Style — all who have it share one thing: originality – Diana Vreeland
The estimated size of the handbag market in India is pegged at ₹7,000 crore, out of which the branded ones contribute about 10 per cent, i.e. ₹700 crore. Hidesign currently has a market size of ₹160 crore. To increase its market share by 25 per cent, where the industry is growing at 15 per cent, it has to enter into other products as well as cater to other customer segments.
Bajla Shafha
Shivani Barnwal
In doing so, Hidesign cannot dilute its image of being an eco-friendly company that offers premium leather products. So, below are the set of solutions that will help Hidesign achieve the above-mentioned objectives. The new products will be women’s leather jackets, boots, satchels, college backpacks and gift combos for men. The target group for its products will be in the 18-65 age group, which constitutes around 60 per cent of the country’s population. We are suggesting an endorsed brand ‘Modish’ and a sub-brand ‘Hidesign Couture’.
Growing the brand at 25 per cent in India
The current market of Hidesign products is ₹160 crore. We have the following recommendations to grow the brand at 25 per cent:
~ ~ Hidesign bags in Lifestyle stores : As per our calculations, launching Hidesign bags in Lifestyle stores will lead to increase in revenues by ₹1.5 crore.
~ ~ Gifting for men : Looking at the footfalls and sale of women’s and men’s products, Hidesign can channel the sales of men products through gifts. They can offer gift combos for various occasions for men, such as birthdays, Valentine’s Day, Father’s Day, International Men’s Day, farewells, and so on, targeting men in the 25-65 age group.
~ ~ Jackets for women : There are very few players in the Indian market, such as Tommy Hilfiger, that cater to leather jackets and boots for women, and even they are not popular enough among the target group. Hidesign can focus on this market, carving out a niche for itself with its premium Hidesign Couture brand (explained below).
~~ Transit retail : Hidesign can offer its products in five-star hotel courtyards, increasing its transit retail options
~~ Tie-ups with apparel stores , such as Van Heusen and Allen Solly: Hidesign can sell formal shoes, laptop bags, etc., in stores that sell formal business wear, so as to complete the look for the professionals.
Positioning strategy for lower-priced segment
Hidesign should enter the lower-priced segment using an endorsed brand name to market a mass, albeit premium brand. The brand will be named ‘Modish , brought to you by Hidesign’. This endorsed brand would retain the quality assurance associated with the parent brand but will appeal to the younger population, with its tagline of being affordable while also ‘trendy, fashionable and functional’.
This would include products such as college backpacks and satchels for both men and women that are made of leather but, instead of being professional and boring, will be trendy and quirky, so as to cater to the age group of 18-25, which comprises more than 20 million university students in India.
Synthetic leather bags
Considering that Hidesign currently positions itself as providing pure leather hand-crafted bags, entering the synthetic leather bags category may result in a brand dilution. At present, a large number of local small and medium sized players are present in the Indian synthetic leather market, along with manufacturers from Bangladesh; this may lead to price competition and thus loss of Hidesign’s competitive differentiation.
Bags and wallet form a very small segment of the country’s synthetic market and, hence, manufacturing these products will not be profitable for the company.
Different brands for various markets
Hidesign should adopt a multi-brand portfolio strategy, offering different brands in different markets. Offering multiple brands will enable the firm to garner more purchases from variety seekers as well as gain a foothold in niche segments of the market.
As explained earlier, Modish will target the modern young Indian, providing a range of bags for daily use that are quality-assured, stylish and good-looking. The Hidesign parent brand will be portrayed as accessible luxury with formal product offerings for working professionals.
Apart from this, another premium brand, named Hidesign Couture , will be launched as a flanker sub-brand, targeting the niche customers who are looking for elite products that are also stylish. Specific needs, such as women’s leather jackets or branded leather boots, for which the market in India issmaller , will be fulfilled. Also, shifting Hidesign’s Atelier collection into Hidesign Couture will provide a better brand linkage.
(The winners are in the second year of their PGP at IIM Indore.)