117

Aarong:
How Rural Hands Revolutionised Fashion1

Rezwanul Huque Khan, Maisha Islam Monamee,

Hridita Islam, & Syeda Ramisa Munia2

Social enterprises are considered to have huge potential in alleviating social

problems of the world, while also generating revenues for the firms. But the
success rate of these social ventures is still low and most of them strive for
sustainability. This study offers an in-depth analysis of a social enterprise,
Aarong, a retailer in Bangladesh, which revolutionized fashion in the country by
empowering local artisans and rural craftsmen through a sustainable social
business model. Starting its journey with a single store created in an attempt to
support rural women, the brand has now become the largest retailer of the
country. Analyzing Aarong’s journey over the decades, this case study highlights
its production process, explores the expansion strategies and also digs deep into
the success factors in maintaining a sustainable growth in business while
offering a decent life for the rural communities by alleviating their poverty. It also
shows the current challenges faced by Aarong and offers a few
recommendations to overcome the limitations imposed by those challenges.
Finally, drawing on this case of a successful social enterprise, the implications
for the academics and the practitioners are discussed. Overall, the case study is
a vivid example of how a social project can be transformed into a sustainable
social business and can be replicated by other enterprises for a better world.
Keywords: Local artisans, Aarong, social enterprise, rural crafts, cultural
heritage, Bangladesh

1
This case is the revised version of the previous draft which was selected as one of the World Top 10
winner cases at the World Asian Business Case Competition 2022 (WACC 2022).
2
Dr. Rezwanul Huque Khan is a Professor, Institute of Business Administration, University of Dhaka,
Bangladesh (email: Rezwan@iba-du.edu)
Maisha Islam Monamee is a Student, Institute of Business Administration, University of Dhaka,
Bangladesh (email: mislammonamee@gmail.com)
Hridita Islam is a Student, Institute of Business Administration, University of Dhaka, Bangladesh
(email: hridita2001@gmail.com)
Syeda Ramisa Munia is a Student, Institute of Business Administration, University of Dhaka,
Bangladesh (email: ramisamunia@gmail.com)

ACADEMY OF ASIAN BUSINESS REVIEW ISSN: 2384-3454 / 22 / $10.00

Vol. 8, No. 2. DECEMBER 2022 ⓒ Academy of Asian Business 2022
118 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

In the year 1978, somewhere in the farthest corner of Bangladesh, sitting in

the yard and sewing Nakshi Kantha (a type of embroidered quilt), a 40-year-old
woman maybe was pondering about when she is going to get the payment for the
work she is doing right now. As she stroked the Nakshi Kantha another time with
her needle, she gradually became more concerned– will the patterns, the motifs, the
work of art that she is creating with her own hands right now be preserved and
appreciated two generations later? She sighed after a while and cursed her fate. At
the very moment, somewhere in the urban areas of Bangladesh, a 60-year-old
grandma who refuses to wear all buttoned up foreign clothes and loves to boast
about her childhood, was maybe talking with her grandchild about the times when
she used to wear traditional Bengali clothes which reflected her true identity.
Maybe after understanding that her grandchild wasn't really paying attention to
what she was saying, she sighed and wished for a place where she could take her
grandchild and show how beautiful their traditional clothes actually are.
Maybe these two women's sighs were heard by the founders of the largest NGO
of the world (BRAC), Sir Fazle Hasan Abed and his wife Ayesha Abed, as they
decided to open the retail store Aarong– a social enterprise to work for the
marginalised communities of Bangladesh. Born out of a simple determination to
empower the marginalised rural women and help them unleash their full potential,
Aarong has now evolved into a booming international business that sells
everything from ethnic wear to gorgeous crafts, including silks, handloom cotton,
endi, terracotta, bamboo, jute, and more. As a pioneer in the country's handicraft
business, Aarong has brought public attention back to Bangladeshi crafts and
materials, as its designers merge the old designs with the contemporary in a way
that continues to appeal to consumers. “Aarong has made a continuous effort in
linking crafts to fashion and to the market, both at home and abroad,” said Tamara
Hasan Abed, Senior Director, BRAC. In this way, Aarong also serves as a
protector and promoter of indigenous Bangladeshi designs and products. It has a
large design library where relics of Bengali rich craft tradition, such as Nakshi
Kantha art and Jamdani patterns, have been extensively investigated and stored for
current and future usage. Aarong has grown from a basic marketer of artisan
handicrafts to the country's foremost fashion and lifestyle brand; according to the
Lonely Planet guide, it is a "must-see” in Bangladesh.
 Aarong 119

Company Overview

The Birth of Aarong

It was founded in 1978 at Manikganj as a CSR-based handicraft industry. When
BRAC first encouraged women in Manikganj to engage in sericulture, its sole
consumers were a few scattered Dhaka stores. Their whole focus was to ensure that
Manikganj's impoverished silk growers were paid for their wares upon delivery,
allowing them to feed their families. Today, Aarong supports 65,000 craftspeople
with fair trade terms through its 20 retail outlets across Bangladesh and over 100
fashion and leisure product lines (Wee, 2016, 4). Aarong's female employees are
from some of the country’s poorest people. BRAC's multifaceted development
programs benefited every woman who worked in Aarong's production facilities.

Figure 1
Rural Women Working at Aarong Production Centre

(Source: The Good Feed Magazine)

Additionally, Aarong commercialised the crafts of 850 independent cooperative

groups and traditional family-based artists (a total of 25,000-30,000 independent
artisans and labourers) (Khanom, 2016). Non-textile goods and specialised services
such as tailoring were typically provided by independent producers. Potters, brass
works, jewellers, jute workers, basket weavers, handloom weavers, silk weavers,
wood carvers, leather workers, and other craftsmen with particular skills flocked to
Aarong for getting support services. Aarong has around 488 goods available in
their stores and has grown from a single store to become one of Bangladesh's
largest retail chains, with twenty locations including Dhaka, Chittagong, Khulna,
and Sylhet, as well as one in London, United Kingdom.
120 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Ayesha Abed Foundation

Ayesha Abed Foundation (AAF) is a non-profit organisation of Aarong that aims
to offer rural women opportunities for job and revenue generation. It is solely a
women's community created to empower them both economically and socially
through their work as producers and their development as entrepreneurs.

Figure 2
Ayesha Abed Foundation

(Source: www.Aarong.com)

The organisation provides a suitable working environment, financial and

technical aid, and training to help women develop their trade abilities. The
foundation was formed to honour late Mrs. Ayesha Abed, a coworker and wife of
BRAC's Founder and Chairperson, and her work. The AAF's mission is to help
society's most marginalised women. The women are put in a supportive setting
alongside other women from comparable socioeconomic backgrounds. One of the
primary issues these women confront is that they are marginalised and have no
possibility of integrating into the economic system on their own. This is where the
AAF comes in, assisting marginalised women in breaking free from their
marginalised status in society and allowing them to participate in sustainable
enterprise (Choudhury, 2010, 5).

How Aarong works

Aarong uses a decentralised manufacturing method since it employs people from
various semi-urban and rural locations, unlike most commercial firms, which prefer
to concentrate production in an area with low-cost infrastructure and labour
availability. The majority of Aarong's items are made in workers' homes around the
country.
 Aarong 121

Figure 3
Production Process of Aarong

(Source: www.Aarong.com)

Initially, a dedicated team of designers are employed to come up with ideas on

what kind of designs they are going to offer in the upcoming year. Designers
collaborate with manufacturers to generate product samples, which has to be
authorised by the General Manager of design before large-scale production can
begin, using product and quantity requirements established during the planning
stage to ease the product design process (Ray, 2015, 6). The costing department
works with outside vendors to get the necessary raw materials and calculate the
product costing when a product sample is authorized. The necessary raw materials,
design instructions, and costing information are subsequently provided to the
producers. Producers are given working capital in the form of low-interest,
collateral-free loans, as well as raw materials on credit for certain product lines.
The AAF centre and sub-centres, as well as individual producers, complete the
production. Each step of the manufacturing process includes quality control criteria.
Before being delivered to the main Aarong storage facilities, goods made by AAF
centres or by independent artisans are checked at various stages of production to
ensure its quality standards.

PESTEL Analysis of Aarong

Political Factors
Political factors like government policy, political stability or instability in
overseas markets, foreign trade policy, tax policy, labour law, environmental law,
trade restrictions often make an impact on companies like Aarong. According to
the political agreement of the Bangladesh government, Aarong is now exporting
their product in the UK and USA. So, they have to be able to respond to the current
122 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

and anticipated future legislations in foreign countries too, and adapt their
marketing policy accordingly (Ahmed, 2017, 18).

Economic Factors
Factors like economic growth, interest rates, exchange rates, inflation,
disposable income of consumers and businesses have a great impact on Aarong
(Jahan, 2018, 17). As Aarong is one of the leading brands of bangladesh and its
annual turnover is increasing day by day these economic factors are important
aspects of Aarong’s growth.

Social Factors
Social factors include population growth, age distribution, health consciousness,
and career attitudes and so on. These factors are of particular interest as they have a
direct effect on how marketers understand customers and what drives them. Aarong
follows the social factor and by concentrating on that, it determines its target
customer and marketing strategies.

Technological Factors
Companies like Aarong are focusing on improving their technology as it will
allow them to cope up with the challenging world. It is currently investing on its
research and development sector through technological advancements so that they
can produce more quality products at a shorter period of time (Jahan, 2018, 8). It is
also focusing on social media and electronic media to communicate with its target
market as well as to promote its products.

Environmental Factors
Consumers are increasingly expecting that the things they buy are
environmentally friendly and sustainable because of the current environmental
crisis. Aarong has given rise to a greater demand for locally manufactured fabrics,
which in turn has played a vital role in reviving the almost extinct traditional
jamdani (woven cotton fabric) and muslin (loosely woven cloth). Committed to
being environmentally friendly, Aarong has also introduced dyes free from AZO
(restricted aromatics which may be harmful to skin) and PCP (used for chlorination,
also deemed harmful) in its cotton fabric production.

Legal Factors
Health and safety, equal opportunities, advertising standards, consumer rights
and regulations, product labelling, and product safety are among the legal factors
 Aarong 123

that Aarong monitors. It is obvious that in order to trade successfully, Aarong must
understand what is and is not lawful. In the event when a company deals
internationally, this becomes an extremely tricky issue to master because each
country has its own set of rules (Ahmed, 2017, 8).

Development Timeline

Figure 4
Development Timeline of Aarong

(Source: Primary data)

124 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Market Overview

Aarong was a trailblazer in several aspects of the retail industry. For example,
Taaga, one of the sub-brands of Aarong, created a new category of clothes for the
urban young generation with its fusion fashion brand. It was also the first retailer to
embrace ecommerce. Aarong currently has 20 stores in Bangladesh, including 14
in Dhaka. As of Sept 2022, Aarong has crossed 1,100 crores for the year 2022. The
retailer's annual growth rate is between 15% and 20%. Aarong has about 68% of
the total handicraft market share in Bangladesh. Despite the worldwide financial
crisis of 2008-2011, Aarong's revenues and earnings continued to rise.
When Aarong opened its first shop in 1978, Karika was the only handicraft
producing company and thus Aarong’s competitor (Islam, 2017, 7). Day by day,
Aarong had grown to be far larger than any of its competitors, it still had to
compete with thousands of stores selling similar products (often produced at lower
cost because they did not incorporate Fair Trade practices). Later, DeshiDosh was
formed by ten local fashion firms in an attempt to compete with Aarong which
included brands like Kay Kraft, Rang, Anjans, Banglar Mela, Shada Kalo, Deshal,
Bibiyana, and Nipun. Some independent fashion designers like Rina Latif, Bibi
Russel, Maheen Khan who also worked mostly on traditional Bengali clothes were
Aarong’s competitors. In recent years a lot of online clothing brands have also
sprouted like Pankouri, Haritaki, Prapti etc which also serve similar products and
jewellery at a very low cost.

Figure 5
Comparison of Aarong with few Competitors in the Market
 Aarong 125

Aarong has a competitive advantage over its competitors considering a lot of

different aspects. Only a few companies can pursue the same sort of competitive
edge like Aarong did. However, when compared to competitors such as Rong,
Anjans, Kay Kraft, Banglar Mela, and others, they lag behind in some areas,
particularly in terms of price. People frequently allege and complain that Aarong's
items are pricey, and they frequently cannot understand why. Although Aarong
provides higher quality as it is a luxury brand, middle class families of Bangladesh
still prefer low cost products with a medium quality.
Aarong was also concerned about a possible inflow of international retailers,
particularly those from India, which had more commercialised operations and
cheaper production costs. Furthermore, online shops (such as bdhaat.com,
HutBazar.com, and khubsurti.com), which could be sourced from anywhere, were
becoming extremely competitive.
Aarong has also entered the international market. Aarong went abroad in 1986
and firmly established its export customer base among Fair Trade groups in Europe,
North America, Australia, and New Zealand, inaugurating it with an initial order
from Traidcraft, a UK-based fair-trade organisation, and given its roots as a social
entrepreneur. The majority of exports (85%) were in the Fair-Trade business,
which accounted for around 5% of total sales. Aarong was promoted through
taglines and promotional materials that recounted the tale of Aarong and the social
and financial benefits it gave to craftsmen which made it a praiseworthy figure in
the international market.

Turning Points of Aarong

Turning Point 1: Expanding Market Horizontally

Opportunity: Absence of an Indo-western Fusion Clothing Line for Young

Women
Aarong was a household name for traditional wear but they had little options for
the growing urban generation of women, who were more inclined to western wear.
One of the greatest impacts of globalisation was on the existing fashion industry.
Thus, the brand faced fierce competition from international fashion brands and
local shops catering to their demands. Western wear did not complement the very
theme of Aarong which was reputed for sticking to the roots and representing
Bangladeshi heritage and it was losing a major proportion of customers who looked
for office wear and western outfits.
126 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Response: Establishment of Taaga

Aarong decided to launch its first sub-brand, Taaga, in May 2003. This was just
like taking one step ahead for a longer run. Since its inception, it has received
much popularity and has become the must-have brand amongst the fashionable
women in Bangladesh. In Bengali ‘Taaga’ means a certain style of nakshi stitch
and thread. The primary design concept of this segment is fusion and the Taaga
pattern is western cuts and fittings. At Aarong, Taaga refers to an exciting line of
tops, kurtis, skirts, pants and accessories designed exclusively for the urban young
women. The fine distinction of Taaga products is that it blends western style with
Bangladeshi motifs, patterns and textures. From handloom, crushed cottons, denim,
fine linen, silks to sheer muslins, Taaga exhibits a huge range of fun and exciting
day and evening wear. Recently, Taaga has launched its own line of accessories
which includes leather bags, sandals, wedges and beaded woven belts. Aarong has
managed to differentiate this sub-brand by launching a number of campaigns
intertwined with the products and overall theme. One of the most popular
campaigns of Taaga was the break free campaign which symbolised that ladies can
be free whenever they want. Taaga's recent campaign, “Guilty Of” depicts how
society often criminalises women’s basic rights and fights against patriarchy. It was
launched on Women’s Day this year and received widespread attention on social
media platforms. During this year’s Valentine’s Day, Taaga launched an incredibly
special offer for its customers which was valid till 14 February, 2022. The top
shoppers within this time won a complimentary couple dinner with their valentine
at Radisson Blu, Dhaka. Lastly, they launched this year’s Eid collection under a
special campaign called “Sehri Under The Stars”. The event was open every
weekend and offered several activities to the visitors, along with lucrative
discounts on products.
In order to connect with the young customers, Taaga frequently launches its
staycation programme. It collaborates with Wander Women, the largest female
traveller community in Bangladesh, and asks participants to share pictures wearing
any Taaga outfit. The top winners are determined based on the highest number of
post reactions and are offered stays at popular resorts across the country. This not
only leads to subtle marketing of the products but initiates conversations regarding
the sub-brand among a wide range of potential customers.
The website also has a separate section for blogs and look-books where
customers can browse through fresh styles and fashion trends. Furthermore, the
Club Taaga is a brand loyalty programme and a membership scheme to
acknowledge regular and loyal customers of Taaga. The mission is to strengthen
the rapport with the existing and potential customers by providing the best
 Aarong 127

customer service. Through this programme, loyal customers will get the privilege
to earn redeemable loyalty points on their every valued purchase.

Result: Successful Customer Acquisition

The brand has successfully captured the market of young buyers and they now
present western attires with a tint of traditional motifs. Their popular items include
regular workwear, leather goods and formal shoes. In a nutshell, Taaga has helped
redefine Aarong as a smart shopping complex that pays heed to all needs. This
success can be highlighted by the fact that this sub-brand contributed to 2.5% of
the entire revenue generated by Aarong in the previous fiscal year.

Turning Point 2: Launching E–Commerce Services

Opportunity: Potential of Connecting with Customers beyond Physical Stores

The fashion industry will be flourishing in the next 10 years. The current
statistics of Bangladesh support the fact that the disposable income is growing.
There has been a steady rise of a stable middle class with greater purchasing power
and rapid urbanisation across the country. The fashion savvy youth population is
also looking for options to suit their daily needs. All of these will contribute to the
growth of retail. Since physical outlets are not enough to engage customers, a
brand needs a prominent web presence to process orders and work with customers
beyond geographic borders.

Response: Launching the Aarong Website in 2014

On 16th July 2014, Aarong’s website was launched nationally. It was one of the
first organisations in Bangladesh to bring western website design to eastern
audiences by providing a high-class user experience. They placed all their products
on their site and their main motto was to reach internationally (Min, 2015). Last
year, the website was further updated as the brand began shipping online orders to
Australia, United Kingdom and the United States of America. Customers can now
browse the respective country web store catalogue to place an order for shipment to
their available shipping destinations. If international customers intend to place any
order for shipment to Bangladesh, they can also continue to log onto the
Bangladesh webstore. “We have targeted non-resident Bangladeshis for export
opportunities. We are continuously receiving requests from them, via social media
and other ways, that they want Aarong products in their countries,” said Tamara
Hasan Abed during an interview.
128 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

The brand is striving to improve their users’ online experience. They would soon
be displaying the stock of their outlets on the website, under an initiative called
omni channelling. This would bridge the online and offline user experience into
one seamless customer journey. In future, customers would be able to order online,
pick up in-store, or order out-of-stock products and have it delivered to their homes.
Their app would provide all of the information of a product including information
on the craft, the artisans, and the sustainability of the materials used.

Result: Immense Popularity among Users

Shifting to a virtual medium has been a great step towards market prominence
and the brand can now serve customers even beyond the scope of a retail
showroom. A major section of Aarong shoppers are Bangladeshis residing abroad
because they wish to represent the culture and heritage of the motherland within
their attire. E-commerce has facilitated the rapid growth of the brand and is
regarded as a blessing for international shoppers. The website currently processes
around 300-500 orders on a daily basis.

Turning Point 3: Serving a Niche and Exclusive Clientele

Opportunity: Absence of a High-end Product Line

Aarong was gaining popularity as a brand specialising in mass production of
Bangladeshi crafts and heritage. In doing so, it was missing out a chunk of
exclusive clients who preferred customised, tailor-made and unique attires. This
group of high-end shoppers was not aligned with the brand’s theme of making
fashion accessible and affordable. With an increase in GDP and overall economic
boom, this elite group became a stronger voice in shaping the market and was
closely intertwined with setting fashion standards. It was also observed that the
expensive merchandise is the prime choice of Aarong’s loyal customers. The
marketing research team has found out most of the female customers are looking
for unique and exclusive collections for a premium price.

Response: Establishment of HERSTORY

Following this dilemma, the brand decided to launch HERSTORY on 13th May
2018. HERSTORY by Aarong became an exclusive designer line for women. By
blending modernity with time-honoured artistry, this line brought the fine artisanal
craft of Bangladesh into sophisticated couture. The meaning of HERSTORY is the
story of artisans. Most of the HERSTORY attires are hand embroidered and
 Aarong 129

stitched and the name indicates each stitch in a fabric conveys stories of happiness
and sadness of an artisan. This is how it creates an emotional attachment between
an artisan and a consumer. A designer of HERSTORY said, “This is couture wear
and will not be offered in several copies; those who buy the single piece, will do it
because they can identify themselves with the particular style, cut, motifs or stitch.
They will find their own stories transcribed into fashion with this particular style
line,” (Chowdhury, 2017). In order to maintain the exclusivity, HERSTORY
products are only available in the Gulshan and Banani outlets. Aarong employed
several marketing tactics which include, but were not limited to, the following.

1) Fashion show: This was the first of its kind by Aarong.

2) Website: An individual tab for the new sub-brand allows easy navigation.
3) Introduction of Logo: To differentiate this from Aarong, they introduced a new
logo. Also, a tag for clothes and a stylish shopping bag was introduced to
represent HERSTORY as a premium brand.
4) Above the Line marketing (ATL): Renowned magazines like “Weekend
Tribune”, “Lifestyle” covered the news of HERSTORY in their weekly feature.
They also used digital screens where models wearing HERSTORY clothes were
displayed and customers could pre-order products if they liked any of these.
During the Fashion Show, there were few booths where Aarong officials were
taking pre-orders.
5) Below the Line marketing (BTL): For the Fashion Show, Aarong only invited
their premium customers, based on their My Aarong Rewards Card, to attend the
show. The brand sent SMS, email, phone calls and invitation cards to each
customer.
6) Through the Line marketing (TTL): The fashion show was streamed live on
Facebook. In Chittagong, they booked Hotel Peninsula and arranged a special
Facebook Live to introduce this premium brand among the customers.
130 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Figure 6
HERSTORY corner at Gulshan Aarong

(Source: STUDIO MORPHOGENESIS LTD)

Outcome: Better Market Coverage

HERSTORY has been a great addition to the brand as it attracts some of the
most sophisticated group of buyers. In the previous fiscal year (2021-2022), the
brand generated around BDT 3-5 crores of revenue, making a good head start.
Since this sub-brand targets premium buyers, it has also been successful in
generating awareness about the entire concept.

Turning Point 4: Establishment of Taaga Man

Opportunity: Absence of an Exclusive Clothing Line for Young Men

During a recently conducted market research by the Aarong team, they
discovered that they were unable to capture the value of young male customers
who generally shopped for work wear and business casuals. Aarong, being the
pioneer of traditional wear, was losing out on some major revenue due to
unavailability of suitable products. Consequently, male buyers only came to the
brand for festive purchases.

Response: Establishment of Taaga Man

Taaga Man was founded in 2018 to cater to the youthful millennials of urban life.
It is a unique assortment of current fusion-wear which primarily opts for
contemporary designs. Taaga Man wants to change the way men dress as the sub-
brand caters to the fashion tastes of the younger generation with a trendy
 Aarong 131

assortment of apparels, footwear, jewellery, and other accessories. During an

interview with The Daily Star, the head designer explained how they wanted to
create something that would be a voice for the youth. “Our designs follow global
trends, especially taking inspiration from London Fashion week. Then we
customise it for our country, adding a touch of tradition for the perfect fusion
wear,” (Khadija, 2018).

Outcome: Successful Customer Acquisition

The brand has successfully captured the market of young buyers and they
present formal attires with a tint of casuality. Taaga Man has further helped
redefine Aarong as a gender neutral brand and this can be proved by the fact that
this sub-brand contributed to 1.5% of the entire revenue generated by Aarong in the
previous fiscal year (2021-2022).

Turning Point 5: Bringing a New Product under a New Sub-Brand

Opportunity: People Becoming Conscious about the Use of Organic Products

Nowadays, people are turning towards organic products more than ever before
because of its earth-friendliness, minimal chemical side effects, natural fragrance
and overall effectiveness. The hype for organic solutions is at a rise, and people are
embracing their origin – the Earth.

Response: Introducing Aarong Earth

Aarong rebranded its skincare product line as Aarong Earth, and launched a host
of new products, repackaged and redesigned some old products, becoming a major
contender in the local skincare market. Aarong Earth was launched in February,
2021 with the tagline “Discover Aarong Earth and come back to nature”.
132 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Figure 7
Aarong Earth Products

(Source: www.Aarong.com)

It is worth mentioning that the brand already had a popular herbal product line
and realised that there is a sustainable demand for herbal products in the market
and customers are willing to buy these products. Hence, the sub-brand commenced
its journey with 10 years of market research and 27 launching products offering a
wide variety of skincare solutions which includes handmade soaps, hair oil and
shampoo, body scrub, face wash, face mask, face pack and hair pack. Currently
they have 34 products catering to a diverse range of consumers the key ingredients
being not only fine age-old remedies such as turmeric, sandalwood, neem and aloe
vera, but also present-day herbal ingredients-based options like kaolin clay,
oatmeal and sea salt. All these come in a very handy package suitable for modern
lifestyle. The brand is also very careful to serve the customers with premium
quality products in an affordable price range. An entire research and development
team consisting of chemists and experts have worked and are still working to
produce the best organic skincare products in the region. The marketing strategies
of Aarong Earth included:
1) Sending text messages to the loyalty customers introducing new products.
2) Collecting customer feedback through feedback form and questionnaire and
incorporating them in new products.
3) Making their products available on the biggest beauty product platform of the
country "Shajgoj".
4) Organising products into customisable bundles, which make the best gifting
options.
 Aarong 133

5) Adding a new tagline and logo to differentiate the brand at the website and
garner attention.

Outcome: Successful Market Penetration

In an interview with Mr. Md. Tahsin Alam, Deputy Manager, Product
Development & Market Research, Aarong, our team came to know that, Aarong
Earth holds the credit for a 200% spike in the company’s revenue from herbal
products generating a total revenue of whopping 18 crore in its first year of
operation. One of the reasons the products have drawn attention from the get-go is
their unique, colourful and user-friendly packaging. Mr. Alam has been working
with this sub-brand since its inception and his words reflect how hopeful Aarong is
with this new project. As a very successful sub-brand of Aarong, this product line
is moving ahead with a clear vision. In upcoming years, Aarong Earth wants to be
the market leader, being the best regional herbal brand and to have separate outlets
also. Moreover, Aarong was already an established brand, so their position in the
market was secured with consumers' pre-existing trust and loyalty. Hence,
Aarong Earth got its ball rolling in no time.

Success Factors

In 2018, Aarong celebrated its 40 years of astoundingly successful operation as

the largest craft. organisation in the world. Over the past few decades Aarong has
developed in almost every criterion a fashion and lifestyle brand can thrive on.
Their sales volume and value, along with the number of outlets across the country,
have remarkably increased. They have introduced brand new product lines infused
with innovation, creativity and customer satisfaction expanding their target market.
Therewith, the brand has grown to be a household name among the urban
Bangladeshi people and also come a long way in empowering the producers and
artisans. The following figure illustrates the factors that have brought Aarong
where it is today.
134 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Figure 8
Success Factors of Aarong

(Source: Primary data)

Brand Image through Strong R&D and Unique Design

Aarong never used the marketing strategy of presenting itself as an altruistic
organisation. Rather it has attracted the customers by offering clothes, jewellaries
and crafts that are genuinely loved by the consumers (T. Abed, personal
communication, January 17, 2018). Behind the country's most iconic fashion and
lifestyle brand, there’s an arduous research and designing process. Aarong
preserves, upholds and integrates age-old Bengali motifs and patterns into modern
attire and accessories. The designs have been collected from across the world;
including from museums from Kolkata to Chicago. The intricate stitches we see on
the Nakshi Kanthas didn’t come into existence overnight. Over 132 outlines of
alpona (design) were assembled from different parts of the country. Even some
Bengali sweets and cakes have a very aesthetic composition. Such unobserved
sources didn’t go unnoticed by Aarong’s R&D department (Zaman, 2019). The
strength of extensive research and the capability to incorporate them into garments,
bags, tapestries and other accessories have put Aarong way ahead in the market;
because these collections have a separate kind of appeal among the urban
customers.
Jamdani, a cultural heritage and now a GI (Geographical Indicator) product of
Bangladesh, was one on the verge of becoming non-existent with only a limited
number of artisans involved with it. Aarong has done a remarkable job in restoring
and reinforcing the Jamdani industry. They have gone the extra mile in collecting
Jamdani designs from museums and reproducing them. Now almost 10,000 people
are working in the industry (Zaman, 2019). Jamdani saree has been proudly worn
 Aarong 135

by Bangladeshi female public figures in international major events. We have all

seen Bangladeshi actress Azmeri Haque Badhon grabbing the spotlight at the
Cannes red carpet wearing a stunning customised Aarong Jamdani Saree (“Badhon
wears Aarong Jamdani at the Cannes Film Festival,” 2021). Thus, Aarong has been
the flag bearer of Bangladeshi crafts in both the local and global arena.
In short, Aarong has branded its products and has invested in brand development.
They are not just a simple retailer, rather they control the design, production inputs
and outputs, and therefore the merchandising of the entire brand.

Figure 9
Bangladeshi Actress Wearing an Aarong Jamdani at Cannes 2021

(Source: Instagram)

For the past two decades Aarong has been conquering the local crafts market not
only by offering unparalleled quality of products but also by moulding and shaping
consumers’ especially the young generation’s choices around traditional attire.
Their one of the most popular and revolutionary product line TAAGA is one such
example where they have blended together traditional and western clothing trends.
Aarong was always one step ahead for playing the pioneering role in promoting
and preserving the rich heritage of Bangladeshi craftsmanship.

Locally Sourced Raw Material

Another reason why Aarong is thriving as a local brand is that all the fabrics are
locally sourced and are used to manufacture different types of clothes. Local
fabrics serve as cheaper raw materials and they also keep our cultural heritage alive.
136 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

To summarise, extremely low production cost enables Aarong to generate

reasonable profits. Due to their large workforce of around 65,000 artisans, they are
able to meet the high client demand.

Market Driven Production - Integration with Urban Fashion

Aarong produces clothes that are typically regarded as traditional Bangladeshi
attire. So they were missing out on a large target group who are more inclined to
wear Western attires for a long time. By launching TAAGA and TAAGA Man,
Aarong has blended traditional design with western attire and successfully grabbed
the attention of Gen Z. As a result, Aarong is now a go-to shopping place for
people from all age groups and genders. Aarong has entered the market of
everyday accessories, like utensils, masks, showpieces, and many more with their
unique design. Therefore, Aarong has become a household name for a plethora of
products used in the upscale urban society. Aarong’s products are developed based
on what the consumers demand, not simply based on what they can produce. They
align with market trends and design products accordingly.

The Hand-Made Appeal

Aarong has not only empowered the rural artisans by providing them work
opportunities but also utilised their talent in the fashion sector. Aarong was
successful in attracting the Bangladeshi consumers through this hand-made appeal
and also creating this appeal a part of the culture. Now people are more aware and
respectful towards the artisans and their work. In addition to that, the intricate
Jamdani or Nakshi Kantha knits are created by human hands is a matter of great
enthusiasm for the aesthetes both locally and globally. This appeal has been a part
of Aarong’s successful brand image as a handicraft and apparel manufacturing
company.

Greater Control Over the Value Chain

At every step of the value chain, Aarong strives to exert its control in order to
minimise costs and maximise profits. It primarily does this by ensuring the
following:
Extensive Retail Chain: Aarong has greatly benefited from their expanded retail
network which controls the customer experience and keeps loyal customers
returning.
Strong Inventory Management: Aarong is data driven and produces quantities
based on historical sales figures and produces or offload inventory carefully in a
planned manner.
 Aarong 137

Aarong’s manufacturing process operates in a production centre based model

which is an exceptionally efficient system for mass production. The value chain
that starts from the local artisans and ends at the retail outlets is decentralised and
involves a set of different entities like, designer, production centres linked to many
small subcenters, artisans etc - that work step by step to create a final product.

Spontaneous Engagement with Rural Artisans

The brand is not only creating value for itself but simultaneously enriching the
value for the thousands of rural artisans supporting their production. Aarong offers
fair-trade principles and ensure workers’ rights. Even the producers can receive
textiles on credit to ease their up-front costs of production. Aarong establishes
inclusive ecosystems that offer conducive environment for both producers and
consumers. Providing access to the market they ensure the sustainable livelihood
generation of the local artisans and have empowered them. As a result, the local
artisans are highly engaged and own Aarong spontaneously. This is a two-way
cycle as both parties continuously uplift each other in terms of goal attainment.
Aarong follows a scheme where 50% of their annual profits go back to BRAC
programmes and 50% is retained for Aarong’s expansion in order to serve more
artisans. The following figure illustrates its reinvestment mechanism for the social
purpose.
Figure 10
Social Mission at the Core of Aarong’s Business Model

(Source: http://www.brac.net/images/enterprise-cycle.png)
138 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

The development initiatives include several well-being programmes for their

artisans:
● The artisans have access to a health security scheme where they are given an
instant cash payout during an emergency.
● They receive a retirement benefit right after 5 years of service.
● They have the comfort of working from their homes, due to the decentralised
model.
● Aarong links their artisans to other BRAC development programmes including
gender awareness programmes, linkages to free legal aid clinics, and access to
microfinance savings and loan products.

As such, the welfare of the local artisans and the profitability Aarong go hand in
hand, and ensure Aarong achieves its dual-mission.

Challenges

Mechanised vs. Hand-made Production

Over the years, quite a few competing brands of Aarong have emerged. Their
manufacturing process is more mechanised; whereas most of Aarong’s products
have to be hand-made by artisans. So compared to other clothing brands, Aarong’s
method requires more time, more human energy and more money. But in order to
keep its unique essence intact, Aarong cannot switch to a mechanised production
method straight away. So they have to come up with a solution that increases the
efficiency of their production without harming the key factor why Aarong is unique.

Gradual Decline of Craftsmanship

The most important part of Aarong’s value chain is the extraordinarily talented
artists who stitch the designs, embroider the quilts (Nakshi Kantha), paint the
wooden or bamboo accessories and so on. These talented craftsmen are declining
in number because of growing urbanisation and massive cultural shifts in the rural
areas. Their children are not following the footsteps of their parents. Instead, they
are pursuing education and many of them are opting for more mechanised
industries to work at. In Bangladesh, underprivileged females are more drawn
towards working in garment factories which is the most profitable industry of
Bangladesh at this moment.
 Aarong 139

Recommendations

Almost every business in this era is evolving rapidly. Businesses are faced with
brand new challenges and their ability to constantly adapt with them has also been
amplified. Aarong however is no exception. They have sustained their position in
the market for decades and conquered multiple facets of the local fashion industry.
Nevertheless, they are not beyond challenges and scope of improvement. Here we
have brought forward some recommendations for the company.
In several steps of their production process, there are plenty of scopes for using
technology. Since the core art must be hand-made, departments like quality control
can be more technology dependent.
Although the product line HERSTORY has a unique charisma to offer, it entails
risk to some extent of its products not getting sold. To capture the high-end market
in a safer way, Aarong can introduce a “bridal special product line”. This particular
segment is still out of reach for local brands and Aarong has an excellent potential
to grab it.

Implications

Through this paper, we have seen how Aarong has transformed itself into a
successful sustainable social enterprise. On the one hand, Aarong has empowered
the rural women by ensuring their sustainable livelihood generation, on the other
hand, over the last few decades, it has turned into an international brand from a
small social project in Bangladesh. Drawing on this case of a successful social
enterprise based in Bangladesh, the academic implications as well as the
implications for the other enterprises and policy makers are discussed here.
Recent studies show a significant number of social entrepreneurs struggle to find
a sustainable revenue stream and make a living from their social venture (Austin et
al., 2006; Osberg and Martin, 2015; Sheppard, 2018). In fact, finding the right
balance between achieving social mission and commercial viability has been found
to be a common problem for social entrepreneurs (Bacq et al., 2016; Powell et al.,
2019) which eventually led most social enterprises across the world fail to sustain
(Jenner, 2016; Chichevaliev, 2021). The case of Aarong is a vivid example of how
the dual mission of a social enterprise can be achieved and how to make that
venture sustainable.
140 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

Aarong established an inclusive ecosystem that improved conditions for both

producers and consumers. They provided rural artisans, specifically women from
marginalised communities, with a sustainable source of income and made eligible
for a number of other development projects. Even though they put social purpose
before profit, they never gave up the intent of profitability and crafted strategies
like a commercial business to achieve their target. The case study shows that
launching a social enterprise doesn’t mean that you need to adopt a marketing
strategy of presenting your business as an altruistic organization. Rather, Aarong,
since its inception, tried to establish a positive brand image in the market like a
commercial enterprise. From its continuous research to customer centric product
development to market-driven product diversification, from usage of locally
sourced raw material to promotion of local cultural heritage, from offering quality
products at fair prices to catering a niche market of expensive western fashion
products, from introducing new sales channel to increasing the market horizon
beyond the border, represent Aarong’s relentless efforts to outperform its
competitors in the market. Eventually, Aarong, now, is the largest retail brand in
the country which operates in several countries and has successfully been able to
maintain its brand image over the decades. These strategies did not hinder Aarong
to achieve its social objectives alongside. It reflects that the managers in social
enterprises, for the sustainable growth of their enterprises, should incorporate
commercially profitable strategies, putting their primary mission of creating social
value at the backdrop. It would enable the social enterprises not only to overcome
its financial constraints but also to reinvest the surpluses for the social purpose,
turning itself into a sustainable social enterprise.
Again, recent statistics show that customers to a large extent prefer buying
products from those businesses that put social purpose before profit (Sheppard,
2018; Bersin, 2018) and this demand from the market is fueling commercial
organizations to change their business strategies (Bersin, 2018). Aarong’s business
model offers rich insights for those commercial enterprises willing to associate
themselves with a social cause besides maximizing profit for themselves.
The case offers new perspective to the policy makers into how their assistance
can be targeted to develop sustainable social enterprise and also to make
commercial enterprises jump on the wagon. Indeed, policy makers in many
countries are now developing an ecosystem to alleviate their inherent social
problems wherein the social enterprises have been prioritized (Chichevaliev, 2021)
considering them as agents for change in the society (Austin et al., 2006; Yunus,
2008). As such, the sustainability of social enterprises is vital for a better world and
 Aarong 141

Aarong’s business model can be replicated or adapted by enterprises based in any

other countries of the world which strive for sustainability.

Conclusion

This case is a brilliant example of how a social business can thrive despite
staying true to its founding values. Aarong today is not just a household name for
its unique clothing line but is synonymous to the development of thousands of rural
artisans who revolutionise fashion from the comfort of their homes. The brand has
successfully addressed the economic gap between these communities, and uplifted
marginalised communities specially women by providing access to employment.
The brand is a lesson in the making, and has the potential to inspire several fashion
brands both within and beyond national borders. The two major appeals of the
brand - handicraft and local sourcing - go a long way in developing Bangladesh as
a nation. While it keeps the rural craftsmanship lively, it also knows how to cater to
the changing tastes of urban customers. Lastly, social businesses across the world
face difficulties to develop a sustainable business model. This study also exhibits
how an enterprise can empower marginalised communities without compromising
on profits.

(Received November 10, 2022; Revised December 11, 2022; Accepted December 14, 2022)
142 ACADEMY OF ASIAN BUSINESS REVIEW, DECEMBER 2022

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