Beyond Profits: FabIndia Entrepreneurial Model of Capitalism
Abstract
Fabindia is India's largest private platform for products that are made from traditional techniques, skills
and hand-based processes.Fabindia links over 55,000 craft based rural producers to modern urban
markets, thereby creating a base for skilled, sustainable rural employment, and preserving India's
traditional handicrafts in the process.Fabindia promotes inclusive capitalism, through its unique COC
(community owned companies) model. The COC model consists of companies, which act as value adding
intermediaries, between rural producers and Fabindia. These are owned, as the name suggests, by the
communities they operate from; a minimum 26% shareholding of these companies is that of craft
persons.Fabindia's products are natural, craft based, contemporary, and affordable. Fab India business
models is based on cooperative attitude towards its suppliers(artisans) and healthy HR practices. It has
established its own social standard in India and abroad.Fabindia clearly shows that its success as a major
player in the retail handloom sector in India is due to the fact that the company has always believed in "good
business practices and never compromised on best quality".This revolutionary organization is said to be the
next big thing in societal betterment .FabIndia believes that a delighted customer is their best Brand
ambassador .Their USP in marketing lies in quality of fabric and cultivated image of Indianans. They
heavily rely on word of mouth marketing. They say 83% of customers go satisfied and 59% go highly
satisfied. Fabindia which, over more than 50 years, has refined the art of sourcing from craftsmen:
middlemen are a strict no-no and artisans receive a share of the profits.Artisans form the backbone of India's
rural economy, and the handicraft industry is the second-largest employment generator in villages after
agriculture. While official estimates put the number of artisans in the country at about 70 lakh, unofficial
numbers peg it closer to two crore.
