Capitalising on the brand’s strength, Hidesign’s founder Dilip Kapur wants to see Hidesign as a more established brand in Tier I, Tier II and some of the Tier III cities in India, by setting up over 200 stores and up to 400 store-in-stores over the next five years
As the founder of Hidesign India Pvt. Ltd. (Hidesign), Dilip Kapur’s short stint while studying in the U.S as an intern with a leather factory for a few months gave him a different perspective about leather, which later became his lifelong passion. After completing his education, he returned to Auroville, Puducherry and started making leather bags. In 1978, Hidesign commenced operation with an investment of Rs. 25,000. “It was the money I saved from my part-time job in the U.S.,” recalls Kapur. What started as a hobby soon caught the interest of many people and he landed up with large orders. Until 1999, Hidesign’s products were sold only in the overseas market like Australia, Europe, U.K. and the U.S. “My understanding of lifestyle in India was minimal since I grew up in the U.S. My design sense reflected the cultural revolution in the U.S. in the late 60’s and 70’s, and it was easily accepted in the U.S., U.K. and Australian markets, among others,” recalls Kapur. But looking at the increasing demand from the domestic market, since 1999, he started selling in the Indian market and, currently, almost 65 per cent of Hidesign’s revenue is from the domestic market.
With such a modest beginning, today, Hidesign has a total turnover of Rs. 120 crore and has 67 exclusive stores in India and 12 international stores. During the 2011-12 fiscal, the company has grown by 24 per cent and expects to grow at the same rate this year too.
Building the brand
“Since I did not have education in business management, I was not aware of building a brand,” admits Kapur. However, he was clear about the basic essentials of the brand. He wanted the product to be unique and not a copy of any other product design. He wanted the Hidesign brand to reflect his belief in ecological practices, and therefore, used vegetable tanned leathers to manufacture the product. The leather is tanned in Hidesign’s own tannery to ensure least possible harm to the environment. The raw material for the tannery is mainly from India, especially from Tamil Nadu and Kerala. The rest is imported from the U.K., Middle East and New Zealand.
Founder : Dilip Kapur
Year : 1978
City : Puducherry
Turnover : Rs. 120 crore
Right from the beginning, Kapur was very clear that Hidesign’s leather would be distinct from the uniformity and synthetic flatness of what’s seen in the mass market. “It was almost like giving shape to my instinctive aversion to painted, patented leathers that lose all semblance of naturalness,” recalls Kapur. Learning from the centuries-old skills of tanning with natural seeds and barks, Hidesign has created fashionable leathers that age exceptionally well. Hidesign’s vegetable tanning uses extracts from the barks of Wattle trees and seeds of Myrobalan, a fruit-bearing plant species. This gives Hidesign’s leather a rich, nourished look and feel, and tremendous strength and durability. Hidesign’s leather is full grain (they have not been corrected to hide defects) with minimal colour or pigments to cover the leather’s natural beauty. “The feel, the look and smell of our leathers is sensuous and natural,” shares Kapur.
Setting up the infrastructure
While Hidesign was growing at a fast pace, its infrastructure at that time did not support this growth. “Since we did not have a factory, we kept hiring one house after the other, each one larger than the last. We had huge infrastructure problems with the houses being inadequate to produce quality products,” says Kapur. The company finally built its factory in 1990. All Hidesign bags are manufactured in-house. It has four factory units – one in Baddi, Himachal Pradesh and three in Puducherry. It produces about 18,000 bags (for both men and women) per month and about 25,000 pieces of accessories per month. With the rapid expansion of Hidesign stores across India, its production capacity is always stretched to its limits. “However, our work is handcrafted and cannot be produced in mass,” shares Kapur.
The brand strategy
Hidesign is positioned as an affordable luxury brand. “Luxury in our eyes is an experience. It promises exclusivity against mass manufacturing,” shares Kapur. The handcrafting of Hidesign maintains the unique identity of its product, and the ambience of the stores reflects this custom-made atmosphere. This identity with a sense of exclusivity is only possible at this price point in India.
The brand has essentially not changed since it started. Its core values are still the same – natural, ecological and innovative. The changes that take place only reflect the changing lifestyle of the customer base. The female customer base of Hidesign has increased from 20 per cent to 60 per cent. “We are more in tune with Asia, especially India, as Indian market has grown from six per cent to 65 per cent,” shares Kapur.
Hidesign’s marketing strategy is to always build the brand, rather than just promotions. “Our campaigns are always brand building campaigns that communicate who we are at the moment, in the life of the brand,” shares Kapur.
Hidesign’s ideal product launch strategy is one that combines the talent and the aspirations of everyone within Hidesign and communicate that to their customers. This reflects in the new designs as they express their views on the changing lifestyle and the same communicated through the company’s advertisement campaigns, public relation activities, in-store promotions, social media and its website. “Events such as fashion shows are not very important for us. A well-coordinated launch is clear in its message and expresses newness through the brand’s identity,” shares Kapur. Hidesign creates four major collections every year but parts of new collections come into the stores every month. “Every season reflects our mood. It is a reflection of how we feel and how our customers feel,” says Kapur.
In 2007, Louis Vuitton (LV) invested in Hidesign. “The relationship between LV and Hidesign is one of friendship and mutual help, and not one of a venture capitalist investing in another company to exit in a few years,” shares Kapur. LV, which currently holds a 5 per cent stake in the company, offers Hidesign technical and business advice, as and when required.
In 2009, Hidesign tied up with Future Ventures to launch Holii, designer bags inspire by India, which is stepping into its seventh season now. As the Indian market matures, Hidesign’s positioning has become narrow as the brand follows contemporary international lifestyles of young, career-driven customers. The company believes that the Future Group, with its strong innovative energy rooted in the Indian psyche, is an ideal partner for this adventure in creating a truly Indian brand. The production continues to grow well and these bags are presently available in 70 locations across India.
Understanding the consumer
The brand understands the growing demands of the consumer in various upcoming regions of India. In March 2012, the ‘Alberto Ciaschini-handcrafted by Hidesign’ luxury collection has been launched in select Hidesign stores across India. This new collection marks the debut of Hidesign in the luxury arena with limited edition day and evening bags for women. This luxury product is on average three times the price of a Hidesign product. “It is still tough to tell how extensive its success will be. But it continues to grow rapidly and we expect it to contribute about 10 per cent of our revenue next year,” shares Kapur.
The company also plans to launch sunglasses, which is expected to be available in the Hidesign stores from October 2012. “This launch indicates a move in Hidesign’s positioning from a leather goods brand towards a lifestyle brand and opens up options available to a Hidesign customer, who espouses the brand values,” says Kapur.
Hidesign is expanding its market by capturing exclusive and strategic retail spaces across all major metros and airports in India. It is also targeting smaller towns (Tier II and Tier III cities) that display a growing consumer profile. By the next year, Hidesign aims to have over 100 exclusive boutiques in India alone. Over the next three to five years, Kapur wants to see Hidesign as a more established brand in Tier I, II and some of the Tier III cities in India, with over 200 stores and 300 to 400 store-in-stores. He expects a steady growth of 20 per cent to 30 per cent every year and wants to establish the brand in more Asian countries. With its core values intact, Hidesign is all set to enter lifestyle segments such as sunglasses and shoes, and reach its classic contemporary designs to a larger audience.
- It is expanding its market by capturing exclusive and strategic retail spaces across all major metros and airports in India
- It is targeting smaller towns (Tier II and III cities) that display a growing consumer profile
- It plans to launch sunglasses, which is expected to be available in the Hidesign stores, from October 2012
- By the next year, Hidesign aims to have over 100 exclusive boutiques in India alone
ON A LIGHTER NOTE
Most unforgettable moment
Several! My first day in the U.S. as a scholarship student when I was 15-years-old. The first time I saw a cheetah chasing a zebra in the Serengeti. First time a Hidesign bag was displayed in a large upmarket store abroad (John Lewis, Oxford street, London).
Favourite holiday destination
Beach number 7 at Havelock Islands, Andaman.
Anything from across the world that is strongly ethnic and homemade.
Loved watching (Movie)
The English Patient
Taking long walks in the forests of Auroville with my dogs and swimming in the sea.
Most valuable lesson
From the Bhagavad Gita, ‘Try your best and don’t worry about the results’.
Inspiration for designs
Lifestyle changes in contemporary young executives and beauty that surprises us in different ways
Steve jobs as an innovator in my work life and the great people I meet.
Advice to budding entrepreneurs
Be unique and innovative