E-commerce has long been hailed as a means of providing sustainable livelihoods to artisans in developing countries. Historically, these artisans have marketed their wares directly to local consumers, tourists and to export markets. To reach these global markets, local artisans have had to work with middlemen who mark up the prices significantly, leaving the local producer with only a fraction of the profit. Over the past decade, however, a number of initiatives have begun to harness ICTs to give artisans a competitive alternative to this exploitative system.

The most exciting and useful of these tools that I’ve found is CatGen, an open-source e-commerce platform created by PEOPLink. I had a chance to hear Dan Salcedo, founder of PEOPLink, talk about his software yesterday at USAID. Based on the information presented, CatGen has proved to be a great success.

PEOPLink launched the first online crafts catalog in 1995. Although financially successful, it’s impact and scalability was limited. Realizing that it made more developmental sense to have the artisans themselves manage their info, the company released its first version of CatGen in 2000. Now in its 4th revision, the software “enables any enterprise anywhere to create its own web catalog. It operates off-line for low bandwidth situations and generates catalogs with many sophisticated features such as credit card payments via PayPal, and ability to print paper catalogs or burn them to CDs.”

Although the CatGen client can upload an artisan’s catalog of products to any low cost server, for $100/yr they can host their catalogs on the CatGen server. For their extra investment, artisans receive search engine optimization (meaning a higher placement in Google searches), web traffic statistics, and the ability to participate in searchable marketplaces. By increasing the number of potential customers reached, these extra features may in fact pay for themselves.

Dr. Salcedo mentioned a couple of lessons he’s learned over the years. First, the key to the successful use of CatGen is having a local partner who can provide technical support, business assistance and training. He likened CatGen to the ‘brain’ of a living system; without the arms, legs, and other vital organs, the brain will die. Telecenters can offer some of these support systems, and in turn help improve their own financial viability. Second, the application can be useful in even the most remote areas. He shared an example of an entrepreneur that set up his own successful e-commerce business using a solar-powered laptop and a cellphone for connectivity. Finally, to reduce shipping costs, artisans use the ‘LIBIBO’ method: little boxes inside big ones. By shipping orders in bulk once a month, transportation costs can be reduced by as much as 80%.

What’s next for PEOPLink and CatGen? The organization has tied up with eBay, which plans to launch its own Artisan Marketplace within a few months. PEOPLink will act as an ‘infomediary’ between the artist and eBay, helping artisans post their items to the online auction site and increasing trust in the transaction by the consumer. The goal is to have 13,000 – 15,000 artisans selling through the site by the end of 2006.

Most interestingly, the software is now also being used by independent artisans in the US! Another great example of a service designed for the BOP that also proves useful in top-tier markets.