The Mainstreaming Of Fair Trade: An Analysis of Market Opportunities for Cambodian Fair Trade Handicraft Producer Organizations

Abstract

The Fair Trade Movement has evolved from small organizations directly importing handicraft products from economically marginalized producers in developing countries, to an alternative economic system operating in both alternative and mainstream market channels. This thesis analyses the process of going mainstream, i.e. the increased operating of Fair Trade organizations in conventional market channels, using results from a research carried out in the Cambodian Fair Trade handicraft sector. A sample of 24 handicraft producer organizations has been taken, of which only one organization is Fair Trade certified. In order to determine whether the other organizations comply to Fair Trade standards, each organization has been rated according to the 10 WFTO standards. On the basis of these ratings, all organizations were found to comply to Fair Trade standards. With regard to current mainstreaming, organizations are still unable to enter and compete in the mainstream market. The cause for such economic underperformance can be found in the high socio-economic impact, in the positive sense, of the organizations. It is argued that in order to be able to compete in the mainstream markets, organizational structure should be changed in such a way that organizations will lose their current defining characteristics. If entering the mainstream market comes as such a cost, it is doubtful whether organizations are willing to do so. It is also argued that, as is already happening in the Cambodian Fair Trade handicraft sector, dedicated Fair Trade producer organizations can take on the fairwashing problem by entering a niche market, given that they find a way to inform potential consumer about the high socio-economic impact of the organization.