UN Conference Paper Poverty Reduction and E-Commerce

Address: Mobile: +0303 6226110Asif Kabani , MBA No. G-2, Plot 255/1/17 Noorani Sagar, Ruby Street Phone +92-21 7211968 (R) Office 7216330, 7210850Project Manager, Mapping - AKDN Garden West, Nisther Road Fax +92-21 7227210 Karachi-74400, PAKISTAN Email kabani@yahoo.comAga Khan Development Network, Pakistan POVERTY REDUCTION & E-COMMERCE 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.COMTable of ContentOVERVIEW – KADO (E-COMMERCE & POVERTY REDUCTION) 1 KARAKORAM AREA DEVELOPMENT ORGANIZATION (KADO) 1 Thread Net Hunza 2 Poverty Reduction through use of ICT & E-commerce 3VILLAGE COMPUTER LITERACY CENTERS 3KARAKORAMHUNZA CYBER SITE 3E-COMMERCE 4PRODUCT - EMBROIDERY WORK 4PRODUCT - SHARMA OR PALOOS 5PRODUCT - CARPETS 6PRODUCT - FABRICS 7PRODUCT – MUSICAL INSTRUMENTS 8POVERTY REDUCTION & E-COMMERCE WITH KADO 9ON-LINE SHOPPING PROCESS 9STEP 1 - SEARCHING (PRODUCT) 10STEP 2 – SHOPPING CART (ADD, DELETE, UPDATE) 10STEP 3 – TERMS & CONDITIONS 11STEP 4 – ORDER FORM (order & customer particular’s) 11STEP 5 – PAYMENT – CREDIT CARD (VISA & MASTER CARD) 11STEP 6 – PROCESS ORDER (sale, inventory, receivable) 11STEP 7 – SUPPLY (goods, commission, payment) 11SUMMARY 12

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMOVERVIEW – KADO (E-COMMERCE & POVERTY REDUCTION)KARAKORAM AREA DEVELOPMENT ORGANIZATION (KADO)KADO is a community-driven local intermediary organization working to promote sustainabledevelopment in mountain areas in northern Pakistan starting activities in Hunza valley. KADO promotesculture-sensitive and environmentally sustainable micro-enterprises creating village-based income andemployment opportunities for artisans, small producers, women, the disabled members of the communityand other disadvantaged groups. It is also involved in environmental awareness raising and solid wastemanagement, promotion of arts and cultural activities and have recently involved in promoting theknowledge 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 guaranteeand 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 1

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMAs a crosscutting theme, KADO is also involved in Human Resource Development, InstitutionalDevelopment, capacity building and promotion ofCBO/LDO Networks, Gender and Development andaddresses human rights issues relating to disadvantagedgroups. 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 SpanishEmbassy also provided one-time small grant to the rehabilitation center for disabled persons. At presentaround 2300 women artisans’ work for the projects from their homes. Another 60 women work at sevenworkshops daily and produce finished products. The products are marketed under the brand name ofThread Net Hunza through retail partnerships with around 18 local and national retailers. Tourists are theprime market for these products. Local and national exhibitions are held to promote these products.Thread Net HunzaUnique and beautiful products are made with affection and the highest of quality standards by the famousartisans of this area. The range of Genuine Hunza handcrafted goods isbreathtaking in its diversity. KHDP projects offer unique quality embroidery,wooden musical instruments, fabrics, Sharmas and carpets. Adapting traditionalmotifs and designs, the Karakoram Handicraft Development Programmeattempts to transform local handicrafts into globally marketable products.The project provides Product Design, Training and Marketing services and isinvolved in trading between the producers, artisans and retailers. The project was initially started as atripartite Action Research project between Karakoram Area Development Organization (KADO), the AgaKhan Cultural Service Pakistan (AKCSP) and the Swiss Agency for Development Cooperation (SDC) in1996. KHDP is now being run independently by KADO with continued technical and financial supportfrom SDC. 2

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPoverty Reduction through use of ICT & E-commerceTo take advantage of the growing opportunities offered by the information and communicationsrevolution, KADO has embarked upon a vision to effectively and creatively use ICT for localdevelopment in this physically and economically isolated and marginalized mountainous region. Despiteits marginality, the Karakoram region offers rich content in the form of biologically and culturally diversehabitat 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; andii) 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 CENTERSKADO has recently supported two village literacy centers in Hunza. These centers provide training torural women in software applications. These centers are being run on cost-recovery basis in partnershipwith local communities. The future vision is to develop 10 such centers in Hunza and promote thesecenters as local hubs for E-villages. KARAKORAMHUNZA CYBER SITEKADO 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 internetbased ICT project in the Northern Areas, which will promote eco-and cultural tourism potentials, shareindigenous community experience and research into the ICT and internet applications in the ruralmountainous areas of Pakistan. 3

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COM E-COMMERCETo reduce poverty KHDP and KADO has taken handicraft e-commerce initiative in collaboration withIDRC PanAsia networking to promote local products made by women and disabled artisans. Theseproducts are than sold through the B2C (Business to Consumer) model of e-commerce. For on-lineshopping, please visit our e-commerce site at www.threadnethunza.comPRODUCT - EMBROIDERY WORKEmbroidery work is a household hunar (skill) and serves asa safe haven for all types of creativity and self-expression.Hunza women have been trained in embroidery techniquesat home for generations. Every woman must learn acommon 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 cultureand 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 aretransforming traditional handicraft items into practical accessories for modern times withoutcompromising the beauty of indigenous motifs and designs. Embroidery provides additional income forthousands of women, which in turn helps to raise the standard of living in rural areas where most incomegenerating activities are seasonal. See more products on www.threadnethunza.com Pencil Case Large Gents Glasses Case Embroidery on Top, Zip Closure, Front side full Hanging Strip on embroidery., foam one end, Fabric stuffed, shoulder Cotton string 53" and fabric cotton 4

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPRODUCT - SHARMA OR PALOOSSharma or Paloos, is a traditional floor covering made ofYak or Goat hair. It is popular for its durability, roughnessand high insulation against cold and heat alike. The Projecthas involved Special Persons in various processes of thiscraft. This work therapy helps them rehabilitate, integrate inthe society and earn income in a dignified manner, henceameliorating the human rights situation for thisdisadvantaged group. Chashm-e-bulbul Mangol Size: Size: Max:10 x 15 Max:10 x 15 Min:2 x 2 Min:2 x 2 Feature: Feature: Goat hair/Yak hair Goat hair/Yak hair Color: Color: Black, White, Brown Black, White, Brown Plain Sharma Plain Sharma Size: Size: Max:10 x 15 Max:10 x 15 Min:2 x 2 Min:2 x 2 Feature: Feature: Goat hair/Yak hair Goat hair/Yak hair Color: Color: Black, White, Brown Black, White, BrownSee more products on www.threadnethunza.com 5

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPRODUCT - CARPETSThe Carpet/Sumac projects supported by KHDP at Gulmitand at Hunza Carpets (Ltd) initiated by a localentrepreneurs who received technical and credit supportfrom the Aga Khan Rural Support Programme (AKRSP)during the start-up phase, are instrumental in bridging thesupply-side gaps and promoting and developing localcarpets. Around 200 women have been trained andinvolved in production. The project guarantees that thewomen contracted work under good conditions and arepaid fair wages for the work they produce. Although theskill of carpet weaving is not a historic Hunza one, thecarpets skill have traditional and unique element to them.Their uniqueness lies in the fact that designs and motifsused are taken from traditional Hunza embroidery patternsand only vegetable dyes and good quality local wool areused in the manufacturing these products. Hunza Star Hirimun Design Size: Size: Max: 7 sqft Max: 7 sqft Min: 1 sqft Min: 1 sqft Feature: Feature: Silk emb. with Soumak, wool on vegetable dyes, silk cotton vegetable embroidery on cotton dyes, approx. 150- cloth with cross 160 nodes per square stitch, approx. 400 inch. stitches per square inch.See more products on www.threadnethunza.com 6

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPRODUCT - FABRICSGanish is the first settlement of Hunza founded nearly 1000years ago. Situated on a junction of the old silk route, withsacred rock inscriptions near Haldenkish, pilgrims fromChina destined for the ancient center of Ghandharacivilization at Texila and Buddhist monks traveling toChina and Central Asia used this land route for centuries.Ganish Fabric weaving Center builds on the traditionalhistoric built heritage, the hardworking and determinednature of its settlers especially women and the growingopportunities offered by the nascent tourism sector inHunza. Product ranges include; woolen shawls, cotton andwoolen fabrics, scarf, tablemates and durries. Table Mates Blinds Product is available Blind is made with in different sizes and cotton and acrylic colors made out of thread. straw is also cotton and acrylic used as a warp. this thread. These product product is used as a are used as show window blind and pieces and could be wall hag. sizes can used as a functional vary from 18*30 products too. For a inches to 34*60 finer look, tassels are inches made on two ends.See more products on www.threadnethunza.com 7

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPRODUCT – MUSICAL INSTRUMENTSKADO after many rounds of meetings with the intellectuals, artists andinstrumentalists conceived the idea of starting a project. With initial fundingsupport from the Aga Khan Cultural Service Pakistan (AKCSP), this culturalforum was formed and a musical instruments making workshop was opened torevive the tradition, transfer skills to the youth and develop marketableproducts. After the initial training, the project has started production sinceJanuary 11, 2001. The product ranges include ;rubab, sitar, dorya, dadang,damal, surnay, tutek, gabi.RUBAB DORYADADANG, SUNRAY, TUTEK, GABI, DAMAL SITAR See more products on www.threadnethunza.com 8

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMPOVERTY REDUCTION & E-COMMERCE WITH KADOKADO started an E-commerce project using the Pan Asia Networking (PAN) E-shopping Mall (7) for itshandicraft products through mail order system (MOS). In the year 2001, PAN also provided a smallresearch grant to develop a Web Page (Karakoramhunza cyber site) on the cultural and eco-tourismpotentials of the Karakoram region, which is in progress. The same year KADO in collaboration withlike-minded institutions organized a seminar on ‘ICT for Local Development’ in Hunza and fostered twocommunity-based Village Computer Literacy Centres, involved in training on software applications. Atpresent around 40 rural women, take benefit from this pilot exercise.ON-LINE SHOPPING PROCESSKADO uses following steps and processes in order to sell its products via e-commerce to reducepoverty.STEP 1 - SEARCHING (product)STEP 2 - SHOPPING CART (add, delete, update)STEP 3 - TERMS & CONDITIONSSTEP 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) 9

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMSTEP 1 - SEARCHING (PRODUCT)She/he plans to buy three sharma that costUS$ 15 each. The purchaser will click on on-line shopping at thread net website(www.threadnethunza.com) a similar screenshown picture 1 will appear and the firstthing purchaser will do is search what she/heis required in this case Sharma. The searchresult will display all the available sharmawith its particulars and price the only thingpurchaser has to do is to select the productand input the quantity required and press, add Picture 1to shopping cart.STEP 2 – SHOPPING CART (ADD, DELETE, UPDATE)Shopping cart is one of the most importantpart of on-line shopping using e-commerceplatform of B2B or B2C. In this case, she/hehas purchases from Thread Net –Karakoram Area Development Organization(KADO).The shopping cart picture 2 shows theshe/he has purchased 3 items:1 passport size @ $11.00 total $11.001 carpet – star @ $ 156.00 total $ 156.003 sharma @ $ 15.00 total $ 45.000Options: update order, reset order, and Picture 2continue shopping 10

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMSTEP 3 – TERMS & CONDITIONSTerms and Conditions is the third and most important step of on-line shopping, when a customer makespurchases and uses check out option to order goods from Thread Net. She/he will have to agree with theterms 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 customeragrees with terms and conditions. An order form will appear on the screen with the list of all the productspurchased from Thread Net and customer particulars such as name, address, phone, delivery to bill andother 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 thecustomer 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 toprocess 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 andits stakeholders. 11

ON-LINE SHOPPING – CLICK NOW! WWW.THREADNETHUNZA.COMSUMMARYE- commerce is a new means of trade, which is rapidly evolving, and providing impetus tradedevelopment. The growth of e-commerce has great potential to expand markets, productivity andcompetitiveness and therefore the Government, UN agencies and NGOs have a big challenge on how itwill increase revenue arising from e-transactions. On the other hand competitive edge is agriculture andmanufacturing sectors and priority concern is to enhance access to the Internet. The major challenges topromote 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 recognizesthe 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 ofe-commerce and with special focus on rural and mountainous areas. Some initiatives have beenstrengthen Pakistan programs such as Internet access to major cities and towns, which supported byMinistry 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 impactstudies 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 12

UN Conference Paper Poverty Reduction and E-Commerce

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