Craftsmen of the old chikan variety are facing hard times due to increased competition and lower profit margins.
Although the demand for chikan products has increased manifold, a large number of first-time chikan traders have joined the low profit margins bandwagon.
“With new entrants in the chikan industry each day, we are facing tough competition. The increased number of players has lowered our profit margins,” said Zeeshan, a chikan supplier based in Chowk, Lucknow.
Chowk is the main market of the chikan embroidered garments and dress material. The area alone features more than 200 shops.
Another shop keeper of the area added, “The market is flooding with new manufacturers, which are not well versed with the kind of embroidery and quality chikan requires. However, their presence is hampering our business immensely.”
He further informed that earlier an investment of Rs 5 lakhs was enough to start a manufacturing unit of chikan. But with the increased prices of raw materials, the investment requires at least Rs 20 lakhs.
“The manufacturers thus cut on quality. They make products of similar designs and pattern by compromising the quality. This is adversely affecting our business as most of the customers are not able to identify between a real and fake product,” Gulfam of Ajanta Chikan Art said.
Gulfam further informed that loss of bargaining power had compelled him to sell products in bulk to big showrooms. However, the showroom price is much higher as to what these sole suppliers ask for.
“The big showrooms gain on as their presentation of the same product that we also supply is much better and attractive for the customers. This adds on to its cost. Though we are able to sell big quantities to these showrooms, the profit margins are reduced to almost half,” he added.
Having a closer look as to why these small manufacturers are not able to get a proper price for their product, Mansoor Nadeem Lari, an exporter and manufacturer of chikan products based at Lucknow said, “The most important thing is product positioning. There is no doubt that the chikan products are in great demand overseas, the main point is that foreigners look for only quality product and its uniqueness.”
“The number of suppliers has taken over the demand. In such a case only those can sustain who supply quality par excellence,” he added.
The chikan industry employs about 4 lakhs people directly and indirectly into the trade. The work is mostly done by women, who give about 7-8 hours daily in the embroidery.
The wages thus earned by them vary from Rs 100 up to Rs 800 per day depending upon the amount of labour and embroidery given per piece.
