Mass Customization – Myth vs. Facts

During my first year of business school, I had read an exciting case study about Timbuk2 and how they created a build-to-order business model.  The build-to-order model, aka Dell.com, has clear cost advantages.  Why produce massive quantities of inventory that may go unsold if you can wait to build product until you receive a customer order? In summer of 2010, I worked for Dave Sloan, the founder and CEO of Treehouse Logic, a startup that provides a visual customization platform that enables mass customization. My exposure to the exploding mass customization market has revealed a few key insights that I would like share with readers of our blog.

Myth: Mass Customization is a fad.

Fact: The US alone has some 220 online customizer firms. In the past decade shoppers could configure their own laptop at Dell.com or Apple.com but in 2010 you can create your own bags, t-shirts, jeans, shoes, shorts, bikes, lamps, cards, art books, jewelry, granola, chocolates and pet food as well. The New York Times reported on growth in sales of customized products in US for 2009. In 2009, orders at Spreadshirt had doubled. Blurp (customize your art book or photos) sales were up 43%. Zazzle, Cafepress and Scrapblog each reported 80% increases in sales in the holiday season compared with previous year’s sales. At Blue Nile, orders were up 20%. This was despite the fact that ecommerce sales had only grown by 4% in the season. In March 2010, readwriteweb.com suggested that the U.S. may be on the verge of a co-creation invasion from Europe, where these kinds of startups are more prominent. Looks like co-creation is here to stay.

The reasons that this trend is no fad are highlighted in our VentureBeat article, but in a nutshell it is the alignment of growing customer demand, maturing technologies, and Internet penetration.

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Ever wondered who those kids at Delhi stoplights are?

 

On a busy and sweaty Saturday afternoon, I tried refreshment. I happened to be in Hauz Khas and was approached by two children selling fruits. I had always wondered who these kids were and why were they here instead of being at a school. I decided to find the answer.

Here goes my on-the-fly report.

Government of India has taken corrective measures and declared Child Labour as illegal. When I asked Dinanath Yadav whether he was aware of the same, the stark reply came as, “the Government does lots of things, how many do you see getting implemented?” He is the so-called ‘caretaker’ of all the street children whom I interviewed and to whom all the children report to. During my short duration of 2 hours, I interviewed odd 21 children selling books, magazines and toys to people whose vehicles stopped at the red-light. Here is some demographic data from the interviews:

  • Age >15 yrs: 4 kids
  • Age 11-15 yrs: 12 kids
  • Age 7-10 yrs: 5 kids
  • Uneducated: 17 kids
  • Educated till class 5th: 4 kids
  • No other earning member: 2 kids
  • Father is grocery vendor (Avg. Daily Income: Rs 50/day): 2 kids
  • Father is a village farmer (Avg. Daily Income: Rs 40/day): 14
  • Father is a rickshaw puller (Avg. Daily Income: Rs 70/day): 3 kids

Nearly all of the children were from villages of state of Bihar. All children sold books, magazines, toys and newspapers year-round switching one to other randomly but limiting to these options only. These street children carried out the work of selling books, magazines and toys during the time from 9:00 am to 6:00 pm. Some told that they also sell newspapers to at 8:00 am and work as help-boys with certain nearby vendors in evening. These children strictly confine their occupation in nearby areas of the red-light stoppage near Hauz Khas post office.

During the course of survey, it was revealed that all of them had been working since 1-3 years and were reporting to a man name ‘Dinanath Yadav’ who had actually allured most of them from villages in Bihar to Delhi, by the prospects of a good job. These children were entitled to 25 percent share of the price of the item they sold, the rest being taken by their ‘care-taker’. For average of 10 magazines costing Rs 12/- sold per day, the average daily income of these children comes at Rs. 30. On meeting this man, he proudly claimed that he was training such groups of street children at several red-light stoppages of Delhi, and that the total number of children under him was reported to be approximately 350!

Many of these children are actually staying without their parents in Delhi slums. Of the group I interviewed, only few actually visit their villages atleast once a month. That children are working in a profession totally distinct from what their background suggests or parents do in addition to staying away from family for long durations, is indicative of a closely-knit circuit of child-abductors and corrupt government officials.

It comes as a surprise that neither children nor the ‘care-taker’ claim that they are pestered by policemen. Unwillingness on their part to talk on this topic makes me inquisitive to enquire about it in different way. Though Government has several measures in place to do away with the problems of street children, it seems the business is flourishing in a clandestine manner at a fast pace. The poor parents who are generally agricultural laborers are forced to send their children at very low age to urban areas like Delhi to earn money and support the family to meet the bare necessity. The employer derives the advantage of these children in unorganized as well as organized sector by paying them extremely low wages and extracting extra working hours. The labour law for provident fund and gratuity is not applicable for these children, which would otherwise have to be paid for adult workers. These children have no association to put forward their demands.

There are several measure already being taken by Government and NGOs to rehabilitate street children and provide them proper education, food, clothing and shelter. The two reasons which surface as prime causes for this grim situation are: 1. Extreme Poverty 2. Shrewd Industry Employers. Now the question arises how to prevent this dirty game? What can be done? Is a People’s Movement required? Its time when we start to think seriously about long-term contributions in forms of research works. I researched a bit on search engines and came across a unique idea of funding children rather than schools. This is currently being incorporated in form of Education Vouchers. Can the system work in India is yet to be discovered.

Original article: AID Newsletter July 2007