The aso oke industry is buyer-driven: transactions begin when a buyer approaches either a weaver or – much more often – an intermediary to place an order. Orders for the fabric are usually bespoke and placing an order involves negotiating the buyer's design requirements: such things as the pattern and colours of the fabric, its consistency, and finishing. This negotiation will involve the weaver being called to meet the intermediary and/or buyer.
Once the design has been agreed upon, a sample of the ordered fabric is produced and presented to the buyer for approval. Approval leads to the negotiation of the terms of the transaction including order quantity, delivery dates, and price. A deposit is then paid by the buyer which serves to both seal the trade agreement and provide initial capital for producing the order. Payment of the deposit therefore marks the beginning of the production stage. Raw materials are purchased either by the intermediary or – infrequently – by the weaver and the fabric is woven to the buyer's specifications.
An aso oke order tends to be completed in batches; these batches are delivered to the buyer as they are completed and (depending on the size of the order) deposits for future batches are collected at the time of each delivery. The balance payment for the order is collected when the final batch of fabric has been delivered to the buyer.
From this basic process description, we can then draw out the three main stakeholder roles related to the industry:
Buyers: the buyer is the individual that commissions an order. They may be the final individual consumer or, in the case of a group wishing to wear similar clothes for a ceremony, a representative of those final consumers. They almost always deal with an intermediary rather than dealing with a weaver directly.
Producers: like buyers and intermediaries, weavers were both men and women. Some weavers work on their own but others are grouped with a hierarchy of master-weaver and sub-weavers. It is the master-weaver who interacts with the intermediaries or buyers, and who organises fulfilment of orders via the sub-weavers. Sub-weavers have typically been trained – or are being trained – by the master-weaver.
Intermediaries: intermediaries act to promote trade by providing access for buyers to producers and vice versa, by generating alternatives when initial requests prove unworkable, and by developing and negotiating trade agreements. They are normally responsible for paying for the raw materials. They also act to monitor the contract as it is fulfilled, particularly the progress being made by the weaver, the quality of cloth delivered, and its fit to originally-agreed design.
In addition, there are suppliers who provide the raw material for aso oke – thread. Occasionally, the weavers may buy directly from them. More often, though, the intermediary would purchase thread, sometimes allowing the weaver to pick it up on their behalf.
As discussed in more detail below, these stakeholders are geographically somewhat dispersed and so travel is central to the aso oke supply chain. Weavers travel to intermediaries to see if they have orders; intermediaries or their representatives travel to weavers to deliver orders or to summon weavers for a meeting to discuss orders. Weavers and intermediaries travel to each other and to buyers to check design requirements and design approvals. Intermediaries and weavers travel to check availability of, and purchase, thread from suppliers. Intermediaries travel between weavers and buyers to check or report on progress, and to communicate and resolve any emergent issues or changes during fulfilment of an order. Journey distances were not great – normally within the boundaries of a single state and perhaps a maximum 200km return distance. However, they could still be long in time terms because of high traffic density in urban areas, infrequent taxi/minibus departure times, and poor state of the road surface.
As a result, trade within the aso oke sector has developed the characteristics that are typical of developing country micro-enterprise supply chains. It is slow, requiring an order months ahead of the planned ceremony and needing many days for any interactions regarding changes or problems to resolve which, as one interviewee reported, was frustrating: "There is little discipline in the industry and a general impatience; people seem to want the fast way out". It is costly, with the buyer ultimately having to pay the cost of journeys and intermediation, and with income for weavers being squeezed down.
And it is risky. Actors were able to relate stories of accidents or other misfortunes related to travel. But other, more intrinsic risks were also present. The nature of information asymmetries – particularly the buyers' lack of information – and the knowledge that there was a low probability of repeat purchases from buyers meant opportunistic behaviour arose. Interviewees cited examples that included overcharging for an order, using poor quality thread (raw materials) in weaving the cloth, and making the cloth of shorter length and/or width than is standard. However, there were also examples given of buyers or intermediaries under-paying for orders, relying on their greater power than weavers, and on the lack of likely contract enforcement through law.
The intermittent nature of orders makes for a "feast or famine" type of model, which fell particularly hard on weavers because of their lack of capital reserves. As a result, as one interviewed intermediary saw it, "weavers never say no" and accepted orders even when they lacked the time and/or skills to satisfactorily complete them. There were thus examples mentioned of weavers missing their delivery deadlines – highly problematic where the clothes were for a specific occasion. At the most extreme, interviewees reported supply chain participants absconding without delivering on their part of the contract – weavers failing to deliver ordered textiles and intermediaries or buyers failing to complete payment of orders placed.
The actual prevalence of such behaviour was unclear but, in any case, it was the perceptions of such behaviour rather than their actuality that had two effects. First, it increased the importance of trust and reputation, and the need for constant interaction along the supply chain to both reassure and monitor the parties involved. Second, the circulation of such stories reduced the overall reputational capital of the aso oke sector. Combined with the slow and costly nature of trade this perceived risk was seen to lead buyers to turn to alternative sources, such as purchase of "off-the-shelf" ceremonial attire through more formal retail outlets.
B1. The Structure of Trade
The aso oke supply chain is characterised by the importance of intermediaries. In part, intermediaries have arisen because they have access to capital that other players lack. They can obtain credit from thread suppliers or can themselves pay the supplier, allowing a full order to get underway before the buyer has paid. They thus can act as financial buffers given the time delays during an individual order between first purchase of raw materials and final payment for the finished product. They also help by holding inventory until it can be sold, say when excess fabric has been mistakenly ordered by a buyer or mistakenly produced by a weaver. They thus help the market to function where it might otherwise not due to shortages of working capital.
However, intermediaries have also emerged because of the informational aspects of the aso oke supply chain. Aso oke is a heterogeneous occasional good defined by idiosyncratic tastes. The majority of buyers/consumers therefore suffer from information absence or uncertainty. They do not know enough about the product or how it is traded to make what they feel are sound judgements on where to find weavers, how to differentiate weavers and their products, what types of design are feasible to produce, and on the terms of transaction including price. As such, they will readily approach intermediaries who do hold this information. They will continue to rely on intermediaries during the transaction process because they cannot observe – without high cost – the actions of producers and – crucially – because even if they did observe those actions they would not necessarily have the knowledge to be able to interpret them. Intermediaries charge higher prices than weavers but buyers saw this as worthwhile given the resultant lower transaction costs and greater certainties in trading including the greater certainty of a good-quality product.
Likewise, the majority of producers/weavers also suffer from information absence or uncertainty. They do not know enough about the location and design preferences of potential consumers. Because of the association of the product with specific occasions, there is also a lack of formal marketing/sales channels, such as shops, that might be approached. Thus producers, too, will readily approach intermediaries and also rely on them during completion of a transaction because the intermediaries can monitor the actions of the buyer; something that would otherwise be costly for the weaver.
Information failures have therefore shaped the structure of commerce in this industry to favour the emergence of intermediaries. That emergence is reinforced by the opportunistic behaviours and perceived risk of adverse selection that also arise partly due to those information failures. This means trust, reputation and monitoring are all important, and all of these are factors conducive to the existence of intermediaries who can act as the trust/reputation proxies for both weavers and buyers, and who can undertake knowledgeable monitoring of both weaver and buyer behaviour.
As a final point, structuring within this supply chain has some self-reinforcing effect. Information failures and lack of trust between producers (weavers) and buyers leads to the existence of intermediaries. Existence of intermediaries reduces the opportunities for flattening of asymmetries and creation of trust between producers and buyers.
In one sense, aso oke supply chains are localised – very few stretch across into a different Nigerian state because of the costs imposed by journeys. Within those states, though, the various actors are dispersed.
Production of aso oke is largely centred on small informal groups that are family/kinship-orientated and communal in nature. This results from the passing down of weaving skills to younger generations through family or community ties; a practice that has resulted in particular geographic areas in south-west Nigeria being associated with weaving.
Buyers are – as might be expected – distributed in relation to centres of population. They tend to interact with intermediaries or weavers who are relatively closer rather than relatively farther, but interaction would typically still require a journey. Some orders come from distant parts of Nigeria or even from overseas, making a journey by the buyer prohibitively costly. In such cases, they use kinship or friendship networks to identify a representative nearby who acts on their behalf.
The geography of intermediary and weaver locations appeared to relate to the level of trust and integration in the intermediary—weaver relationship. In some cases, weavers were found to work exclusively or predominantly for one intermediary. Those weavers were regarded by the intermediary as parts of an integrated but extended "organisation" that they controlled. Trust tended to be high and the requirement for physical journeys kept to a minimum. In such cases, the distance between intermediary and weaver could be 40-100km.
Where there was a looser or newer relationship between intermediary and weavers, distance could still vary but the preference was for it to be small. The extreme example was one intermediary who also designed clothes. She selected nearby weavers whom she could sit with during the production process. Only in this way did she feel she could verify the correct design, width and quality of cloth was being woven. Something similar also occurred in the "sitting with Nellie" process of learning by sub-weavers from master-weavers, where trust was being built through the learning process.
Despite variations, then, we can say generally that the weaker and less integrated the relationship between intermediaries and weavers that was observed, the greater was the use of physical verification as a monitoring mechanism, and the shorter the preferred geographic distance between the intermediary and his/her weavers. A summary is provided in Figure 4.
Figure 4: Pre-Mobile Geographic Distribution of Sectoral Stakeholders