Plan 9 — Pakistan’s largest Tech incubator is helping the startup with networking, mentorship, and understanding the different facets of their business.
Since its conception, Plan9 has incubated over 60 startups, according to reports. A project of the Punjab Information Technology Board, Plan9 was launched in August 2012 to give budding entrepreneurs the opportunity to turn their business dreams into a reality using technology as the key component.
Shahid and Akhtar having understood their best bet would be to open an online store which they could use to source orders, approached Plan9 for help.
Born and raised in Sialkot, Shahid and his partner Akhtar found a way to create a niche for themselves out of the existing sports goods supply chain in the Pakistani industrial hub famous for its exports of hand-made footballs specially.
“I was born and raised in Sialkot and know the industry very well,” says Shahid. “Many small manufacturers were unable to survive due to falling profit margins and greater mechanization in markets such as China. I wanted to help them realize their true potential.”
The official football for the 2014 FIFA World Cup, the Brazuca, was made exclusively by a manufacturer in the city. Some reports indicated that the city manufactured and exported over 42 million footballs just to meet global demand in the days leading up to the tournament. The German Bundesliga and French Ligue 1 have also used footballs manufactured in Sialkot.
Many international brands like Adidas, Nike, Puma, and Umbro have outsourced production to the city. Its annual export revenue is estimated at US$1.6 billion. However, it’s largely a sprawling cottage industry, with most workshops operating out of homes. This is because almost all products are hand-made, relying on the craftsmanship of local workers and using little in the way of machinery.
The industry is almost entirely export-oriented and is riddled with middlemen. Those middlemen, mostly in the Sialkot area, secure contracts directly from international clients, and then outsource production to the local artisans. In many cases, the contracts are spread over a number of different artisans, each fulfilling a particular part of the order. Remuneration for the workers is fixed, and does not involve any element of profit-sharing or variability with order sizes.
As a result, the tiny companies are not paid fair value for their goods, claim Danish Shahid and Junaid Akhtar, co-founders of the online store SportsKot. As workers and managers in these small enterprises are relatively isolated, they’re reliant on all those middlemen. Such intermediaries pay the workers a fraction of the true value of their products, taking advantage of their lack of information and inability to negotiate directly with brands or consumers.
After talking to potential suppliers in Sialkot and doing intensive market research, Shahid and Akhtar understood their best bet would be to open an online store which they could use to source orders. They were then accepted into Plan 9.
As they worked to build the startup and streamline operations, the founders realized Sialkot’s competitive advantage lay in its handmade products like footballs, cricket bats, and racquets. International buyers often declared them vastly superior to machine-made products sourced from competing markets. By eliminating extortionist middlemen, the startup’s founders were now able to pay cottage industry workers ten times more than what they were used to, thus sparking a mini-revival in the struggling industry. There’s also an element of profit-sharing, with workers encouraged to take ownership of their products and not compromise on quality standards. “If we benefit, they benefit,” adds Shahid.
Recently SportsKot was able to raise US$140,000 from an investor in the UK who was impressed with the products he had ordered from them. The money will be used mainly for marketing and expanding operations. “We’re overjoyed with having raised funding, as our cash reserves were almost finished,” says Akhtar.
The startup is not only trying to expand its international clientele. It believes there’s a strong untapped local market and has begun to introduce products that cater to this segment.
Original article appeared in TechinAsia.com