September 1, 2003 - The Business Review Albany: China RPCV Chris Pepe finds doing business with Artists Cooperatives in India has been an unpredictable roller-coaster ride with a sharp learning curve

Peace Corps Online: Directory: China: Peace Corps China : The Peace Corps in China: September 1, 2003 - The Business Review Albany: China RPCV Chris Pepe finds doing business with Artists Cooperatives in India has been an unpredictable roller-coaster ride with a sharp learning curve

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China RPCV Chris Pepe finds doing business with Artists Cooperatives in India has been an unpredictable roller-coaster ride with a sharp learning curve

China RPCV Chris Pepe finds doing business with Artists Cooperatives in India has been an unpredictable roller-coaster ride with a sharp learning curve

Doing business abroad has been an unpredictable roller-coaster ride with a sharp learning curve
JoAnne McFadden
For The Business Review

When Chris Pepe stepped off the airplane in Nagaland, India, the police were waiting for her. They took her to what was the best hotel in town (Chris got the room with the bathroom, jokes Pepe's business partner, John Wollner) and placed her under house arrest. Pepe was nervous. Nagaland had its own political problems related to a yearning for independence, and two sets of military--the Indian Army and the Nagalalese Army. This had the potential to be a really bad situation.

After three days, the police took her to the home of an important state government official.

"I had dinner and tea with this man who just wanted to talk about New York because he had been there once," Pepe said. After tea, he issued her the permit she was required to have to be in the region, and had someone drive her to her destination.

It's all in a day's work for Pepe. As president of Anokha, a company that imports unique handmade holiday ornaments, gifts and home accessories, Pepe makes trips to India to meet with the women who produce the goods that her company exports to the United States.

Pepe graduated from Syracuse University with a degree in religion. She then joined the Peace Corps and spent time in China. After a year working in the United States, Pepe began a master's program in South Asian Studies at Cornell University. As part of her graduate work, Pepe lived with a family in Rajasthan while she researched Hindu-Muslim strife. She also developed a deep fascination with, and appreciation for, India's artists and their unique work.

On a vacation to London during her time abroad, Pepe had a chance meeting with an old friend, John Wollner. The two began to talk about Pepe's employment options when she finished Cornell in another year. Proficient in Hindi, working for the U.S. government was an obvious choice, one that many of her academic colleagues would pursue. That wasn't what Pepe wanted to do, but she hadn't any other ideas.

"Chris was kind of stuck," Wollner said. But to Wollner, a Rensselaer Polytechnic Institute graduate who had started his own firm, ToData Computer Services in 1987, the answer was obvious. In a coffee shop in Chelsea, the two hatched the business plan for Anokha, which means "unique" in Hindi. Pepe would seek out artists, develop business relationships with them, and import the most unique, high-quality, handmade crafts to be sold in high-end markets like museum gift shops, Barneys New York and Fred Segal in Los Angeles. Pepe could take the work of the Indian artists she valued so much and find a worthy world market for the goods.

Doing business abroad has been a roller-coaster ride in many ways, and there has been a significant learning curve for the pair in the three years since they started the company. Issues like currency fluctuations, which one might think would be a major concern, didn't turn out to be.

Wollner said the currency exchange rate ends up mattering very little because the company pays more to ship and market a product than it pays to have it made.

The challenges come in production in a foreign country. Pepe's style of scouting out potential artists is a sensitive and delicate process. Most of the products are made at home by women, in between raising children and working in the fields or whatever other job they have. Anokha's orders provide supplemental income.

The artist cooperatives that Pepe finds are small groups.

"A lot of the creativity comes from the smaller producers," Wollner said.

The quality of product is better from smaller cooperatives, Pepe said.

"They're more interested in working with you," she said.

Pepe stays away from the producers in Delhi and other big cities. Pepe's language skills allow her to seek out smaller cooperatives, because in some places, no English is spoken. Anokha works with 11 different cooperatives and individuals. Wollner said that without Pepe's language skills, they wouldn't be able transact business with about seven of them.

"The language ability allows us access to more diversified products," Pepe said.

But more important than knowledge of the language is knowledge of the culture. Pepe gets to know the artists with whom she deals, surveys the facilities in which they work, makes sure the working conditions are good and that no children are working.

Pepe knows the ins and outs of the system, too, which has gotten her out of some dangerous situations. On a trip in February 2002, Pepe was traveling on business with two Muslim friends to Bhuj, a city in the northern province of Gujarat.
Two days later, the city of Bhuj basically went up in flames," Pepe said.

She and her colleagues had to take a flight to Bombay, the opposite direction from where they wanted to go, and then proceed from there. The ordeal pointed out one of the hazards of doing business overseas. Usually, Pepe's travel expenses amount to only $100 to $150 per week, but that trip ended up costing a couple of thousand dollars.

"There is a lot of unpredictability there," Wollner said.

There is unpredictability elsewhere, too. For example, workers at the docks in Bombay went on strike, and Anokha's shipment was delayed three weeks. One box containing 96 items was stolen. Anokha spends about $3,000 per year on insurance, product liability and loss of product.

"Our inventory is very valuable because a lot of it is sold," Wollner said. "If you lose something that you've already sold before you deliver it, that's the big risk."

Pepe said she never knows what's going to happen.

"A lot of it you just have to cross your fingers and hope that it works out right because it's very unpredictable," she said.

Quality control is another concern. During peak production times, Anokha has people who check in with producers every two weeks to make sure everything is going OK and is on schedule.

"You realize just how fragile all these cooperatives are," Pepe said, citing the dust storms, earthquakes and riots that India experiences. "Just keeping things clean is a problem for people who produce in the desert."

Quality and uniqueness are at the top of Anokha's list. Products and designs change from year to year to keep inventory fresh and appealing to stores looking for the latest and most fashionable items.

When Wollner happened to walk into a store full of knock-off mirror-ball products that were inferior to the ones made by Anokha's producers, one of his company's strengths became crystal clear.

"That's when we realized that a big part of our competitive advantage is our ability to design and produce new things," Wollner said.

Financing is another challenge. After the terrorist attacks of Sept. 11, 2001, some banks were wary of doing business with a company, especially a fledgling one, that imports from overseas. A bank referred Anokha to the Albany-based Capital District Community Loan Fund, a nonprofit that pools money from socially concerned investors and makes loans and grants to nonprofit organizations and microentrepreneurs. In late 2001, the fund provided Anokha with a $15,000 line of credit, which recently was increased to $25,000.

The loan fund has been impressed with the well-thought-out growth and financial management of the company, said Bob Radliff, its executive director.

"We tend to concentrate on local needs, but Anokha provides us with a unique opportunity to meet both local needs and to extend our reach globally," Radliff said.

Anokha's products are now in more than 500 stores, and Pepe is thinking of expanding to Indonesia and perhaps China is another few years. On their way to being seasoned veterans in the import-export arena, Wollner and Pepe are able to laugh at some of the challenges they first encountered when they began doing business abroad.

"We kind of take them in stride at this point," Wollner said.

"I needed some favors, so I went to shake hands and have tea with various people the first day I was there," she said. When rioting broke out in the city, Pepe and her colleagues returned to their hotel. "It ended up being where, slowly but surely, the staff began to abandon their jobs and go home," she said. It was an extremely volatile situation.

The people Pepe had tea with knew she was there and came to pick her and her colleagues up and take them to the airport. On their way out of town, a "flag march," the last step police take to warn people to stop rioting before the government sends in the army, was on its way into town.

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Story Source: The Business Review Albany

This story has been posted in the following forums: : Headlines; COS - China; Business; International Business; Cooperatives; COS - India



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