Indonesia's Craftswomen vs. Fast Fashion

Denica Riadini-Flesch is transforming the lives of women working in the informal economy - by pioneering transparency and education in Indonesia’s craft industry.

Trained as an economist, she believes that development without inclusivity is not progress. Having worked in the development sector, she leverages the potential of the handworker economy to bring millions of women in rural Indonesia out of poverty. Given their invisible status and systematic skill gaps, they are among the most vulnerable to exploitation in complex global supply chains.

Through her social enterprise SukkhaCitta, she is pioneering change by cleaning up dirty practices in the fashion industry while ensuring the indigenous communities who make our clothes can participate and prosper from the formal, global market. Her work has been recognized by among others Forbes, Fast Company, and DBS Foundation.

Artisan production is the second largest employing industry of women in developing countries. Yet despite their remarkable skill and hard work, millions of artisans are stuck in a cycle of poverty. It is women like them, working from home, who make up to 60% of our clothes worldwide. With most attempted solutions focusing on regulating factory work, they are left behind, unequipped to benefit from rising demand for their products. Kept hidden by a global outsourcing system, they are invisible.

SukkhaCitta works with these women directly, providing training and business skills before connecting them to the market. Through our #MadeRight transparency standard, we expose dirty industry practices and educate customers about the impact of their choices. Our scalable model is proof that bridging the handworker economy into the formal sector can solve some of the toughest challenges of the industry - in a way that is inclusive, green and profitable.

A Destructive Industry

Fueled by increasing disconnect and anonymity, apparel production is one of the world’s most destructive sectors. By 2050, the fashion industry will use up a quarter of the Earth's carbon budget (Ellen McArthur, 2017). With more than half of production outsourced from factories to villages, the unregulated use of toxic chemicals in dyeing has been shown to cause 20% of the global water pollution (World Bank). 

Systemic Exploitation of the Invisible

Despite the rise in demand for artisanal products, craftswomen in developing countries are unable to benefit due to an existing skills gap in the quality and sustainability standard demanded by the global market. Kept invisible by at least 8 layers of middlemen, these women are among the world’s most vulnerable working populations, earning an average of $1.80 per day. In fact, only 2% of women who make our clothes earn enough to cover their living expenses (Fashion Revolution). This is a barrier to unleash the potential of craft to promote economic inclusion and gender equality in patriarchal countries such as Indonesia – while forcing the young generation to abandon indigenous crafts, trying to escape the modern slavery behind our clothes.

Our model is a bridge that empowers the most vulnerable indigenous communities to prosper in the formal market:

By working with villages, not factories, we directly provide opportunities to the most marginalized of this informal sector – about 80% of them stay-at-home mothers. Through targeted initiatives, we address the gap in quality and design and introduce business knowledge as well as environmentally friendly production practices.

Then, we connect them to the market. Through our pioneering #MadeRight standard, we enable our global community to be part of the solution. It is a mechanism that translates their preference for ethically made products while at the same time raising awareness and putting pressure on the entire fashion industry to clean up their supply chain.

To reach over 5,000 handworkers and farmers sourcing our dyes over the next 5 years, we are now building Indonesia’s first modular craft schools, empowering young women to set up and run their own craft businesses. Our next stage of scaling is to enable systemic change through a simple mobile app: Open sourcing best practices to artisans all across the Archipelago while obtaining breakthrough data that can serve as a reliable basis to guide future social protection programs.

SukkhaCitta directly serves the invisible and typically overlooked majority of craftswomen who work from home, in villages, not factories. Usually not having attended high school, craft is their only chance to earn their own, independent income - in a culture where gender discrimination is prevalent and they are expected to be the primary caregiver for their children.

To decide which communities to work with, I conduct a baseline survey over multiple visits – assessing impact potential, craft skills and overall openness of the community to learn and develop new designs with us. If they are compatible, we together elect a local leader and start a training and sampling process, providing orders at living wage rates from day 1.

Since 2016, we have grown from 3 women to 352 people, impacting 1,282 lives in 7 villages across Indonesia. Their incomes have increased by 60% on average. We have also managed to prevent over 1,000,000lt of toxic waste water through natural dye trainings.

More importantly, we see a clear shift in mindset and outlook: Strengthened in their socio-economic position, our artisans increasingly take charge at home and in their communities – developing own initiatives to impact their villages and pay it forward.

We work directly with the most marginalized group of artisans, most of them mothers working from home who face systematic barriers in economic opportunities. By providing them with business skills and encouraging entrepreneurship, we empower these women to lift themselves and their communities out of poverty. At the same time, our advocacy work raises awareness for the issues in fashion and craft to bring about fundamental changes in the industry.  One example of this is t’angan: Our exhibition with Yo-Yo Ma in December 2019 that highlighted valuable lessons from craft and indigenous philosophy for today's fashion world (>10,000 visitors).

Frustrated by the ineffectiveness and bureaucracy of the world of development work, I decided to finally quit my job to really understand poverty in my home country – traveling village to village. What I found felt like an invisible opportunity: In many of the indigenous communities in rural Indonesia, women still handcraft beautiful textiles. Yet despite their remarkable skill they struggle every day.

As an economist, I knew the concepts of inequality, poverty. The metrics used to measure it. Yet they weren’t numbers in reports. They took me in and shared their traditions with me. Their stories broke my heart. When I finally gained enough social capital in one community so they would sit down with me and put things on paper, enabling them to earn a decent income did not seem so hard. But these women needed a bridge, connecting them with a community I knew was out there – while at the same time providing them with the information and skill to create products this community would buy.

It started with three women and a scarf in August 2016. Today, in their village alone we have more than 40 people – artisans and farmers sourcing our natural dyes.

I was working for a prestigious development agency when a bone tumor turned my world upside-down – leading me to question the definition of success I had grown up with. After a difficult recovery with a bout of depression, I finally quit my job and traveled through rural Indonesia, going back to my Indonesian roots in search for something more meaningful than writing reports and boardroom meetings.

There, I met the women who would change my life forever. What surprised me the most was to see how their indigenous knowledge is far more advanced with regards to sustainability and equality. Yet, these women were kept invisible in a global supply chain that demands faster, cheaper goods. Sharing their story and wisdom, making market forces available for them to pursue their individual freedom became my purpose.

SukkhaCitta means happiness in Indonesian, the (original) Sanskrit spelling represents returning to what we truly value as a society. It encapsulates my own journey to a meaningful life I have found in Indonesia’s villages. And of course the impact we create: I learned from our artisans that the opposite of poverty is not wealth - but dignity, the feeling of being valued and seen.

I believe it usually takes an outsider to drive change in an industry. As a development economist I had no regard for the status quo. I was not concerned with catwalks and fashion calendars but driven to find a way for Indonesia’s indigenous craftswomen to escape poverty. My experience as a development consultant from an entrepreneurial family led me to search for a model that integrated philanthropy and capitalism into a self-sustained, market based solution. 

Of course this did not happen overnight. It took great grit and the ability to listen to find the gaps – and then fill them, one step at the time. In the first year, I spent sleepless nights learning everything from design, marketing, to building an e-commerce platform. Between these and going to the villages, it was the most physically exhausting period of my life. I found that in first doing things that don’t scale, you find ways to continuously test, refine, and scale your solution.

Listening built trust and allowed me to challenge my assumptions and preconceived notions of how things should be - identifying the best solutions together with our grass root leaders: In our discussions we realized that market access was not enough, they needed business knowledge, too. It is what led to our craft schools where we empower future leaders through apprenticeships. More recently, these discussions gave rise to the idea to identify rural artisans all over the country through an app so they can gain access to social protection programs.

The health crisis in Indonesia has turned into a humanitarian one. Without a social safety net infrastructure, the World Bank estimates that informal workers like our artisans to be the hardest hit and millions to be brought into poverty, annulling decades of progress. It has been scary for me to see how fast these abstract numbers have become very real in the field: Almost daily, women would come to us, desperately looking for work.

Like most, SukkhaCitta was hit hard by the crisis. While many advised us to hibernate, I feel that as a social enterprise it is now more important than ever to rise up to provide direct relief. Through creativity, partnerships and hard work, we managed to secure work at full living wage rate for all our artisans – while opening our platform to an additional 75 women who lost their livelihoods through the crisis. Through microgrants and remote trainings, they now make much needed PPE from home that we donate to front liners in last mile communities across Indonesia.

In addition, we have used this crisis to improve our internal systems and quality control, making available additional resources to strengthen both our business and impact (see below).

I have come to learn that leadership is not about heroic acts. It’s about awakening leadership in others. To me, the way our artisans rose to the occasion in the middle of the Covid-19 crisis shows the true nature of our work. Inspired by our commitment to stand together, they became even stronger pillars for their communities.

One example is Ibu Erli, a mother of two who is the sole provider of her family. Her island is hit particularly hard by the pandemic, the loss of tourism evaporating thousands of livelihoods. Part of our platform for only a few weeks at the onset of Covid-19, the experienced seamstress decided to train women in her community to sew and embroider so they can earn an income outside of tourism – despite her own fears and difficulty. Then she pitched us the idea to make them part of SukkhaCitta, building a centralized finishing unit.

Today, she and 25 others are part of our new center there – already helping us reduce rejects, improve quality and develop new product lines. Inspired by our mission and commitment, her courage, ingenuity and kindness provided livelihoods and a new sense of hope for her entire village.

Scalable

What makes SukkhaCitta unique is its scalable “and philosophy” – reconciling the free market with social and environmental impact. Our model is proof that a new form of capitalism – one that respects planetary boundaries and people – is not only necessary but very much possible. It was born out of my realization that Indonesia’s craftswomen did not want charity – they wanted dignity and fair pay for honest work.

Market Based

That’s why our unique model is market-based, shifting the current equilibrium through transparency (demand side) and economic incentives (supply side): After providing our craftswomen with business education and the skills needed to produce according to our standards, we connect them with customers around the world willing to pay a premium for their products. This is facilitated through our #MadeRight transparency standard, a set of rules and principles which our artisans have to follow to keep access to our platform while at the same time allowing our customers to translate their preferences for ethically handcrafted products.

Field Tested

Leveraging the power of the market, we have scaled this model from 3 to 352 artisans and farmers over the last 4 years, impacting 1,282 lives. Their average increase in income is 60% and their products were shipped to over 30 countries (more impact data below). Through our craft schools and our app we want to reach many more. 

The Problem

In a country where education acts as a barrier for last mile communities to enter formal employment, craft offers a livelihood option to nearly 30,000,000 people living under poverty. Yet systematic skill gaps and their invisible status prevent these indigenous craftswomen from participating and prospering from the rising global market for their products.

Our Solution

Our solution addresses the root issues of the current, unjust equilibrium: lack of education and transparency. Through our work on the ground, we identify and professionalize home-based artisans through trainings and certifications that bridge the gap in design, quality and sustainability. These efforts are matched by the creation of demand through our #MadeRight transparency standard: Our customers know why, where and by whom their clothes were made, allowing them to choose products that are in line with their values. It is the key that has been missing in previous interventions, incentivizing best practices in production while creating additional willingness to pay and awareness to permanently shift the industry.

Short-term Outcomes

Through SukkhaCitta, our artisans understand the needs of their target market and can significantly improve their livelihoods - bypassing seven layers of middlemen. Their average 60% increase in income is usually spent on the nutrition and schooling of their children and creates interest among young women to learn and continue the craft.

Long Term Change

We have observed a significant strengthening of the socio-economic role of our craftswomen in a societal context where gender discrimination is prevalent – both in their families and the community. Incentivizing clean production practices has moreover led to the regeneration of ancestral plants, the prevention of over 1,000,000lt of toxic waste water and a stronger connection with and hence protection of local forests.

Proof of concept

Since 2016, we have grown from 3 to 352 artisans and farmers. We have been profitable since 2017 and shipped our products to 30 countries. At the same time, our campaigning work has gained significant momentum and recognition – by among others Yo-Yo Ma, the German Government, Forbes and Fastcompany. Surveys of our customers moreover showed behavioral shifts towards sustainable consumerism.

We currently work with 352 artisans and farmers, 80% are mothers who are the sole provider of the family. Following our certifications, their income has increased by on average 60%, providing a much needed direct relief to over 1,282 lives impacted by our #MadeRight supply chain. Moreover, these families no longer have to expose themselves to toxic chemicals in their homes. Through our natural dyes, we have prevented more than 1,000,000lt of chemical water waste into their rivers since 2016.

This year, we will finish 3 modular craft schools which will open their doors for young women all over Indonesia to receive scholarships and learn the necessary skills to develop herself and her village through craft. Every year, we aim to train 100 apprentices to follow our dual curriculum, inspired by the German vocational education system. Through these schools, we empower the next generation of craftswomen to become leaders and set up their own craft businesses according to our #MadeRight standard.

Over the next 12 months, we will focus on providing enough work for our current 352 people throughout the Covid crisis while preparing to welcome our first students in our craft schools. Over the next five years, we aim for 5,000 – bringing the number of beneficiaries to 20,000. Moreover we want to reach 1,000,000 artisans through our app by 2025 - making our curriculum, market and pricing information available to the most remote and marginalized artisans for free.

Could data transform the lives of millions of invisible women in fashion’s global supply chain?

This was the question that has kept me awake through the Covid lockdown.

As demand evaporated, the blow back on the apparel supply chain is devastating. Millions of workers – some of the world’s most vulnerable people – lost their livelihoods. Yet it only revealed a pre-existing condition: Even before this crisis, less than 2% of the 75 million people making our clothes earn a living wage to cover their most basic needs.

Efforts to address this injustice are focused on factory compliance. It overlooks the fact that up to 60% our clothes are made outside of a factory setting: by women working from home in developing countries such as Indonesia. It’s by empowering women like them, through access and education, that we will bring about change in the industry.

Over the next 12-18 months we will lay the foundation: Besides operational improvements and securing traceable key resources (we’re currently developing a local, carbon negative cotton supply chain), we will leverage our schools to grow our number of artisans while calibrating our curriculum before making it available to 1million artisans through simple technologies over the next five years.

Leveraging Indonesia’s high mobile phone penetration, we will be able to reach remote villages, gaining valuable data on numbers, location, and income of Indonesia’s most marginalized craftswomen. This database will make it possible to end their invisible status, enabling partnerships to overcome exploitation in global supply chains.

12 Months:

Building our own artisan supply chain from the ground up has come with its challenges. Among them are rejects and inconsistencies (from uneven colors to sizing issues) as well as a complex, increasingly difficult to monitor value chain spanning five provinces. Our healthy cash flow prior to the crisis allowed us to absorb losses from these inefficiencies. However, in order to survive the crisis and scale we need to further standardize our processes, improve consistency and establish a digital system that allows us to efficiently monitor our supply chain.

Another key challenge is founder dependency. At the moment I am still highly involved in day-to-day operations – from following up on late orders and ensuring our website is up to date to marketing and developing new collections with my design team. Finding ways to effectively hand some of these tasks over to others will be key for me to be able to focus on scaling our business and expanding our impact.  

5 Years

Sometimes I am amazed by how far we have come with WhatsApp and Excel sheets. But looking ahead we will have to develop a dependable digital infrastructure that allows us to bring our work to the next levels and reach 1 million people. Through our app, an ERP tailored towards our decentralized supply chain needs and block chain to boost confidence in our traceability and transparency. Identifying the right solutions and raising necessary capital will be key to ensure a successful digitization of our impact.

Production and Consistency

Rejects and our decentralized approach to quality control with products being shipped back and forth make up approximately 40% of our current production costs. To tackle these issues, we are now in the process to set up a central facility that will reduce our waste and costs and help us achieve the following objectives:

1. All of our products are finished according to international quality standards and diversify to a new premium product line.
2. #ReMadeRight: Reject products with holes and stains can be turned into beautiful, one-of-a-kind pieces through embroidery

In addition, together with Nest (see below) we are now actively looking for an ERP provider which can accommodate for our complex needs despite a somewhat constrained budget and implement best practices to improve our supply chain management.

Founder Dependency

While I already receive coaching on a quarterly basis by an experienced consultant, I am currently looking for a mentor who has walked the path ahead of me. His or her experience would be extremely helpful in supporting me navigate the difficult decisions and tradeoffs ahead.

Technology & Capital

My team and I have already begun to map out the areas where we will need technology to scale both our business and impact. Our next step will be to start looking for vendors and potential partners – and eventually for possible funding sources to make the necessary investments.

BACH PROJECT is an experimental project initiated by world-renowned cellist Yo-Yo Ma on how culture connects us. Together, we hosted an exhibition in Jakarta to raise awareness on the damaging impacts of fast fashion and showcased craft as an inclusive and sustainable alternative. The event featured UN Women Indonesia and had 10,000 attendees.

KOPERNIK is a Bali based NGO focused on finding solutions that work to alleviate poverty. They are a key partner in our efforts to research and cultivate carbon negative cotton in last mile communities across Indonesia.

DBS Foundation Singapore is a key partner since 2018 when we won their Social Enterprise of the Year Award which funded the construction of our first craft school in Central Java. 

NEST is a New York based NGO that connects and supports craft based businesses. We are currently participating in their Accelerator program to support us in standardizing our decentralized supply chain.

German Ministry of Foreign Affairs: Jakarta Embassy is our first public sector partner. Since our craft schools’ curriculum is in part inspired by the German TVET system, we were the first social enterprise/ for profit organization to win the German Embassy’s Annual Small Project Grant in 2019 which was used for the construction of our second craft school in East Java.

SukkhaCitta creates The Most Meaningful Clothes, ethically handcrafted in villages, not factories. Having identified the problem of access that keeps millions of women invisible and exploited in the global supply chain, we make it easy for our customers to be part of the solution.

At the core of SukkhaCitta is our Village Development Work, bridging education and transparency to equip our craftswomen to lift themselves out of poverty. We spend most of our resources going to the field, finding Indonesia’s most marginalized artisans, investing, and connecting them directly to you. On average, our 352 artisans and farmers experience a 60% increase in income.

Environmentally, we leverage on existing indigenous wisdom and traceable materials to pioneer clean production practices of our clothes. Building the capacity for our communities to switch to natural dyes has prevented over 1,000,000lt of toxic water waste from entering our rivers. To close the loop and shift consumptive patterns, we offer free repair services and implemented a reforestation program powered by our customers’ purchases.

To sustain these higher costs, we leverage our #MadeRight transparency standard, creating a mechanism for customers to translate their preference for ethically and sustainably made clothes. Our direct-to-customer model allowed us to become profitable as of 2017 -  capturing additional willingness to pay which funds our development work while fulfilling the need to feel good about their purchases: Our customers know exactly how and where their clothes were made and the impact it had on the lives of the women who crafted them.

Our work is sustained by our business, through the revenue generated from clothes handcrafted by our artisans. We became profitable by being a direct-to-customer company, allowing us to retain most of our margins to subsidize our impact work. Our mission and focus on community building has paid off in the form of repeated sales as our customers become advocates of the brand, lowering our acquisition costs.

56% of our revenues (including most of our profits) flows to our artisan communities – for production, training programs, capacity building and the construction and maintenance of our craft schools. The remainder is used to cover wages, office rent, taxes and social benefit payments, leaving us with an average of 12% net profit which are reinvested in the business.

This model has allowed us to scale in a self-sustaining way without the need for external funding. Occasionally, we receive awards and grants that are channeled to fund capital expenditures such as building our craft schools.

Currently, we are in the process of standardizing our artisan production and starting a centralized finishing division to improve our profitability considerably. This directly address the largest source of our costs: inconsistencies and rejects, freeing up resources to further grow our business and expand our impact.

As mentioned above, we finance most of our operations from our own revenues and profits. We'd be happy to provide more financial information by email if you'd like to learn more. 

We'd be happy to provide more financial information by email if you'd like to learn more. 

We'd be happy to provide more financial information by email if you'd like to learn more. ›

First, the Elevate Prize will provide awareness for our work and celebrate the craft of our artisans around the world - which will help us build partnerships with the right stakeholders globally. Our biggest boosts in credibility and market growth have come from international recognitions of our work. A prestigious award like the Elevate Prize would undoubtedly differentiate us from brands and establish SukkhaCitta as the leader for sustainable fashion in Indonesia. This is particularly important since we observe a worrying trend of other brands undermining our mission by copying our marketing instead of our practices.

Second, I am excited to connect with your network of mentors and leaders. I believe their experiences are invaluable in our scaling up stage, build systems and reduce founder dependency. I would be honored to work with your ecosystem on forging this next stage of growth for our social enterprise.

Third, the financial dimension of the prize would allow us to accelerate our growth and bring our impact model to the next level. While we pride ourselves to have gotten to this point without investment, the additional funds would allow us to make significant investments into the digitization of our work, hire new, highly skilled and experienced team members and launch a pilot for our app in 2022.

Creating awareness for the challenges of informal workers in global supply chains is key to transform the industry. Only by bringing visibility to these millions of women will consumers finally change their behavior and increase pressure on producers around the globe to change their practices.

As mentioned before, in particular international recognition of our work will serve to further strengthen our position on the Indonesian market and differentiate ourselves from brands that cement the status quo by only changing their marketing, not their practices.

We’d love to be connected with any organization within your network that could help us with one of the following areas:

1. Designing and developing a simple, engaging app for rural artisans across Indonesia
2. Leveraging blockchain technology to make our supply chain even more transparent and traceable
3. Leadership development: of myself and my team as we scale our business