Hidesign targets unique East India Leather for premium products
“This kind of leather is unique. We are planning to launch a special limited edition line this November,” Hidesign founder and chairman Dilip Kapur said. The products will be priced higher than Hidesign’s current lines.
East India Leather, which received Geographical Indication (GI) status in 2008, is vegetable tanned leather produced by tanneries at Tiruchi and Dindigul in Tamil Nadu. GI status defines a particular product’s place of origin and gives an assurance of quality and distinctiveness.
Currently, East India Leather is very popular in countries like Italy and France.
Besides, the Puduchery-based leather products company has also launched a premium luxury collection Atelier Hidesign—made from ostrich and deer leather—priced considerably higher than Hidesign’s current product line.
“The challenge, today, is to stay relevant for the consumers without losing the core. There is propensity to spend more, especially by the loyal Hidesign users who now want to upgrade demand for these kinds of products that can be called affordable luxury products and are priced much lower than the imported luxury products,” Kapur said.
As part of its strategy to stay relevant in a market that has been swamped by e-commerce in the last couple of years, Kapur said, the company is planning to start offering made-for-you service for its loyal consumers by the end of this year. In this, Hidesign will custom-make each product specifically for individuals depending on their choices of design and leather.
“The logistics for this is complex. And there’s additional cost. We are developing the first such counter at one of our flagship stores that will be operational by the end of the year. We’ll expand this at a slow pace,” he added.
In the last couple of years, Hidesign has slowed down expansion in India that accounts for more than 70% of its revenue. “We had to. There are a few reasons. There aren’t many quality malls. Real estate in shopping arcades like Khan Market in Delhi has become way too expensive. Mindless expansion does not make any sense. On the other hand, e-commerce, initially, did make a dent. Over a period, we realized how to make e-commerce work in our favour. Now it contributes to more than 20% to Hidesign’s revenue,” Kapur said.
Going forward, Hidesign will focus on more boutique stores at airports. “We’ll be at all privately managed airports, and leave the ones managed by the government, for now. At airports, we get the right customers,” said the Hidesign founder. The company currently operates 73 stores in India, of which 10 are at airports.
The focus, however, will be on international markets, starting with airports in Singapore, the Middle East and Sri Lanka. “Brand stores will be established to ensure a better presence in these markets. In the past, we sold through distributors that essentially does not help in brand building,” Kapur added. The company now sells at Lisbon airport, and has closed down its outlets at Copenhagen airport. In the US, Hidesign sells through Amazon.
Hidesign, which was founded by Kapur in 1978 in Puduchery as a two-man workshop, has seen its revenue grow from Rs.11.3 crore in fiscal year ended 31 March 2010 to Rs.97.72 crore in fiscal year ended 31 March 2014, according to its filings with the Registrar of Companies. Kapur said its current revenue was at more than Rs.150 crore.
Leather goods industry in India is projected to cross $27 billion by 2020, from around $13 billion in 2014, estimated The Council of Leather Exports.
Increasing brand awareness among the Indian youth and rise in purchasing power of the upper middle class in tier-II and tier-III cities is expected to fuel consumer spending to more than $4.2 trillion by 2017, four times of what it was in 2014, helping retailers to grow, noted industry lobby Assocham and banking services provider Yes Bank, in a joint study released in January 2015.