Pakistani footballs are used in FIFA tournaments. This startup wants to help the makers

The Pakistani industrial hub of Sialkot is famous for its exports of sporting goods. The official football for the 2014 FIFA World Cup, the Brazuca, was made exclusively by a manufacturer in the city. Some reports indicated that the city manufactured and exported over 42 million footballs just to meet global demand in the days leading up to the tournament. The German Bundesliga and French Ligue 1 have also used footballs manufactured in Sialkot.

Many international brands like Adidas, Nike, Puma, and Umbro have outsourced production to the city. Its annual export revenue is estimated at US$1.6 billion. However, it’s largely a sprawling cottage industry, with most workshops operating out of homes. This is because almost all products are hand-made, relying on the craftsmanship of local workers and using little in the way of machinery.

The process is also rather complex. The industry is almost entirely export-oriented and is riddled with middlemen. Those middlemen, mostly in the Sialkot area, secure contracts directly from international clients, and then outsource production to the local artisans. In many cases, the contracts are spread over a number of different artisans, each fulfilling a particular part of the order. Remuneration for the workers is fixed, and does not involve any element of profit-sharing or variability with order sizes.

As a result, the tiny companies are not paid fair value for their goods, claim Danish Shahid and Junaid Akhtar, co-founders of sports goods marketplace SportsKot. As workers and managers in these small enterprises are relatively isolated, they’re reliant on all those middlemen. Such intermediaries pay the workers a fraction of the true value of their products, taking advantage of their lack of information and inability to negotiate directly with brands or consumers.

“I was born and raised in Sialkot and know the industry very well,” says Shahid. “Many small manufacturers were unable to survive due to falling profit margins and greater mechanization in markets such as China. I wanted to help them realize their true potential.”

Expanding reach

After talking to potential suppliers in Sialkot and doing intensive market research, Shahid and Akhtar understood their best bet would be to open an online store which they could use to source orders. They were then accepted into Lahore-based startup incubator Plan 9, which helped them with networking, mentorship, and understanding the different facets of their business.

As they worked to build the startup and streamline operations, the founders realized Sialkot’s competitive advantage lay in its handmade products. International customers raved about the quality of footballs, cricket bats, and racquets and often declared them vastly superior to machine-made products sourced from competing markets. By eliminating extortionist middlemen, the startup’s founders were now able to pay cottage industry workers ten times more than what they were used to, thus sparking a mini-revival in the struggling industry. There’s also an element of profit-sharing, with workers encouraged to take ownership of their products and not compromise on quality standards. “If we benefit, they benefit,” adds Shahid.

SportsKot founders Danish (left) and Junaid (right)

Recently SportsKot was able to raise US$140,000 from an investor in the UK who was impressed with the products he had ordered from them. The money will be used mainly for marketing and expanding operations. “We’re overjoyed with having raised funding, as our cash reserves were almost finished,” says Akhtar.

The startup is not only trying to expand its international clientele. It believes there’s a strong untapped local market and has begun to introduce products that cater to this segment. However, the objective remains to support local cottage industry and help them gain greater recognition for their sporting products.