President | 14 Oct 2008
The difference between our India operations and operations abroad is that in India it is largely led by exclusive stores, while internationally we do it through distributors who understand the local market. It is difficult to manage international stores sitting here in India. The Indian leather goods market is still hugely unorganised. There are a number of individual shops selling products made by individual craftsmen. There is regional competition, but no national competitors.
Born in Delhi, Dilip Kapur moved to Pondicherry, where he grew up in Sri Aurobindo Ashram. Later, he went to study at Phillips Academy, Andover, and Massachusetts in 1964-66. He did his graduation from Princeton University, Princeton, New Jersey, in International Affairs, and later went to University of Denver to complete his PhD in the same subject.
While doing his PhD, Kapur took up a job in a leather company. In that duration of nine months, he picked up the nuances of the leather trade and started experimenting with the hides. In 1977, he returned to India and lived in Auroville, a small township in Tamil Nadu. He started Hidesign as a hobby and was completely a one-man artisan shop. He has since led Hidesign to its current leadership position.
Kapur still teaches students at Auroville on International Affairs.
In conversation with exchange4media, Kapur shares his vision for Hidesign, its brand values and the intricacies of operating in a luxury brand market.
Q. How did Hidesign come into existence? How has the brand performed over the years?
Hidesign started as a hobby. After completing my education in America, I came back to India with certain other things in my mind. I liked the idea of creating designs for bags and began manufacturing leather bags. It picked up well and grew quite rapidly. In 1990, we started our first large scale production factory. Before that, we were selling only at stores abroad. We opened our stores India in 1999. At that time, our turnover in India was a mere 6 per cent of the total turnover, and now India accounts for 45 per cent of the total turnover.
Hidesign started out as a very strong brand for men and when we first launched in India, 80 per cent of our turnover came from the men’s products. The brand works extremely well for professionals and executives, both at work and leisure. However, the strongest growth has come from the women’s section, which now accounts for 50 per cent of the turnover.
Q. The ideal roadmap of a company’s expansion is that they start out in their country of origin and then expand globally. However, in your case you started your company abroad and later came to India. Why?
We make products that are international and very contemporary in style. When we were starting the company, there was no market in India for the kind of products we designed. We waited until India opened up to the world. And till that time, it was difficult for Hidesign to sell in India.
Q. Tell us something about your India operations. Who are your competitors nationally and internationally?
The difference between our India operations and operations abroad is that in India it is largely led by exclusive stores, while internationally we do it through distributors who understand the local market. It is difficult to manage international stores sitting here in India. Out of our 55 stores, 40 of them are in India, but the maximum chunk of turnover comes from our sales abroad through the multi-brand stores or department stores.
Talking about our competitors nationally, the Indian leather goods market is still hugely unorganised. There are a number of individual shops selling products made by individual craftsmen. There is regional competition, but no national competitors. Internationally, the competition comes from upper-middle Italian brands.
Q. What is the new brand identity that you are projecting?
The new brand identity is more luxury oriented and more feminine. However, the core values are still the same – that we are ecological and natural our manufacturing process, and still believe in high craftsmanship in modern designing.
The new brand image is more driven by luxury and exclusivity. The idea is to provide more and more fashion through latest designs. We have found that men buy products that are modern and have more functionality. On the other hand, women are more brand conscious and buy to look beautiful. We have experimented with different kinds of colours in leather. Colours like red or white symbolise class among women, unlike men’s accessories, where black and brown still sells.
Q. What is the USP of Hidesign?
As briefly mentioned earlier, firstly, we are always natural and use high quality materials to bring out their natural beauty. Good leather is always natural, while low-end leather needs to be painted or embossed to look standardised. Secondly, we are ecological and prefer vegetable tanning and use solid brass fittings and buckles. And finally, our products are made by skilled artisans that require a lot of work by hands.
Q. Louis Vuitton has acquired a 20 per cent stake in your company. What are your future plans with them?
The important thing to remember is that the brands are different from each other and they stay separate. There is a mutual aid agreement between the two, according to which, Hidesign will help Louis Vuitton set shop in India, and in turn Louis Vuitton will impart their experience of 150 years in technically improving our product quality and helping us grow internationally.
Q. What is Hidesign doing to enhance its presence internationally?
Internationally, we have started opening stores. This is a difficult job because you need to establish the brand in every market individually. We are increasingly pushing our products into markets which have high growth value. Last year, our highest returns came from Malaysia. We have presence in South Africa, Russia, and Eastern Europe. These markets have high growth rate and, of course, India is an important market for our growth.
Q. Who are your target customers?
Our customer would be anyone who is career-driven, globalised, cosmopolitan, who is well read and well traveled. We are targeting customers who are primarily in the 25-35 age-group, internationally it would be around 30-40 year old.
Q. What is the marketing and advertising strategy for Hidesign?
Our marketing plans mostly focus on our vision, the brand values and places where the aspirational feeling of carrying Hidesign bags could be highlighted. We do not communicate through mass media. We do on-ground activities, but again keeping in mind the identity of the brand.
All the adverting campaigns are done in-house. To spread the exclusivity and preciousness of the product, we have certain photographers who understand what luxury products are all about. That is why we have our advertisement shoots done in Paris to portray the values of the brand. All our campaigns show the warmth and sensuousness of the brand.
Q. What about your investment plans?
We are planning to open two new factories besides the one we have in Pondicherry, and 18 new stores in the next nine months. We are also upgrading the existing factory in Pondicherry with the collaboration of Louis Vuitton.
Q. What are your projection for Hidesign, in particular, and the leather industry in general?
We will continue the growth rate ranging between 15 per cent and 25 per cent ideally. Internationally, the leather market is largely oriented towards the West, which will not see that high growth rates. Though we will try to seek a larger piece of the Western pie, the primary growth will come from markets that are emerging in Asia and Eastern Europe.