UN Conference Paper Poverty Reduction and E-Commerce

Asif Kabani, MBA Project Manager, Mapping - AKDN Aga Khan Development Network, Pakistan

Address: Mobile: +0303 6226110 No. G-2, Plot 255/1/17 Phone +92-21 7211968 (R) Noorani Sagar, Ruby Street Office 7216330, 7210850 Garden West, Nisther Road Fax +92-21 7227210 Karachi-74400, PAKISTAN Email [email protected]

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Success stories and country experience of Pakistan KARAKORAM AREA DEVELOPMENT ORGANIZATION (KADO)

Women & E-commerce Pro-Poor E-commerce Rural Areas & E-commerce

Prepared by: Asif Kabani, Project Manager Mapping, Aga Khan Development Network- Pakistan

for

Ministry of Science & Technology Government of Pakistan, UNCTAD (Geneva) and UNDP (Pakistan)

© 2002 – All Rights Reserved

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COM

Table of Content OVERVIEW – KADO (E-COMMERCE & POVERTY REDUCTION) 1

KARAKORAM AREA DEVELOPMENT ORGANIZATION (KADO) 1

Thread Net Hunza 2

Poverty Reduction through use of ICT & E-commerce 3

VILLAGE COMPUTER LITERACY CENTERS 3

KARAKORAMHUNZA CYBER SITE 3

E-COMMERCE 4

PRODUCT - EMBROIDERY WORK 4

PRODUCT - SHARMA OR PALOOS 5

PRODUCT - CARPETS 6

PRODUCT - FABRICS 7

PRODUCT – MUSICAL INSTRUMENTS 8

POVERTY REDUCTION & E-COMMERCE WITH KADO 9

ON-LINE SHOPPING PROCESS 9

STEP 1 - SEARCHING (PRODUCT) 10

STEP 2 – SHOPPING CART (ADD, DELETE, UPDATE) 10

STEP 3 – TERMS & CONDITIONS 11

STEP 4 – ORDER FORM (order & customer particular’s) 11

STEP 5 – PAYMENT – CREDIT CARD (VISA & MASTER CARD) 11

STEP 6 – PROCESS ORDER (sale, inventory, receivable) 11

STEP 7 – SUPPLY (goods, commission, payment) 11

SUMMARY 12


1

OVERVIEW – KADO (E-COMMERCE & POVERTY REDUCTION)

KARAKORAM AREA DEVELOPMENT ORGANIZATION (KADO)

KADO is a community-driven local intermediary organization working to promote sustainable

development in mountain areas in northern Pakistan starting activities in Hunza valley. KADO promotes

culture-sensitive and environmentally sustainable micro-enterprises creating village-based income and

employment opportunities for artisans, small producers, women, the disabled members of the community

and other disadvantaged groups. It is also involved in environmental awareness raising and solid waste

management, promotion of arts and cultural activities and have recently involved in promoting the

knowledge and use of Information and Communication Technology (ICT) in rural areas.

KADO was established in 1995 (initially known as Karakoram Handicraft Promotion Society- KHPS)

and incorporated in February 1998 in Gilgit under the name of KADO as a company limited by guarantee

and not having share capital.

Current projects include:

1. Karakoram Handicraft Development Programme (KHDP)

2. Hunza Environmental Committee (HEC).

3. Rehabilitation Centers for Special Persons.

4. Hunza Arts & Cultural Forum (HACF)

5. Cyber Karakoramhunza Project


2

As a crosscutting theme, KADO is also involved in Human Resource Development, Institutional

Development, capacity building and promotion of

CBO/LDO Networks, Gender and Development and

addresses human rights issues relating to disadvantaged

groups. Most of the activities are supported by the Swiss Agency for Development and Cooperation

(SDC) and the Aga Khan Trust for Culture (AKTC)/Aga Khan Cultural Service Pakistan. The Spanish

Embassy also provided one-time small grant to the rehabilitation center for disabled persons. At present

around 2300 women artisans’ work for the projects from their homes. Another 60 women work at seven

workshops daily and produce finished products. The products are marketed under the brand name of

Thread Net Hunza through retail partnerships with around 18 local and national retailers. Tourists are the

prime market for these products. Local and national exhibitions are held to promote these products.

Thread Net Hunza

Unique and beautiful products are made with affection and the highest of quality standards by the famous

artisans of this area. The range of Genuine Hunza handcrafted goods is

breathtaking in its diversity. KHDP projects offer unique quality embroidery,

wooden musical instruments, fabrics, Sharma's and carpets. Adapting traditional

motifs and designs, the Karakoram Handicraft Development Programme

attempts to transform local handicrafts into globally marketable products.

The project provides Product Design, Training and Marketing services and is

involved in trading between the producers, artisans and retailers. The project was initially started as a

tripartite Action Research project between Karakoram Area Development Organization (KADO), the Aga

Khan Cultural Service Pakistan (AKCSP) and the Swiss Agency for Development Cooperation (SDC) in

1996. KHDP is now being run independently by KADO with continued technical and financial support

from SDC.


3

Poverty Reduction through use of ICT & E-commerce

To take advantage of the growing opportunities offered by the information and communications

revolution, KADO has embarked upon a vision to effectively and creatively use ICT for local

development in this physically and economically isolated and marginalized mountainous region. Despite

its marginality, the Karakoram region offers rich content in the form of biologically and culturally diverse

habitat and people. The two-pronged aims are:

i) To explore the full potentials of eco-and cultural tourism and contribute to the body of global

learning by making the indigenous knowledge and experience accessible to all; and

ii) To lessen the 'digital-divide' by providing access to and training on ICT tools to enable the rural

communities in this mountains to improve their livelihoods through:

1) Village Computer Literacy Program

2) E-Commerce solutions

3) Karakoramhunza Cyber Site

VILLAGE COMPUTER LITERACY CENTERS

KADO has recently supported two village literacy centers in Hunza. These centers provide training to

rural women in software applications. These centers are being run on cost-recovery basis in partnership

with local communities. The future vision is to develop 10 such centers in Hunza and promote these

centers as local hubs for E-villages.

KARAKORAMHUNZA CYBER SITE

KADO has also received support from PAN-IDRC to develop a homepage ‘Karakoramhunza cyber site'.

Work on the project is in progress and the site will be launched by end 2002.This will be the first internet

based ICT project in the Northern Areas, which will promote eco-and cultural tourism potentials, share

indigenous community experience and research into the ICT and internet applications in the rural

mountainous areas of Pakistan.


4

E-COMMERCE

To reduce poverty KHDP and KADO has taken handicraft e-commerce initiative in collaboration with

IDRC PanAsia networking to promote local products made by women and disabled artisans. These

products are than sold through the B2C (Business to Consumer) model of e-commerce. For on-line

shopping, please visit our e-commerce site at www.threadnethunza.com

PRODUCT - EMBROIDERY WORK

Embroidery work is a household hunar (skill) and serves as

a safe haven for all types of creativity and self-expression.

Hunza women have been trained in embroidery techniques

at home for generations. Every woman must learn a

common skill before her wedding.

For the women embroidery is a form of self-portrait and serves as an important asset. The fine cross-

stitches using superb design and thread color say a lot about the producer, her aesthetic sense, her culture

and her tradition. For them it is not only an art but also a tool that brings about confidence and self-

reliance for women. Using their spare time creatively, today around 2300 artisans of Hunza are

transforming traditional handicraft items into practical accessories for modern times without

compromising the beauty of indigenous motifs and designs. Embroidery provides additional income for

thousands of women, which in turn helps to raise the standard of living in rural areas where most income

generating activities are seasonal. See more products on www.threadnethunza.com

Pencil Case Large Embroidery on Top, Zip Closure, Hanging Strip on one end, Fabric Cotton

Gents Glasses Case Front side full embroidery., foam stuffed, shoulder string 53" and fabric cotton


5

PRODUCT - SHARMA OR PALOOS

Sharma or Paloos, is a traditional floor covering made of

Yak or Goat hair. It is popular for its durability, roughness

and high insulation against cold and heat alike. The Project

has involved Special Persons in various processes of this

craft. This work therapy helps them rehabilitate, integrate in

the society and earn income in a dignified manner, hence

ameliorating the human rights situation for this

disadvantaged group.

Chashm-e-bulbul Size: Max:10' x 15' Min:2' x 2' Feature: Goat hair/Yak hair Color: Black, White, Brown

Mangol Size: Max:10' x 15' Min:2' x 2' Feature: Goat hair/Yak hair Color: Black, White, Brown

Plain Sharma Size: Max:10' x 15' Min:2' x 2' Feature: Goat hair/Yak hair Color: Black, White, Brown

Plain Sharma Size: Max:10' x 15' Min:2' x 2' Feature: Goat hair/Yak hair Color: Black, White, Brown

See more products on www.threadnethunza.com


6

PRODUCT - CARPETS

The Carpet/Sumac projects supported by KHDP at Gulmit

and at Hunza Carpets (Ltd) initiated by a local

entrepreneurs who received technical and credit support

from the Aga Khan Rural Support Programme (AKRSP)

during the start-up phase, are instrumental in bridging the

supply-side gaps and promoting and developing local

carpets. Around 200 women have been trained and

involved in production. The project guarantees that the

women contracted work under good conditions and are

paid fair wages for the work they produce. Although the

skill of carpet weaving is not a historic Hunza one, the

carpets skill have traditional and unique element to them.

Their uniqueness lies in the fact that designs and motifs

used are taken from traditional Hunza embroidery patterns

and only vegetable dyes and good quality local wool are

used in the manufacturing these products.

Hunza Star Size: Max: 7 sqft Min: 1 sqft Feature: Silk emb. with vegetable dyes, silk embroidery on cotton cloth with cross stitch, approx. 400 stitches per square inch.

Hirimun Design Size: Max: 7 sqft Min: 1 sqft Feature: Soumak, wool on cotton vegetable dyes, approx. 150-160 nodes per square inch.



7

PRODUCT - FABRICS

Ganish is the first settlement of Hunza founded nearly 1000

years ago. Situated on a junction of the old silk route, with

sacred rock inscriptions near Haldenkish, pilgrims from

China destined for the ancient center of Ghandhara

civilization at Texila and Buddhist monks traveling to

China and Central Asia used this land route for centuries.

Ganish Fabric weaving Center builds on the traditional

historic built heritage, the hardworking and determined

nature of its settlers especially women and the growing

opportunities offered by the nascent tourism sector in

Hunza. Product ranges include; woolen shawls, cotton and

woolen fabrics, scarf, tablemates and durries.

Table Mates

Product is available in different sizes and colors made out of cotton and acrylic thread. These product are used as show pieces and could be used as a functional products too. For a finer look, tassels are made on two ends.

Blinds

Blind is made with cotton and acrylic thread. straw is also used as a warp. this product is used as a window blind and wall hag. sizes can vary from 18*30 inches to 34*60 inches



8

PRODUCT – MUSICAL INSTRUMENTS

KADO after many rounds of meetings with the intellectuals, artists and

instrumentalists conceived the idea of starting a project. With initial funding

support from the Aga Khan Cultural Service Pakistan (AKCSP), this cultural

forum was formed and a musical instruments making workshop was opened to

revive the tradition, transfer skills to the youth and develop marketable

products. After the initial training, the project has started production since

January 11, 2001. The product ranges include ;rubab, sitar, dorya, dadang,

damal, surnay, tutek, gabi.

RUBAB

DADANG, SUNRAY, TUTEK, GABI, DAMAL

DORYA

SITAR



9

POVERTY REDUCTION & E-COMMERCE WITH KADO

KADO started an E-commerce project using the Pan Asia Networking (PAN) E-shopping Mall (7) for its

handicraft products through mail order system (MOS). In the year 2001, PAN also provided a small

research grant to develop a Web Page (Karakoramhunza cyber site) on the cultural and eco-tourism

potentials of the Karakoram region, which is in progress. The same year KADO in collaboration with

like-minded institutions organized a seminar on ‘ICT for Local Development’ in Hunza and fostered two

community-based Village Computer Literacy Centres, involved in training on software applications. At

present around 40 rural women, take benefit from this pilot exercise.

ON-LINE SHOPPING PROCESS

KADO uses following steps and processes in order to sell its products via e-commerce to reduce

poverty.

STEP 1 - SEARCHING (product)

STEP 2 - SHOPPING CART (add, delete, update)

STEP 3 - TERMS & CONDITIONS

STEP 4 - ORDER FORM (order & customer particular’s)

STEP 5 - PAYMENT - CREDIT CARD (VISA & MASTER CARD)

STEP 6 - PROCESS ORDER (sale, inventory, receivable)

STEP 7 - SUPPLY (goods, commission, payment)


10

STEP 1 - SEARCHING (PRODUCT)

She/he plans to buy three sharma that cost

US$ 15 each. The purchaser will click on on-

line shopping at thread net website

(www.threadnethunza.com) a similar screen

shown picture 1 will appear and the first

thing purchaser will do is search what she/he

is required in this case Sharma. The search

result will display all the available sharma

with its particulars and price the only thing

purchaser has to do is to select the product

and input the quantity required and press, add

to shopping cart. Picture 1

STEP 2 – SHOPPING CART (ADD, DELETE, UPDATE)

Shopping cart is one of the most important

part of on-line shopping using e-commerce

platform of B2B or B2C. In this case, she/he

has purchases from Thread Net –

Karakoram Area Development Organization

(KADO).

The shopping cart picture 2 shows the

she/he has purchased 3 items:

1 passport size @ $11.00 total $11.00

1 carpet – star @ $ 156.00 total $ 156.00

3 sharma @ $ 15.00 total $ 45.000

Options: update order, reset order, and

continue shopping Picture 2


11

STEP 3 – TERMS & CONDITIONS

Terms and Conditions is the third and most important step of on-line shopping, when a customer makes

purchases and uses check out option to order goods from Thread Net. She/he will have to agree with the

terms and conditions set by the IDRC PANAsia – Singapore.

STEP 4 – ORDER FORM (order & customer particular’s)

Order form is the most important part of on-line shopping when all the purchases made and customer

agrees with terms and conditions. An order form will appear on the screen with the list of all the products

purchased from Thread Net and customer particulars such as name, address, phone, delivery to bill and

other information related to customer and order.

STEP 5 – PAYMENT – CREDIT CARD (VISA & MASTER CARD)

Payment the fifth step of on-line shopping, using PANAsia, Singapore support, Thread Net allows the

customer to make payment using major credit card such as VISA and Master Cards.

STEP 6 – PROCESS ORDER (sale, inventory, receivable)

When customer makes the payment using the Visa or Master Card and payment clearance is made to

process order. Then sales are booked, the inventory is reduced and receivable of payment from Visa &

Master Card is booked for receivable.

STEP 7 – SUPPLY (goods, commission, payment)

Final step supply and delivery of goods to customer, commission to PANAsia and payment to KADO and

its stakeholders.


12

SUMMARY

E- commerce is a new means of trade, which is rapidly evolving, and providing impetus trade

development. The growth of e-commerce has great potential to expand markets, productivity and

competitiveness and therefore the Government, UN agencies and NGOs have a big challenge on how it

will increase revenue arising from e-transactions. On the other hand competitive edge is agriculture and

manufacturing sectors and priority concern is to enhance access to the Internet. The major challenges to

promote ICT include: -

§ Human resource development. § Compliance and enforcement especially in the informal sector. § Communications Infrastructure § Technical and institution capacity to monitor e-transaction. The government of Pakistan and Ministry of Science and Technology and UN organizations recognizes

the important role that e-commerce can play in development particularly poverty reduction. In this regard,

a National Task Force on e-commerce was established in 1999 with the mandate of enhancing the use of

e-commerce and with special focus on rural and mountainous areas. Some initiatives have been

strengthen Pakistan programs such as Internet access to major cities and towns, which supported by

Ministry of Science and Technology with public & private sector partnership. Through this programme,

Pakistan has been able to identify assets and liabilities and focus now is to translate the E-Trade &

Commerce Programme into a policy document for submission to the government.

PRIORITY ISSUES � Policies for facilitating e-trade and commerce � Telecommunication infrastructure/ Legal & regulatory framework. � Financial environment. � Human and Institutional capacity building. � E-commerce support network. In conclusion there is need to continue with the debate and further analytical work including impact

studies to get a clear picture of implications of E-Commerce on development for developing countries.

KADO is just on success story of Pakistan. Asif Kabani, MBA

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