Teaching case. This case is a composite based on typical Nepali businesses. Names are withheld and the figures are illustrative, chosen to make the calculations realistic.

Overview

A Patan-based artisan collective selling wood and metal crafts relied on tourist footfall and export middlemen. COVID-19 collapsed in‑person demand, prompting a pivot to global marketplaces—beginning with Etsy. This move demonstrates why e‑commerce matters, how its unique features create value, and which e‑commerce types fit handmade goods.

Background

The collective of about 25 artisans made wooden masks, singing bowls, and metal statues. Most sales were to tourists in Patan Durbar Square and to export agents who bought in bulk at low prices and resold abroad. When tourism stopped, income fell to almost nothing. A younger member who had studied IT suggested selling directly to foreign customers online. The collective had no foreign payment account and no experience with international shipping, which is why a global marketplace was more attractive than its own website.

Key Moves

  • Selected a marketplace (Etsy) vs. standalone site to leverage built‑in discovery, trust systems, and payments.
  • Created SEO‑friendly product listings (titles, tags, attributes) and storytelling photography.
  • Implemented cross‑border logistics using prepaid labels, HS codes, and delivery estimates.
  • Standardized SKUs and packaging to reduce damages and returns.
  • Adopted omnichannel presence (Instagram → Etsy DM → checkout) for social proof and demand generation.

Outcomes

  • 60% revenue recovery within 3 months; diversified demand beyond tourism.
  • Higher margins vs. export middlemen; better cashflow via platform payments.
  • Customer data enabled repeat purchasing and product iteration.

Why this works (Unit 1 lens)

  • Unique e‑commerce features at play: global reach, universal standards, information density (rich listings), social technology (reviews), and personalization (recommendations).
  • E‑commerce types involved: C2C/peer‑to‑peer marketplace behavior (individual shops) with B2C characteristics for international buyers.

Challenges

  • Cross‑border compliance (customs, returns) and counterfeit risks.
  • Production capacity variability and lead‑times for handmade SKUs.

Lessons

  • Marketplaces compress go‑to‑market time for small producers.
  • Product page quality (copy + photos) is the highest ROI lever.
  • Packaging, shipping, and policies are part of the product.

The Numbers

  • Export agent price for a singing bowl: Rs. 2,500; Etsy retail price: USD 65 (about Rs. 8,600).
  • Marketplace and payment fees: roughly 10% of the sale; shipping charged to the buyer.
  • Net per bowl after fees: about Rs. 7,700, roughly three times the agent price.
  • But each online sale needs photos, a listing, a reply to questions, and careful packing: about 45 minutes of extra work.

Case Questions

  1. Explain how global reach, universal standards, and information density helped the collective. Use examples from the case.
  2. Compare selling through Etsy with building the collective’s own website. Which would you recommend in the first year, and why?
  3. Using the figures, explain why the collective earns more per item online but may sell fewer items. What other costs should it count?
  4. What risks does dependence on one foreign marketplace create?
  5. Which type (or types) of e-commerce does this case represent?

Chapters covered

Use the unit notes below to review the theory this case applies in practice.