𝐅𝐫𝐨𝐦 𝐋𝐨𝐜𝐚𝐥 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐭𝐨 𝐆𝐥𝐨𝐛𝐚𝐥 𝐒𝐡𝐞𝐥𝐯𝐞𝐬, 𝐂𝐒𝐈 𝐅𝐢𝐧𝐝 𝐒𝐮𝐜𝐜𝐞𝐬𝐬 𝐓𝐡𝐫𝐨𝐮𝐠𝐡 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐚𝐧𝐝 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬

…𝒆𝒏𝒉𝒂𝒏𝒄𝒊𝒏𝒈 𝒎𝒂𝒓𝒌𝒆𝒕 𝒂𝒄𝒄𝒆𝒔𝒔 𝒂𝒏𝒅 𝒈𝒍𝒐𝒃𝒂𝒍 𝒓𝒆𝒂𝒄𝒉, 𝑩𝒉𝒖𝒕𝒂𝒏’𝒔 𝑪𝒐𝒕𝒕𝒂𝒈𝒆 𝒂𝒏𝒅 𝑺𝒎𝒂𝒍𝒍 𝑰𝒏𝒅𝒖𝒔𝒕𝒓𝒊𝒆𝒔 𝑻𝒉𝒓𝒊𝒗𝒆 𝑻𝒉𝒓𝒐𝒖𝒈𝒉 𝒔𝒕𝒓𝒂𝒕𝒆𝒈𝒊𝒄 𝒊𝒏𝒊𝒕𝒊𝒂𝒕𝒊𝒗𝒆𝒔 𝒂𝒏𝒅 𝒊𝒏𝒕𝒆𝒓𝒏𝒂𝒕𝒊𝒐𝒏𝒂𝒍 𝒄𝒐𝒍𝒍𝒂𝒃𝒐𝒓𝒂𝒕𝒊𝒐𝒏𝒔

By Tashi Tshomo

Bhutan’s Cottage and Small Industries (CSI) Market is emerging as the premier platform for promoting, marketing, selling, and distributing Bhutanese products. As the retail division of Druksell, located in the capital city, the CSI Market is dedicated to offering a convenient and accessible platform for Bhutanese entrepreneurs to showcase their goods. In collaboration with the Department of Industry, Druksell aims to bolster support for Cottage and Small Industries by adhering to fair trade practices and raising awareness both locally and internationally.

CSI Market, the largest platform dedicated to products made and grown in Bhutan, offers an extensive array of goods. These include daily essential groceries, food items, tea, edibles, and craft products, all crafted by Bhutanese entrepreneurs. This diverse range ensures that consumers have access to high-quality Bhutanese products while supporting local businesses.

Sangay Phuentsho, Chief Operating Officer of Druksell Private Limited/CSI Market, stated, “The main objective of CSI Market is to facilitate and provide market access to local entrepreneurs, especially those producing goods made in Bhutan.” He added, “The government has included this initiative in the 12th Five Year Plan (flagship program), aiming to give market access both domestically and internationally. Local markets include Paro, Phuntsholing, and Thimphu, while external markets target Australia, United States of America (USA) and Dhaka, with ongoing efforts to expand into Singapore and Japan. We participate collectively in promotional events to increase visibility and sales. Currently, we have three collaborations and are seeking partnerships in India and China, aiming for three new collaborations this year.”

Phuentsho highlighted, “Generally, tea and spiritual items are our top sellers, with international clients showing a strong preference for these products. Regarding the country’s economy, we have a comprehensive approach, covering the entire business cycle. Our market benefits everyone once the product gains popularity and consumption increases. Overall, this aligns with our clear objectives and mandate, emphasizing collaboration in everything we do.”

He further mentioned, “We have been in this business for over ten years, with CSI operating for four years, under our parent company Druksell. This is our core commerce activity. Over the past ten years, we have exported consignments worth over Nu. 7 million annually. In 2023, CSI Market and Druksell e-commerce had a turnover of approximately Nu. 8 million, with 80%-85% of the revenue returning to the producers. This significantly benefits the country’s economy.”

According to CSI Market data, in 2022, 10% of the visitors to our market were tourists. However, last year, this figure dropped to 4%, with the majority of customers purchasing products from the CSI Market being local residents.

Karma Harshen, a 43-year-old owner of the Bhutan Store in the United States, has highlighted several key reasons for establishing Cottage and Small Industries (CSIs) in the USA. Firstly, he aims to increase the accessibility of USD currency in Bhutan, enhancing the country’s economic stability. Additionally, he seeks to promote Bhutanese products, ensuring they are recognized and appreciated by both locals and foreigners alike. Furthermore, the establishment of CSIs will create job opportunities for Bhutanese farmers, supporting their livelihoods. Finally, it will provide convenience and availability for obtaining Bhutanese products in the USA, making it easier for consumers to access and enjoy these unique goods.

He also added, “The feedback we have received indicates that the packaging needs improvement and the product prices are high. Customers particularly prefer ezay (traditional chili paste) and cordyceps. Our market sees 75% of its visitors from the Bhutanese community, with the remainder being other customers. Additionally, we offer Boba tea and other external snacks, which help us cover the store rent. If we only sold CSI products, we wouldn’t be able to sustain the store. The interest in our products has been significant, with many people eager to try them, which has been very beneficial for us.”

“We do keep records of our inventory, but it is challenging to track only CSI products because our employees are new, and most items lack barcodes. While there is no seasonal variation in sales, we consistently stock rice and maize as they are popular items. One of the main challenges we face is that Druksell cannot send products directly due to logistical difficulties. Although the ministry provided us with support of Nu. 18 lakhs, it could not be directly utilized because we agreed that the budget would be used for shipment with Druksell. Druksell sent two shipments which could not be delivered to us and were returned to Bhutan, wasting our entire budget.”

“Transporting goods from Bhutan involves multiple steps: packing at CSI, shifting to Phuentsholing, paying the fare, and finally transferring them to India. This process is cumbersome and costly. The primary issues are the high shipping costs and complicated procedures,” he added.

He also mentioned that there are Bhutanese people employed in his market: one man working full-time and one woman working part-time. This demonstrates that there are good opportunities for Bhutanese people to work in the USA.

Kuenzang Wangdi, a 47-year-old owner of the Bhutan Store in Australia, has outlined several primary motives for establishing Cottage and Small Industries (CSIs) in Australia. A key objective is to cater to the Bhutanese diaspora and other global communities by offering a comprehensive range of authentic Bhutanese products, serving as a convenient destination for “made in and grown in Bhutan” goods. He emphasized that while many customers praise the exceptional quality and authenticity of their imported products from Bhutan, some discerning individuals have noted that certain items may be priced at a premium. They suggest improvements in packaging and advocate for a wider selection of products at more affordable prices.

Moreover, Wangdi highlighted the importance of adapting to import regulations, taxes, biosecurity measures, and other compliance requirements to ensure that only quality and eligible products are imported, meeting Australia’s stringent quality standards.

“We prioritize authentic Bhutanese goods and niche products of high value sourced from Bhutan, aiming to serve the Bhutanese Community in Perth and individuals intrigued by Bhutanese culture. Operating a business here involves adeptly navigating a multifaceted tax system, meeting strict import and biosecurity regulations, adhering to comprehensive regulatory and anti-money laundering guidelines, and thriving in a dynamic economic landscape where meeting the discerning demands of customers with exceptional quality is paramount,” he added.

Wangdi shared some insights about their customer base. He mentioned that while many of their customers are from Bhutan, there’s been a noticeable increase in interest from Australians too. Wangdi also pointed out that chili products and herbal teas are becoming quite popular among Australians who shop at their store.

However, despite these positive signs, Wangdi feels it’s too early to think about expanding the business further. Since they have only been operating in Australia for two years, he believes it’s important to take things slow and steady rather than rushing into expansion.

He said, “Our business used to be run by family members, but it has become much easier now with Bhutanese workers joining us part-time.”
He explained that transporting goods from Bhutan involves several steps. There are two shipping methods: air cargo and sea freight, but goods do not get shipped directly by either method. The lack of proper connections and the involvement of multiple stakeholders add to the complexity. He suggested that it would be beneficial if the government could establish international linkages for transporting goods from Bhutan.

Further, he emphasized the significant challenge in meeting import and biosecurity protocols due to very strict and difficult requirements.
Tshewang Dema, a 55-year-old CEO of a well-known ezay and candy manufacturer, shared the impressive story of her company’s growth. Starting from small grocery shops and markets, Dema’s decision to sell her products internationally through the CSI market has led to significant increases in sales and revenue.

In an exclusive interview, Dema emphasized the significant advantages gained by tapping into the CSI market, citing benefits such as bulk sales, consistent advertisement on social media platforms facilitated by CSI, and swift turnover of products. However, she also acknowledged the challenges, particularly concerning delayed payment processes.
Undeterred by these obstacles, Dema has set her sights on strengthening her business further by contemplating expansion and the construction of a dedicated factory. She expressed her readiness to seize this opportunity pending the acquisition of a loan to fund the construction.

Kinley Pelden, a 50-year-old Chief Executive Officer (CEO) in the chocolate bars industry, talked about her path from starting small to teaming up with the growing CSI market. Before CSI, she worked at Chunidhing Food, BHR Café in the airport, and other places.

Pelden highlighted the transformative impact of partnering with the CSI market, emphasizing a significant improvement in business compared to pre-CSI times. She views the CSI market as a crucial contact point for Bhutanese-made products, effectively serving as a brand ambassador and the face of Bhutanese products. According to her, the advantages of collaborating with CSI are manifold, with the market ensuring top-notch quality through meticulous branding, captivating interiors, ambiance, and appealing product displays.

With an eye on expansion, Pelden aims to scale up production and diversify chocolate products across Bhutan and on the international stage. Her vision highlights a commitment to enhancing the presence and accessibility of Bhutanese products globally, propelled by the strategic partnership with CSI.
Kalyan Mahat, a 49-year-old entrepreneur and founder of Jinlab Agro Products based in Tsirang, Bhutan, shed light on his startup journey established in 2021. Initially, he was distributing his produce through retail outlets and the Russell outlet only. However, Mahat witnessed a remarkable transformation with the advent of the CSI market, serving as a convenient hub for Bhutanese-made products. Presently, almost half of his products find their way to customers through CSI outlets, marking a significant upswing in sales.

Kalyan expressed contentment with the sales surge facilitated by the collaboration with CSI, affirming his commitment to continuing on this trajectory. He outlined various advantages of engaging with CSI, such as seamless access to retail outlets, prompt payments, and bolstered sales figures.

For Kalyan, collaboration with CSI means he can focus on producing while CSI takes care of reaching customers. He said this has greatly improved their business by making their products more visible and available. The sales have gone up a lot because more people now know about and buy their products.

Kalyan plans to keep growing his business with CSI, as they both benefit from this partnership. He is confident that this growth will continue to benefit his company.
Kinzang Dorji, a regular patron at CSI Market, expresses his preference for purchasing locally-made spicy items and organic products from Bhutan. He typically learns about these products through social media advertisements or recommendations from friends. Despite finding the pricing slightly expensive, he views it as a worthwhile contribution to Bhutan’s economy by supporting domestically-made goods. He believes that purchasing directly from the manufacturer could potentially lower the prices. Kinzang usually shops alone and finds comfort in doing so.

Additionally, he expresses joy in seeing Bhutanese products being sold in other countries and hopes that people worldwide will appreciate the diverse range of products crafted by Bhutanese artisans.
Sonam Pelden, the media focal person of the Department of Industry, highlighted that market access remains a significant challenge for Cottage and Small Industries (CSIs), both domestically and internationally. However, the Department of Industry (DoI) has taken several steps to address these challenges. One initiative involves providing training in packaging, labeling, and digital marketing, including photography and videography, to promote CSI products through various channels such as BBS and social media platforms. Additionally, the DoI assists in the certification and standardization of products through collaboration with organizations like the Bhutan Standards Bureau (BSB) and the Bhutan Food and Drug Authority (BFDA).

The Department has also established CSI Markets in Thimphu and Paro to create more opportunities for local producers. Furthermore, they support the establishment of Bhutan Stores in Perth, Australia, and New York, USA, to showcase and sell Bhutanese CSI products. These government-led initiatives have led to increased visibility of “Made-in and Grown-in Bhutan” products, improved product quality, and enhanced packaging and labeling standards. Currently, over 500 CSIs supply their products to CSI Markets in Thimphu and Paro, while approximately 100 CSIs are capable of supplying their products to Bhutan Stores in Perth and New York.

The CSI Market not only serves individual customers but also facilitates wholesale orders, offering competitive rates and efficient delivery services. Its specialization in personalized gifts suitable for all occasions makes it a convenient one-stop-shop for all Bhutanese-made products. With a dedication to fair trade and quality, the CSI Market plays a vital role in enhancing the visibility of Bhutanese products and fostering the growth of local industries. Through its robust platform for marketing and distribution, the CSI Market actively supports the economic development of Bhutanese Cottage and Small Industries, ensuring that the rich heritage and craftsmanship of Bhutan receive recognition and appreciation worldwide.