Silver Lining: An Egyptian Jeweler Develops Strategies to Accent Her Unique StylePublished: May 04, 2011
Howaida Korat was a married mother of three in 2007 when she decided to transform a passion for silver jewelry from a hobby into a business. Korat started out slowly, but she soon expanded and learned some important lessons along the way.
Korat's first foray was tentative, helping her sister, who owned a gallery in Egypt, with a small space that showcased imported silver products. But the budding Cairo-based entrepreneur, dissatisfied with the goods from a local supplier, soon added her own touch to the products, which are marketed under the name of Howaida Korat Silver. "They were just plain silver accessories with no specific edge or comparative advantage," Korat says. But she added simple components to differentiate the necklaces, bracelets and other items with a unique, handmade style. "Customers at the gallery liked my designs and started to order more."
Limited Growth Prospects
Encouraged by the response, she branched out on her own, building important connections in the Egyptian marketplace and leveraging her growing reputation. But Korat found her growth prospects were limited, because "I did not have a clear idea of how to market my designs. I did it through a very limited network of friends and family," she says.
The entrepreneur also lacked training in accounting and finance, "which made me unable to have a proper book-keeping system or differentiate between personal income and business revenues."
She addressed those shortcomings by enrolling in the Goldman Sachs 10,000 Women program at the American University in Cairo, where she learned about entrepreneurship, accounting and other business skills. In 2010, after graduating from the program and developing a formal business plan, Korat was able to identify ways to efficiently market her designs and increase her revenues.
She made a key business contact when a Kuwaiti citizen saw her products and liked her distinctive designs. "Because of what I learned at the program in the negotiation and communication skills course, I managed to close a deal with this man," she notes. "He is now selling my products in Kuwait and Saudi Arabia," in addition to her outlets in Cairo, Alexandria and other Arab countries.
Korat also joined with a fellow 10,000 Women graduate to establish a web presence and is now using online and offline social networks as marketing tools. "I have started a Facebook group through which I receive orders and market my designs," she says. "I have further expanded my client base through marketing my products via commission deals. Friends in companies take a 10% commission when they sell my products through their network of friends and colleagues."
These kinds of efforts helped lead to a fivefold increase in revenues, according to Korat. To keep pace with the jump in business, she contracted with new suppliers, expanding them from two to seven.
Besides her unique designs, Korat's competitive advantages include her target market of upper middle class women -- where price is not that important -- and her pricing structure, which reflects her relatively low overhead, according to Ahmed H. Tolba, an assistant marketing professor at the American University in Cairo. "Korat built trust among her stakeholders to the extent that her suppliers were comfortable offering credit to her," Tolba says. "As a result, she is not facing any liquidity or financing issues anymore. Further, she started introducing large items made of copper that customers find appealing."
Maintaining Quality as She Grows
Korat plans to grow further, develop a solid organizational structure and possibly open a store once her name is stronger. But her success also brings challenges. "Right now, Korat sets her prices based on cost and competition," Tolba notes. "I think the question of overhead and pricing will be more critical once her organization grows and her overheads increase."
Also, Korat recognizes the challenge of managing large-quantity orders, given the nature of her handmade products, Tolba says. To meet the tight deadlines, she and another 10,000 Women graduate are training needy women and students in their areas to help them on a project-by-project basis. "Quality is key for Korat, but as demand is increasing, she is facing the dilemma of how to maintain quality as she grows," he adds. "This is leading her to determine a way to establish a solid organizational structure and to decentralize some activities."
Meanwhile, Korat is working on her latest deal, which will involve displaying her wares in Citystars, an upscale commercial, residential and shopping complex located near Cairo's international airport. "I have made deals for my designs to be exhibited in showrooms all over Egypt," she says. "My hobby has been transformed into a profitable business."