Setting up a start-up in Kashmir is no cakewalk; you can’t overlook the socio-political and economic crisis in the state. But Muheet Mehraj, Co-founder & CEO of KashmirBox.com, is special. In an interaction with The Dollar Business, Mehraj shares his excitement about being able to export in every direction – Europe, USA Canada, Israel, Singapore, Puerto Rico, New Zealand, etc.
Interview By Vanita Peter D’souza | May 2016 Issue | The Dollar Business
TDB: Tell us about Kashmir Box. How has your journey been so far?
Muheet Mehraj (MM): Kashmir Box started five years ago. It is an e-commerce platform that essentially gives Kashmiri producers and artisans access to global markets. The platform features a logistics tie-up and a payment tie-up to source products from Kashmir and then sell globally. But this isn’t the only plan; we want to slowly build an ecosystem around this platform where we have a royalty model which helps us create social impact at the grass-roots level and give producers and artisans from Kashmir multiple channels to sell. Once sellers go live with Kashmir Box we also put them live with Craftsvilla, Flipkart, Amazon, etc. Apart from that there are small boutiques and brands that are working with Kashmir Box to get access to artisans and this makes product development possible. We want to connect these artisans to designers because we want them to understand the market and help them build a global brand. They have to understand what quality control is and what benchmarks are.
Social impact is one of our goals because the remuneration what artisans are receiving currently is not even enough for their survival. We intend to recreate a royalty model and the work for it has already started in the backend. Our journey so far has been pretty good.
TDB: Where did the idea come from?
MM: My co-founder and I were researching on Kashmiri art and craft. During our research, we saw Kashmir is the only place in the world that has its stores spread globally, by its indigenous names, in cities like Manhattan, New York, Dubai, etc. And we didn’t see this happening with any other place or state in India. So there was this big brand which already existed but artisans were unable to leverage its true potential. Although the market size is Rs.34,000 crores for the products that come from this geography yet artisans were paid peanuts. Some of the artisans we met were paid about Rs.80-85 per day but if the same artisan would go out and work as a labourer, he would earn about Rs.300-350 per day. Look at the difference; an artisan in US receives a lot of recognition, while in the Kashmir Valley the artisan’s situation is so bad that even his children don’t want to disclose that they come from a family of artisans. It is almost a social stigma.
The other major issue is that a lot of fake products are sold in the name of Kashmir. For example, chances are that Pashmina sold in a Delhi market might be a fake. The same goes with Kashmiri walnuts. Similarly, a lot of retailers sell Kashmiri apples which in reality are low grade apples from China or US. We want to eradicate counterfeits and win original Kashmiri products recognition.
Next is obviously the financing part. Today an artisan has to take a loan at an interest rate of 17-18% to develop and produce. And the only option he has is to sell the product through an intermediary, who adds no or little value and takes away most of the profits. This is a vicious cycle. When we spoke to the artisans, they just said they don’t want their kids to follow the same profession, and that is a threat to the Kashmiri economy.
On the consumer end, if you look at where these products sell you will find them mostly in five star hotels, malls and in organised retail. But all these products have their origin in the unorganised sector. To bridge this gap, we started building a solution based on e-commerce and Kashmir Box was born.
Kashmir Already Exists As A Brand But Artisans Have Not Been Able To Leverage It
TDB: Setting up an e-commerce company requires heavy capital. How did you manage your investments?
MM: We are about to raise an angel round investment and we will be the first ones to get it in the valley. We do not think we need more investment right now but the whole idea of raising this investment is to build a warehouse facility in Srinagar, which will help us process more orders and we want to move some operations from Srinagar to Delhi. We have plans to come up with contemporary lines – till now we have never seen a spring/summer or autumn/fall collection from Kashmir. We want to start that. These are the areas where we will invest.
TDB: Brief us about the product lines that you offer via KashmirBox.com?
MM: We have the world’s largest collection of Kashmiri products online. Almost every category you can think of, we have it on KashmirBox.com – be it herbs, spices, copperware, papier-mache, walnut wood, Pashmina, rugs, carpets, essential oils, soaps or processed foods like Wazwan and Kehwa, you will find them all on our website.
TDB: Which major countries do you ship your products to? How much does the overseas sales contribute to Kashmir Box’s revenue?
MM: There is good demand for papier-mache in US and Australia. For Kaftans the demand is from Middle East and Europe, and for Pashmina we have seen very good traction in India and Europe. We also ship to Canada, Israel, Pakistan, South Korea, Singapore, Puerto Rico and New Zealand. About 20-25% of our revenues come from overseas markets.
TDB: What kind of problems do you face when it comes to shipping your products, especially to overseas customers?
MM: Sometimes at Delhi airport, the authorities open the shipment for security purpose but when they put it back, they do not take care to repack it well and the shipments tend to get damaged. Moreover they use instruments like cutters and scissor which also cause damage.
TDB: What kind of intervention would you like to see from the government to promote the industry in Kashmir?
MM: I have been in touch with the new Chief Minister Mehbooba Mufti for some time now. The state of industry in Kashmir is not good with many units closing due to losses. We are pitching her an idea to create an ecosystem which will help Kashmiri artisans and have the Kashmir government as one of the stakeholders. I believe this could be a great opportunity to revive the industry.
TDB: How difficult is it to nurture a start up in a place like Kashmir?
MM: For me, the best of solutions come from the worst of places. I have a few statistics to share – it is estimated that around 14 lakh students in Jammu & Kashmir would be unemployed in the next four years. It is also estimated that the government would be able to hire only 14 thousand of them and another lakh will be hired by the private sector. What would you do with the rest? This can lead to a crisis! On hand, a lot of startups are coming up and there is co-working space that is going to come up in the valley. If we get a good ecosystem for entrepreneurs and some success stories, we are capable of being the next Silicon Valley.
TDB: What is your take on the Startup India programme?
MM: Startup India is a good start. We were the only company from Kashmir to be invited to that event and I did go through all the points that were discussed and believe there is going to be ease of doing business. The first job of the government to create a startup ecosystem is to actually stay away and just be a facilitator and let the baboocracy or bureaucracy take a seat back.
TDB: What is your long-term vision for Kashmir Box?
MM: Our long-term vision is to take the platform beyond Kashmir. We want to create a pan India presence. We plan to replicate our success story not just in Indian states but also in countries like Cambodia and Bangladesh.