Hidesign weighs in on the “It bag” stakes with eco luxury line

In 2007 there was a lot of media attention around Hidesign when French Luxury House Louis Vuitton reportedly bought a 26% stake in the Indian leather bags and accessories company, which differentiates itself though natural vegetable tanning and dying. This had the pink papers in a whirl of speculation asking the reasons behind a French luxury powerhouse investing in a relatively small leather goods manufacturer.

More eco minded pundits asked if it was LV making a strategic CSR investment to address concerns around sustainable luxury.

Others with an eye on Japan saw it as a bid to gain ground where brands such as US-based Coach were giving higher positioned brands a run for their money in Asian markets. Coach’s affordable luxury price positioning was dominating sales in department store spaces and soaking up a lucrative segment of aspirational luxury consumers. Analysts such as ESSEC’s Professor of Management Ashok Som  interpreted investment in Hidesign as a move by LV to create a brand with style and pricing that could compete with competitors like Coach in the so-called aspirational consumer market across Asia, especially in Japan.

After that not much more was heard of this investment and motives for LV’s investment in Hidesign.

When last week, almost five years on from the reported PE investment by LV, Hidesign launched its first line of designer luxury bags in Mumbai, the speculation about Hidesign being LV’s bid for a greater stake in Asian markets seemed much less tangible. Because in the meantime China became the big new luxury market for global brands and Coach ramped up its “price warrior” strategy accordingly, by 2011 gaining a reported 6% market share, raking in $300 mn in sales and expanding to 71 stores. It stayed strong in Japan with 17% market share of accessories. On the other hand Coach doesn’t have much of a presence or brand recognition in India.

For Hidesign, it now seems more relevant to talk about the importance of India as a luxury market, which is growing despite some serious infrastructural and regulatory obstacles.

Dipen Desai, brand manger at Hidesign stated that its market in India currently stands at 120 crore ($2.4 mn) annually, making up some 60% of its sales globally. Its doing well, but is keen to batten down the hatches, so to speak, with a ramped up range of luxury bags aimed at a key and growing market segment.

 

Hidesign has great brand recognition and is considered a homegrown Indian brand story.

Hidesign was founded by entrepreneur Dilip Kumar in 1978 and for more than two decades its sole market was international. It was only in 1999, that sensing the winds of change in liberalising India, Hidesign began expansion. By 2012 it was notching-up 60 stand-alone stores and almost 200 outlets across India. Hidesign differentiates itself on quality craftsmanship, natural tanning and dying processes. Designs often look “handmade”, with detailing such as wooden beads and laced leather seams, although its evident over collections in the past few years Hidesign is experimenting with more trend-led styling and branding.

For many women Hidesign, did and still does represent a loyal friend, symbolising the assurance of quality and the mark of middle class respectability, and most importantly it’s not too flashy therefore hitting the mark with the famous Indian middle class sensibility of thrift and inconspicuous consumption.

Brand repositioning

Yet in India, as global brand exposure is increasing and spending power rising, balance between affordable, premium and high luxury market segments has shifted enormously. Women with purchasing power to buy luxury bags are pairing Damier check Vuittons and logo patterned Fendis with salwar kameez and saris. There’s also a younger generation of brand aware consumers who brands are eyeing keenly.

In India, global luxury brands have not fared so well with apparel, which tends to be dominated by ethnic wear when it comes to big spending. Shoes and handbags however are emerging as new areas of luxury consumption for women, and many international luxury brands have stepped in with limited edition designs especially for the Indian market such as Bottega Veneta’s gold knot clutch, which retails at around 4 lakh ($8000).

Hidesign’s rationale for its new luxury range is because the Indian market is growing so rapidly, a crucial premium segment has opened up in-between the Rs 8000 ($160) average of its current lines, and the starting point of around Rs 40,000 ($800) for brands like LV and Gucci. The new premium Hidesign range is priced from Rs 8, 000 ($160) to 25, 000 ($500).

A flirtatious but classic design from the range

Its named after the Italian designer Alberto Ciaschini, who has worked for Hidesign since 2004. However this is the first time that a line has been aimed specifically at the luxury market and the first time Alberto Ciaschini name has been used in association with its branding.

Hidesign is aggressively going for the heritage stakes in a product offering which trumpets Indian craftsmanship yet uses the name of it’s Italian designer to brand it.

This may seem like a mixed message, leveraging  two different things at once. But this fits into the rather complex “mindset” of the Indian consumer. Where European brands have such cachet in India, it would seem that to compete, Hidesign are playing very safe in couching Indian craftsmanship in terms of Italian design.

The Ciaschini range is finished well with rich detailing. Bags fall into two distinct lines- firstly embroidered and beaded bags suitable for the all important Indian wedding and social events, pretty much hitting the ethnic-bling nail on the head. Secondly, day bags with detailing inspired by leaves and flowers. It would have been good to have formal options in workbags (I await the next collection)! Hidesign have undoubtedly created designs which have excellent craftsmanship and quality, especially when compared to some competitors, who offer logo printed nylon or canvas for the same price point.

Hidesign is in tune with the times, where many global luxury brands speak of a “return to values” in terms of craftsmanship, quality and less emphasis on logos after decades of mass diffusion. But Hidesign faces fierce competition from some of its international competitors, who leverage multi million dollar advertising budgets.

Hidesign will need to build on what it does best. Carving out its niche as the homegrown brand offering eco luxury bags will be a good move in the luxury bag market.