 2002 to 2005. More than half of that volume of global market, no less than a 64% slice, were made up of Christmas décor and related items. Only 23% went to items for Easter, Halloween and other festivities, while 13% of the pie went to holiday lights and other lighting sets.

A study visit at the F.A.M.E. International Exhibit 2007, one of the yearly industry exhibits regularly held in Manila as part of the country’s product sales blitz efforts, provided a closer look at the holiday décor industry.

According to Ms. Felicitas Agoncillo-Reyes, assistant secretary of the Department of Trade & Industry, FAME 2007 was the 46th edition of the product display extravaganza sponsored and worked out annually by country’s Center for International Trade Expositions and Missions. As in previous exhibits, the extravaganza was a collegial effort put together for the country’s small and medium scale enterprises (SMEs) in collaboration with business support organizations of participating industry sectors. Visitors are treated not only to a sampling of holiday decors, but at the same time also to a choice in the latest concepts and designs in fashion accessories, gifts and houseware, arts and crafts, and furniture. Foreign buyers and their representatives are given an early free run of the place for shopping and trade negotiations, before the exhibit is declared open to the public.

Through the years a tradition of holding two such exhibits every year has been established, one in April and the other in October or November, with special related events intervening between the two major ones. The dates are set apart to give logistical space for sales, production and shipment time within each season. The November canto looks forward to market demands in Easter and Summer next year, while the April edition anticipates requirements in Halloween, Christmas and other feasts in Fall and Winter seasons in the Western hemisphere, the traditional destination of holiday décor exports. Every exhibit functions as the local counterpart of international events held in other countries, with those held in Hongkong topping the list in terms of international participation. It is a must for Philippine producers, suppliers, exporters, and foreign importers to be at these exhibits to learn of emerging concepts, market trends, and technology development in skills and production.

A woman entrepreneur who has made the industry her whole life in the last two decades, Ms. Marlane Villa-Real, said that the holiday decor business support organization, which is the Christmas Décor Producers and Exporters Association of the Philippines, is the champion of this product sector. The organization provides support and assistance to members in updating the state of the art and meeting the challenge of competition abroad.

The period 1987-2000, she said, were the golden years of the holiday décor industry in the country. It was the time when annual exports steadily rose and peaked at US$104-$105 million. Haply, from that peak, industry performance steadily declined in succeeding years, due largely to the aggressive sales performed by competing countries. By the end of 2006, Philippine holiday décor stagnated, with exports coming up with only US$57 million that year, without any promise of change for the better in sight. In three industry surveys, the latest being that of 2006, respondents surveyed among local industry players invariably point to China as single biggest challenge to the country’s prospects in the sector, followed far back on the track by India, Thailand, Vietnam and Taiwan. For example, in 2005, U.S. households accounted for US$3.3 billion of overall global holiday décor imports, and China captured all of the $2.1 billion worth of that market. The rest of the pie was shared among the other exporting countries, with the Philippines capturing only about $55-$57 million of the slice.

The dismal picture has not taken the wind out of the country’s sail. It might even prove to be a blessing in disguise. Due to the phenomenon of the sudden rise and sharp fall, local producers and exporters have fallen back, giving themselves space for serious thought, looking at the situation in terms of strengths and weaknesses, and making ready to plot and accept a more logical rank and position for the local industry in the global sphere, considering its situation vis-à-vis the rest of the players in the field.

It has greatly helped the local producers and exporters of holiday décor products to go into in-depth industry study and to learn from sectoral situation reports undertaken through the initiative of Pearl2 of the Canadian International Development Agency. The project is a five-year study from 2002 to 2007 in support of the development of small and medium enterprises in the country. It uses the value chain analysis method developed by a Dr. Michael Porter of the Harvard Business School. The project’s focus on the holiday décor sector was undertaken in partnership with the De La Salle University’s Center for Business and Economic Research and Development.

According to the recent report of Pearl2, the value chain method looks hard at the primary activities of a firm, namely: inbound logistics, operations, outbound logistics, marketing and sales, and service. It then determines which aspects of the operation can be enhanced, where the firm can reduce costs and optimize resource use. Or, it may determine that a change is called for and it prescribes ways by which to reconfigure the entire chain of operation to achieve higher performance, increase product or service value, lower costs of operation, among others.

As a consequence of the study, many things came out of the woodwork. Based on the situation assessment, the report prescribes some very logical measures to be taken. The focus of sales should be to recover lost accounts in the global market and to diversify its markets, at the same time turning an eye on regional and local markets. It suggests a serious shift to medium and high-end markets, market segments which are not price-sensitive. The move would mean a production realignment, where the aim is to create greater product value in terms of design and craftsmanship. Diversifying export markets would likewise mean decreasing the industry’s traditional dependence on the U.S. and other markets and to intensify efforts at getting business in Europe and other regions, including Australia, the Middle East and Japan. The shift in sales strategies and market targets would ultimately require an industry-wide upgrading on the technical and human aspects of production. Though the report did not emphasize it, it would likewise entail an overhaul of the values molding and informing the most important aspect of production, the human factor.

“It’s in the attitude.”

To sustain the effort in skills and quality improvement, a continuous values formation program for all players and stakeholders should be instituted industry-wide. It should take in all firm owners and entrepreneurs, the producers and exporters, all the craftsmen, staff, and workers at all levels, all subcontractors, and all the suppliers of raw materials. This was the strong view of Ms. Marian Nash, director of FOBAP (Foreign Buyers Association of the Philippines), who is also an international project consultant of various concerns.

She said that a key consideration in the development and the achievement of a stronger position for the local holiday décor and other handicraft-based industries is the availability, proximity and quality of raw materials. If only raw materials are pre-treated and preprocessed at the level of the suppliers and material quality is zealously kept according to desired specifications and standards, in view of a particular target market niche, a lot of good will result in the quality and value of Philippine export products. She then added that all this will result from having the right kind of working attitude among all industry entrepreneurs and workers. These stakeholders can effect the change among themselves, as it will redound to their benefit, she said, but a values formation program can help achieve the change where old attitudes have hardened.

The line is not unfamiliar. We have heard it said and shouted in all sectors of Philippine society. But the elephantine mass has simply not budged, it may as well be stone-deaf—or dead. Hope, however, springs eternal in the human heart and it does not stop from conjuring visions and dreaming dreams. It climbs down the holiday décor tree and takes a hard look at the ground on which the tree lives and confronts its roots.

According to the Department of Trade and Industry, there are about 2,000 producers of holiday décor in the country, employing 250,000 workers. These workers come from the poorest segment of the population. It is also the segment where most of the more than eight million overseas Filipino workers have come from.

The initial lure of the power of the dollar, the euro, or the pound, which led the poor to seek job opportunities overseas and the local producers to think big, could likewise be the key to opening an entirely new vista for a people made weak by the sight of the sheer size and the numbers of the competition they face. If only each one of the 250,000 workers in holiday décor can be made to realize and appreciate that they, too, can bring in the bacon from overseas without leaving home, much in the same way as their family member who is across the seas, perhaps hope will be not be so elusive and distant. If a family member has done it, the local producers can do it too. The task will not be as daunting or onerous if hope is seen as a reality, close to home and within reach.