History Hidesign started in 1978 as a one-man artisan workshop for leather bags and jackets.

From the beginning, Hidesign has been an international company, distrib ting nder its own brand name across the world. !oday, Hidesign has o"er 18## employees, staffing its man fact ring nits, company tannery, and b ckle factory. Hidesign sells leather bags and garments nder its own name in $ stralia, %reece, &ndia, 'ew (ealand, )candina"ia, )lo"akia, )o th $frica, the *nited +ingdom, and the *nited )tates. &t also works closely with some of the best known leather and fashion companies in the world to prod ce nder their brand names. !hese incl de, $rmani, -arlboro, .ock /' 0l e, -a riti s, .eplay, 1he"ignon and .edskin. Concept Real leather Crafted the Forgotten Way To discover the finest leather, we went back to traditions that are centuries old vegetable tanning in pits and wooden drums. This tradition has been discarded by other tanneries as too time consuming !vegetable tanning takes "# days whereas chrome tanning takes a week$, but brings to the leather a rich and beautiful patina that only improves with use. We take special care to avoid the e%cessive use of pigments, binders or lac&uers that make leather virtually indistinguishable from synthetic material. 'ur oil tanned ranch leather, for e%ample, is very lightly dyed and then covered only with natural oils. 'ne with (ature) *ecause of chrome tanning, leather tanneries are often considered to be among the worst industrial polluters. +round the world, areas surrounding tanneries have turned to wasteland, and underground water has become too poisoned to drink or use for agriculture. ,egetable tanning, on the other hand, has for centuries co e%isted with thriving agriculture and densely populated communities. -n fact, history has shown that vegetable tanning is beautiful, safe and economic. Target .roup The successful, upwardly mobile young at heart with a strong sense of independence *etween /# and 0# years old *elongs to a high income household Travels fre&uently and internationally *uys &uality products that have lasting value 1ooks casually fashionable but never gaudy 2as a strong commitment to nature and ecology .oal and Commitment To become a leading leather label for bags and garments designed for work, travel and casual wear. To offer the finest &uality by using traditional skilled craftsmanship at an affordable price. Craftsmanship of the -talian 3asters 3aking 2idesign bags and garments re&uires special skills. 'ur products are 4constructed4 not 5ust stitched. 6i% workers carefully put together each product with glue, and then take it through several critical and labour intensive steps which even the -talian masters have given up as too time consuming. These include double stitching all gussets, folding or binding edges to prevent wear and tear and to strengthen the bag, and attention to small details such as knotting and matting down all stitching ends. 3ore than .ood 1eather 7ntil a few years ago, we, like everyone else in the industry, used 8inc alloy buckles and fittings which were electroplated in brass colour. Though ine%pensive, these turned out to be too brittle for our heavy leathers. 6o we decided to use only solid brass fittings9 in addition to being stronger, these also give 2idesign bags our distinctive rugged, natural look. 2owever, we were surprised to find that the :uropean saddlery tradition of solid brass buckles was fast disappearing, and we could not find suppliers able to produce the &uality

and &uantities we needed. That is why we opened our own buckle factory, where more than forty workers sand cast each item in fine river sand, and then take it through eight stages of hand polishing. The process is identical to the one used for over ;0## years to produce traditional -ndian bron8e sculptures.

*ally, *ottega ,eneta, Coach, Fendi, .ucci, 1ancel, 1ongchampone famous name contributed by) after another swept into <ilip =apur>s view as he strolled through the 2ong =ong -nternational +irport>s 6ky3art. =apur could already see in his mind>s eye what would soon be the newest addition to this shopper>s paradise the e%clusive fashion store that his leather goods firm 2idesign planned to open in mid /##?. 6i%teen years earlier when he went into the business full time, =apur did not dream that his company would one day bid to become one of the first brands from -ndia to succeed in the global fashion marketplace. (ow 2idesign>s international e%pansion was picking up momentum, and its president and founder =apur wondered how best to move forward in building a truly scalable brand with global reach.

The growth of Hidesign <ilip =apur was born in (ew <elhi, where his 2indu parents had fled from what would become @akistan in the mass movement of people following the end of the *ritish Ra5 in ;A"B. From the age of five he lived in @ondicherry, a former French colony on -ndia>s southeast coast, before moving to the 7nited 6tates at the age of fifteen. +fter graduating from the elite @hillips +cademy in +ndover, 3assachusetts, one of +merica>s top private secondary schools, he attended @rinceton 7niversity. 3a5oring in international affairs and economics at @rinceton>s Woodrow Wilson 6chool of @ublic and -nternational +ffairs, he earned a bachelor>s and master>s degree, then went on to pursue a @h.<. at the 6ocial 6cience Foundation, part of <enver 7niversity in the 76 state of Colorado. +fter four years in <enver, =apur>s fellowship money ran out, and he spent a year working for an +merican company that made and sold hand bags. 3eanwhile, however, his thoughts returned to -ndia, specifically to the e%periment in international living at +uroville , not far from @ondicherry. 3irra +lfassa, born in @aris in ;CBC to an :gyptian mother and a Turkish father, was deeply influenced by 6ri +urobindo, a prominent -ndian nationalist who became a spiritual leader in @ondicherry in the early twentieth century. +lfassa 5oined him there in ;A/#, organi8ed his followers into an ashram in ;A/?, and in ;A?C founded an international township pro5ect at +uroville. 6et up as a collective dedicated to human unity and international understanding, +uroville was established as a city where people from all over the world would live and work together to foster peace and harmony. =apur, who had grown up near the ashram,

returned to -ndia in ;ABC to live in and help build +uroville, serving on its development and planning council. +uroville>s atmosphere was meant to encourage culture and the arts, and =apur began making leather bags as a hobby, drawing upon what he had learned in the 7nited 6tates. 2owever, =apur did not like the look of normal leather, which seemed to slick to him. 2e saw some samples of leather that had been tanned using traditional methods of soaking the hides in vegetable e%tracts, and liked the different look this gave the material. =apur visited :ast -ndia Tanning, a center for vegetable tanning about D## kilometers from +uroville, learned the art, and began producing a line of leather bags with a distinctive look that people liked. *y ;AC?, several hundred people in +uroville were working with him to make and sell bags using vegetable tanned leather. The activity e%panded gradually to the point where in ;AA# =apur established a bag factory in @ondicherry and became a full time businessman. E-t slowly grew up from a hobby, and when it became a serious thing, it was a total surprise to me, because - was completely anti business,F he recalls. EWhen - started, - had to learn what a bag was9 - had no business background and knew nothing about them. - talked to people and learned from them, and it became a more interesting business. 'riginally, - designed and produced bags. 'nce - started 2idesign in ;AA#, - had to conceptuali8e who - am producing for, why they are buying bags, and how to communicate that to people.F 3ost of 2idesign>s initial customers were foreigners who spotted the bags while traveling in -ndia. 6ays =apur, EThe first order - got from from a .erman organi8ation in -ndia that had a catalog9 their manager saw my product, loved it, and bought it. 6maller buyers kept coming through, amateurs who liked the product, began buying it, and sold it in their countries. The story was always the same9 someone liked the bags, bought them, and sold them to stores in their territory.F

=apur chose to emphasi8e

workmanship and design, making beautiful, affordable bags. B#G of the manufacturing was done by hand9 craftsmen carried out labor intensive steps such as double stitching of pressure points that had been abandoned our automated in the West. 2idesign set up two wholly owned tanning establishments near Chennai to maintain control over the &uality of its leather. Where most other bags used plated metal fittings, =apur insisted on solid brass. 1ow -ndian labor costs meant that in foreign markets, the bags could be sold in the upper middle price range despite their emphasis on fine, hand made details. 2idesign bags were typically sold overseas in a price range between H;/0 and H/## !in /##? prices$. This represented a markup of 00# ?##G over factory cost. Typically, the wholesale price for a bag was C0G over the landed costs in a foreign country, and a standard retail markup was in the vicinity of /"# /0#G. 2idesign was viewed as a product out of the mainstream in its e%port markets, carried by e%clusive distributors who built something of a cult following within each of their geographies. 1eather and luggage shops were wary of carrying an -ndian brand, so 2idesign products were typically sold in stores with more of a fashion emphasis. + 2idesign bag won the I+ccessory of the JearF award from a *ritish maga8ine, which gained the firm much visibility, and department stores began picking 2idesign as a supplier. 6uch famous merchants as 6elfridge>s, the 2ouse of Fraser, and

Kohn 1ewis started carrying a range of 2idesign bags, which significantly increased the -ndian manufacturer>s sales while building much more awareness overseas of its style and &uality. <uring the ;AA#s, the product mi% changed from "0G of sales from branded goods to A0G of sales. -n /###, =apur decided to begin opening its own chain of e%clusive bouti&ues across -ndia. 6ays =apur, EWe looked for a distributor but we couldn>t find one that was appropriate. 3odern retailing was 5ust starting in -ndia, so we decided to open our own store in @ondicherry. -t was successful, so we opened stores in *angalore and 3umbai and kept growing.F 2idesign bags were also offered at premium -ndian retailers such as 6hoppers 6top, The *ombay 6tore, and Westside, though the highest volume outlet was a national chain of book stores. E-n -ndia, we are the most e%pensive leather bags in the country,F =apur says, even though the average markup from the factory gate was about //#G and prices were about half of those for the same bags sold outside -ndia. E-f foreigners come in, however, we will become an upper middle class brand, instead of an upper upper class brand as we are now.F =apur was pleasantly surprised how well 2idesign>s bags sold in -ndia, despite their positioning at the high end of the market. *y /##?, the firm owned D0 stores in -ndia and had announced plans for ;B more . <iversifying into retail changed the nature of the business, much as moving into foreign department stores years before had signaled a new era for 2idesign. =apur e%plains) The nature of the business changed9 we had to become more planned. We had to achieve real clarity on who we are and what we want to do, and we learned afterward that is what brand e&uity really means. 'ur product was a reflection of who - was, someone who had grown up independent minded and environmentally conscious. The bag rebelled against the slick, formal offerings that were then in the market. -t also reflected the culture - had grown up in. The best ad5ectives to describe us are natural, pure, and individualistic. + typical 2idesign retail customer was well educated and typically was a service industry e%ecutive. 0DG were age /0 D0, D#G D0 "0, and ;#G over the age of "0. 0" 00G of customers were women, and handbags were the biggest selling single item. 2idesign drove traffic to its stores via

advertisements in higher end print media and e%tensive public relations efforts. The eight fashion shows it sponsored

each year generated e%tensive publicity. ?# ;## articles about 2idesign appeared in -ndian print publications and the company was fre&uently mentioned on television as well. Hidesign as an international brand With the new stores in -ndia a burgeoning success, =apur decided toward the end of /### that the ne%t logical growth path for 2idesign would be building an international brand. 2e e%plains) We don>t want the number of stores to grow much more than D#G beyond what we now have or are building, so we would like to grow across countries. We can only afford to build our brand abroad via e%clusive stores, not more advertising. 'ur e%isting distributors are not concerned because the prime targets for our retail stores are not in their territories. 'ur biggest sales through distributors presently are in the 7=, +ustralia, 6outh +frica and the 76. We chose as prime targets locations such as Russia, 2ong =ong, China and the 3iddle :ast, because they are regions with high growth, room for a new brand to break in, relatively reasonable rental costs, and distribution costs that are manageable in comparison to the final price of the goods. =apur was approached by a 7= firm with e%perience in franchising, and in /##D announced the formation of a 5oint venture with them called 2idesign .lobal, aimed at developing an international franchising model. 2idesign .lobal produced a brochure and an international concept store for an e%clusive 2idesign outlet, aiming to form a series of 5oint ventures where the local partner would own 0;G of each store and 2idesign .lobal the rest. 2owever,

franchising did not take off. 6ays =apur, EWe have not been very successful with that model because the brand is not well known.F

The first e%clusive 2idesign bouti&ue outside -ndia opened in +ugust, /##" in a "## s&uare foot space in <ubai>s newly opened 6ou& 3adinat Kumeirah shopping mall. This first step abroad brought home to =apur how challenging international growth can be. 2e e%plains) This was the easiest to do of several 5oint venture possibilities we had. We were often approached by people who were interested in opening 2idesign stores overseas, but a person who was already working in a company in <ubai approached us right after we had decided to open our own stores outside -ndia, and we made the mistake of going ahead with him. 2e was doing local retail there and seemed to have local knowhow. We didn>t want to send someone from -ndia to run the store because we lacked local management capabilities and knowledge. We gave our partner ;0G of the business but he didn>t put in his own money. 2e was very unprofessional and we ended up trying to control the store from head&uarters in -ndia, which we learned we cannot do. 2idesign had better luck when working with firms it already knew well. -t bought D#G of the shares of its Russian distributor in order to strengthen their finances and drive the

business faster, and by /##?, 2idesign had five e%clusive bouti&ues in 3oscow and one in 6t. @etersburg. -ts 6outh +frican distributor ran into some financial problems, so 2idesign bought "#G of its e&uity, and with renewed financial strength there its sales grew rapidly. + distributor in 6weden opened a store at the .othenburg airport in early /##? that showed strong initial results. -n /##?, 2idesign also signed agreements to open new stores at the airports in Copenhagen and in 2ong =ong. The 2ong =ong store would be opened by a new 5oint venture for China established with Ray Chan, the former account manager for 2idesign at the firm>s Chinese distributor. -n Kune, /##?, 2idesign restructured its operations in the 3iddle :ast by bringing in a new partner for its 5oint venture there. <ubai based retailer Kashanmal (ational Company, which operated stores in several parts of the 7nited +rab :mirates, bought a 0;G stake in a 5oint venture targeted at building sales in the .ulf area, 2idesign 3iddle :ast, with the -ndian firm holding the remaining "AG. =apur hoped that Kashanmal>s e%perience distributing brands such as <ior and *urberry would accelerate the growth of the brand. *y mid /##?, there were two 2idesign stores in <ubai, with a third store planned for <ubai and a fourth in +bu <habi. -n addition, Kashanmal intended to open e%clusive 2idesign shops within its e%isting department stores. 2idesign was present in ;C countries, but =apur thought the firm had yet to settle on a model for international e%pansion that would scale well. 2e comments) :very country is an individual case. We sell C### bags per month in the 7nited =ingdom, but in @aris nobody knows us. -t is not easy for brands to cross over cultural lines. -f you are successful in +ustralia, that doesn>t mean you>ll be successful in -ndonesia. 6ince our brand is not known internationally, each country is a separate independent e%ercise in brand building. *ecause we grew internationally through distributors, we sell under the 2idesign name but there are no brand building activities like advertising and public relations, which drive our sales in -ndia. Right now don>t know how many countries we will have to be in before we start being recogni8ed as an international brand. -t will be interesting to see when we start reali8ing synergy between countries.

*eing able to find the right 5oint venture partner was an important barrier to scaling 2idesign>s bouti&ues outside -ndia. 6ays =apur) We have only had success with people we have already known. -f - knew how to find and assess prospective partners, it would really help. -n 6outh +frica and Russia, the distributors were doing a good 5ob and we knew them9 we have never looked systematically and professionally for 5oint venture partners. We look for commitment and capability9 don>t think the financial angle is very important, because this is not a capital intensive business. With our lack of e%perience, we need a strong 5oint venture partner who can work independently with us to build the brand. We can>t micro manage from -ndia9 we tried that at first in <ubai because we figured that was close enough to -ndia, but it was a disaster. We can manage things centrally within -ndia, but not internationally. Conclusion *y mid /##?, 2idesign>s revenues were reported as being in the vicinity of C",### crores , growing at /0G per year. Within a few years, 2idesign would have penetrated all the likely locations it wished to occupy in -ndia, so international e%pansion would remain the key to growing this business. =apur and his .erman born wife Kac&ueline had opened two bouti&ue hotels in @ondicherry in /##" and /##0, and =apur had mused in the press that 2idesign>s 5oint venture in China might provide the right vehicle for the firm to diversify into apparel. 2owever, it was clear to the 2idesign president that accelerating the pace at which the firm opened stores abroad and establishing a truly international brand stood at the top of his leadership agenda. -(6:+< +lumni Fund @rofessor of :ntrepreneurship, <irector, Rudolf and ,aleria 3aag -nternational Center for :ntrepreneurship and <irector, Di ,enturelab