Dilip Kapur, President, Hidesign

From humble beginnings to becoming an internationally renowned leather brand, Pondicherry-based Hidesign has come a long way since its inception in 1978. In a freewheeling interaction with The Dollar Business, Dilip Kapur, President, Hidesign, tells the brand’s story and reveals the secret that makes Hidesign stand out tall amongst a plethora of big names in the market.

Interview by Neha Dewan | @TheDollarBiz

TDB: Hidesign – how did it all begin? What prompted its origin and how has the brand journey been so far?

Dilip Kapur (DK): When I came back from America, I wanted my creativity on a product. I was inspired by the cultural revolution in America, and started crafting leather bags as a hobby. In 1999 we started off in India and by 2006 the country had become the biggest market for us in terms of value sales. The difference between us and other manufacturers primarily was that we designed for ourselves and commanded a very different and unusual niche. We went back to vegetable tanning techniques which made our products look natural and lively. The colours also were distinct – very blonde – and appealed to many. Even though at that time others had already made the shift to chrome tanning, we were keen to carry on with vegetable tanning as it was more ecological and fitted well with our core values. We also changed our way of functioning when in India. While earlier we were selling through distributors, in India we sold directly to consumers via stores. That was quite a revelation for us! We got to know the consumer far better and had a sharper idea on what they were looking for. Suddenly we realised that people had started calling us a brand!

TDB: You were mostly exporting before setting foot in the Indian market in 1999. Over the last two years, the thrust has again been shifting to exports and newer geographies. What is the potential that you see for the brand in international markets?

DK: The international market has now become very vertical. The best companies integrate manufacturing, distribution and retail within themselves. We have now started going to countries where we see a great potential such as Asian countries which aren’t so saturated. Middle East, UAE, Bangladesh are some of the newer markets that we are firming up on. We have already started exporting to Portugal and Spain this year. Each market is different. For instance, consumers prefer more glamour in a market like Bangladesh, whereas the consumer preference is more sophisticated, elegant and less in-your-face in a place like Oman. Hence, as a brand we keep these key factors in mind based on the market where we plan to set up shop.

TDB: Where are Hidesign products primarily manufactured? At this point are you importing any raw material?

DK: We import raw hides from South America. Leather is all made in our tannery in Ranipet. Manufacturing is mainly done in Pondicherry where we have two factories.

TDB: What is your strategy for countering competition from other renowned international bag brands?

DK: We have clear values which our consumers relate to. We never do any copies – we just make Hidesign products with a clear value. Those who love uniqueness would always want to buy a Hidesign. However, it is also necessary to keep working toward a better product and to constantly innovate. People love innovation. Our consumers are more alternative and independent in thought – they would always want to be a part of something which is not mainstream.

TDB: The Indian leather industry has been continuously underperforming over the last few months. In fact, leather exports from India reported de-growth in Q3 2015. What do you attribute this underperformance to?

DK: The overall export market has not been very healthy. The international economy has been bad and the Indian leather industry has been a sub-contractor to other international brands. However, we as a company are seeing a change in this scenario by tapping new, unexplored markets and keeping our strategies in place.

TDB: Would you, at some point in time, consider setting up manufacturing facilities abroad?

DK: No, not really. We can control the logistics and production far better in India. Hence, it makes little sense to think of setting up such facilities abroad.

TDB: What part of your annual production is attributed to exports and do you plan to scale up this percentage in the near future?

DK: At present, 25% of our annual production goes to exports which is spread across more than 20 countries. While earlier we were more in the European markets, this year our focus is more on the Asian countries that have been untapped so far.

TDB: Are you satisfied with the current incentives provided by the government to leather exporters? What kind of policy interventions does the leather industry need to give impetus to exports?

DK: I think more than any incentive, the government should realise that brand building is far more important. Just by being a darzi to someone else, you don’t become a brand! Funds should be directed instead to marketing. We should be brand owners rather than brand contractors. Our advantages as Indians – being good at communication, exposure to diversity, our sense of service, etc. – need to be capitalised on in the right manner.

TDB: Louis Vuitton picked up a stake in Hidesign in 2007. You also tied up with the Future Group in 2009. How have these associations helped and what have been your learnings from them as a brand?

DK: The first learning has been that though you need to be independent, big brothers are indeed a big help! Louis Vuitton helped us hugely in terms of brand value. It is good to have good partners and it has been a great learning experience from both the associations.

TDB: Tell us a bit about your advertising ethos. Unlike other brands, you have consciously stayed away from a brand ambassador. Has that helped your brand in any way?

DK: We have always tried to be genuine. We did not want to relate to our consumers through a brand ambassador. Even if we would want someone, it has to be someone who could be involved with the brand at a deeper level. We are open to having an ambassador, as long as they can merge with the brand and its ethos.

TDB: What is your vision for Hidesign as a brand, and what is your strategy to achieve this vision?

DK: Our main vision is one wherein we continue to build credibility. If that is achieved, then everything else falls in place on its own.