A U.K. business that is wholly reliant on village craftsmen in Jaipur, India might, at first glance, look like a precarious model. But Artisan Furniture has made a feature of it and, throughout the pandemic, the company has proved resilient, racking up double-digit growth and now on an expansion path, helped by Goldman Sachs
Artisan Furniture’s linear international supply chain was conceived—since its founding by CEO Amit Basu in 1995—with the intention of supporting an ecosystem of hundreds of skilled furniture makers in Jaipur in Rajasthan state, and in the city’s surrounding areas.
The idea has also ensured that products being marketed today to retail partners such as TKMaxx, the European subsidiary of apparel and home goods groupTJX Companies; Spain’s leading department store group El Corte Inglès; and Wayfair
Back then, Basu’s fledgling furniture import/exports business was launched with $600 of scholarship money and managed from a garage in Jaipur. His big break came when he decided to concentrate on pine, considered exotic in India because it was not easily available. He fused imported New Zealand pine with India’s ‘jali’ style to make furniture with a European look and it made him a millionaire before he was 30.
Since then, Basu has stuck to his guns in ensuring that Artisan Furniture has maintained his early vision of retaining and enhancing the craft skills found in the north west of India. When the global financial crisis kicked off with the collapse of Lehman Bothers, Artisan Furniture saw spending on lifestyle furniture collapse.
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“We had two choices,” Basu told Forbes.com. “Either automate and shift from skilled craftsmen to machine-churned products or continue with the existing model and drive sales forward to survive.” The company forged ahead on the latter course, and also took advantage of the then prime minister David Cameron’s initiative to cherry pick entrepreneurs from around the world for special visas to Britain.
Shortly afterwards in 2010, Artisan Furniture was incorporated in the U.K., through Global Vision Direct Limited, a move that helped save the company. In turn it has ensured the long-term prosperity for several villages around Jaipur—which was made a UNESCO world heritage site in 2019—and where more than 350 artisans form part of the furniture company’s supply chain. According to Basu, several of them have made the equivalent of £100,000 or more in the process.
A marketplace platform for craft furniture
The novel business platform developed by Basu flourished after those tough years and Artisan Furniture saw some high growth as business improved. The CEO says that the company is currently achieving 40% growth year-on-year and by March 2022 he expects to hit £7.5 million ($10.1 million). Looking ahead to 2023 the entrepreneur is predicting that the business will break the £10 million ($13.5 million) barrier despite the supply chain troubles than have affected so many sectors.
Basu has bigger long-term ambitions. Having fully digitized the business in 2016 and created three verticals—wholesale furniture, trade furniture and dropship furniture to cater to large, medium and small retail/consumer clients respectively—Artisan Furniture plans to convert its existing e-commerce entity into a marketplace platform to encompass more craft products, and use artificial intelligence and machine learning to do it.
“We aim to add accessories to our portfolio by offering a holistic home living experience thereby covering Indian artisans from rural locations such as Moradabad (known for brass making), Firozabad (a center for glass production), throws from Panipat, wooden artifacts from Saharanpur, Bhadohi carpets, cabinet accessories from Aligarh, and of course furniture from Jaipur,” said Basu.
Mentoring via 10KSB UK
These moves are a big strategic challenge so Artisan Furniture made the decision to seek help—and got it. Goldman Sachs was impressed enough by the company’s recent growth and future plans to take it on, this month, as part of its 10,000 Small Businesses UK (10KSB UK) program for 2022. The scheme which has an intake of about 140 companies each year helps entrepreneurs create jobs and economic opportunity by providing access to education and business support from renowned institutions like the University of Oxford’s Saïd Business School.
According to the investment bank, 99% of all U.K. employer firms are small businesses and they are nimble growth engines for the economy, particularly when having to pivot during a crisis like a pandemic. The 10KSB UK program specifically targets firms with a track record of fast growth. The bank said: “This subset has a disproportionately strong economic impact relative to its size. This community is instrumental in solving the skills crisis, accelerating digitalization, and embracing sustainability.”
Growing consumer awareness about the environment and corporate social responsibility has been to the advantage of Artisan Furniture. Its model of supporting local craftspeople and keeping artisan skills alive has helped to fuel demand for the company’s products which come from sustainable, commercially planted woods like mango and sheesham (rosewood) and all responsible-forestry certified.
During the pandemic, the big shift for furniture was to online, driven by giants such as Amazon and IKEA, the world’s biggest home furnishing retailer. The Swedish company—which is looking at some new retail ideas—saw revenue fall to €39.6 billion in FY2020 due to the pandemic, after two decades of growth. But in FY2021 IKEA’s sales bounced back to €41.9 billion—sightly above FY2019—with e-commerce making strong headway, up 73%.
With so many more shoppers and supply partners getting used to buying furniture online, Basu’s idea of creating a niche online marketplace for artisan-only products could be perfect timing. According to Statista’s Consumer Market Outlook, revenue from the global furniture industry hit $1.3 trillion in 2020 and will rise consistently to reach $1.6 trillion dollars by 2025. Growth in the US—where Artisan Furniture has an outpost in New Jersey and is still testing the market—is also expected to be strong at 20.8% annually to reach about $145 billion by 2026. The projections could not get much better.