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July 12, 2016
Anshul Dhamija, Forbes India
Bengaluru, 12 July 2016
Dinesh
KS loves the wilderness. And, as an avid mountaineer (he is a certified
instructor in climbing and mountaineering), he always found it easy to
be close to it. But, in 1990, he suffered an ankle injury which
hindered his treks. Dinesh was forced to find another way to stay in
touch with his passion. By 1993, he had figured out how: The then
32-year-old Bengaluru resident started to design tents and backpacks,
which were manufactured in the city’s industrial hub of Peenya. “I
would shop for buckles, zippers and other accessories, fill up my bags
with the raw materials, and then ride to Peenya [on my motorbike]. I
would spend the whole day there, teaching tailors how to stitch [these
products],” recalls Dinesh.
This was at a time when access to such products in the country was
limited and, therefore, expensive. In fact, the better quality ones
were available across the border in Thamel, the commercial
neighbourhood in Kathmandu, the capital of Nepal.
Dinesh started small—it would take at least five years before this
little venture would become Wildcraft India Pvt Ltd—in 1993 and
produced only five to 10 products a day. He would sell them from a
friend’s garage in Bengaluru’s southern residential suburb of
Jayanagar. Dinesh estimates that he sold between 2,000 to 3,000 units
per annum. And he made next to nothing, he says. “It [the money] was
like change, so let’s not go there. But I did get a kick out of doing
it,” says the 55-year-old. He then adds, laughing, “Kicks were coming
from other places also. My parents were always ready with those because
all my classmates were in the US and doing well.”
Things were to change, though, especially after 2003, when the company
would get its focus right, and move to products from services (more on
that later). “Till then, we didn’t even think of it as a business. It
was a hobby,” says Gaurav Dublish, co-founder of the reinvented
Wildcraft, who joined full-time with his college friend Siddharth Sood,
both 40, in 2007.
It certainly isn’t a hobby anymore. The outdoor products brand reported
retail sales of Rs 300 crore in FY16, having clocked a CAGR of over 60
percent since 2007. (The company did not disclose profitability
numbers.) It sold over 2 million products in the year including
backpacks, rucksacks, sleeping bags and tents, cheaters and jackets,
and footwear. From the garage it started selling from in 1993,
Wildcraft products are today available in 120-plus exclusive stores and
over 2,500 multi-brand stores across 400-plus Indian cities.
What has helped in achieving scale is an investment of about Rs 70
crore for an undisclosed minority stake by Silicon Valley-based venture
capital fund Sequoia Capital in 2013. There has been no follow-up
equity investment since. “The company has grown 3x plus since the
investment and has strongly positioned itself as a full-blown outdoor
brand across gear and apparel with footwear being added as well,” says
GV Ravishankar, managing director, Sequoia Capital India Advisors.
It has been quite the journey, then, for Dinesh. Born and brought up in
a middle-class family in Ranchi, he had moved to Bengaluru in 1978 for
his Pre-University Course (PUC). After that, he obtained a degree in
electronics engineering from RV College in the city. The wilderness was
never supposed to have been part of the plans, but here he is, fuelling
others’ wild dreams.
Friends In
Deed
“When Gaurav and I joined, the revenue of
Wildcraft was lesser than the salaries that the two of us earned,”
recalls Sood, who had quit his job at GE in Singapore in 2007, and
Dublish his at Standard Chartered in Dubai. However, their association
with Dinesh and Wildcraft began earlier, in 2000. Back then, besides
making outdoor gear, Wildcraft India had a robust services business.
This included organising river rafting expeditions at Dandeli, located
in the Western Ghats in Karnataka, and conducting outdoor learning
programmes for children and corporates, as well as some consultancy
services. This constituted 75 percent of the company’s overall revenues
at the time.
Sood and Dublish had taken a trip to Dandeli in 2000 and, having
enjoyed it, started helping Wildcraft run its services business in
their spare time. Between 2000 and 2003, both Sood and Dublish moved
from the periphery to getting invested—financially and operationally—in
the company’s product business. “We didn’t have any office. All the
fights and arguments used to happen at one of our places,” remembers
Dublish, now seated in the third floor of the three-storey Wildcraft
India headquarters in Bengaluru’s southern suburb of JP Nagar.
In 2003, even as Dublish and Sood were both embarking on international
assignments in their respective jobs, they convinced Dinesh to give up
his job at the National Outdoor Leadership School (NOLS) in Wyoming,
US, and devote all his time to Wildcraft. (For at least six months in a
year, Dinesh worked as a climbing instructor at NOLS. In his absence,
an accountant-cum-inventory manager oversaw operations.)
Around this time, it was also decided that Wildcraft would let go of
its services business and focus on products. “The three of us were
convinced that we need to take the product route. So the guys who were
associated [and invested in Wildcraft earlier] moved out and took the
services business with them,” says Sood. The company took up a 700-odd
square feet office space opposite its earlier garage setup, and hired
tailors. It opened four retail stores across the city in the key
suburbs of Jayanagar, Cambridge Layout, Malleswaram and Rajajinagar.
“We had tied up with vendors who would tap into Korean and Taiwanese
suppliers. In 2006, we started sourcing directly,” says Dublish. The
business required significant working capital. For a turnover of Rs 50
to Rs 60 lakh, Dublish says, “we used to pour in Rs 30-40 lakh of
capital to sustain it because the demand was not outstripping [supply].
And that capital was coming from the three of us.” Annual sales for
Wildcraft averaged around 10,000 units then.
Those were also the years of “armchair entrepreneurship” for Dublish
and Sood. And even though Dinesh ran the show, for about three to four
weeks in a year he would take off to the mountains. This setup needed
to change.
The
Confidence Game
In 2007, Dublish and Sood decided to come back to
India and spearhead operations. It was around the time that Dinesh, who
oversees design and product development, was looking for more personal
time to explore mountain ranges in India and abroad. Also, “there were
question marks on the survival of a design product-led company. At that
time, entrepreneurship was still not as fashionable as it is today,”
recollects Dublish. But nothing deterred their entrepreneurial spirit
or their belief in Wildcraft.
The trio put forth a clear vision for the company: To build the largest
outdoor brand in India. While Dublish and Sood settled into their roles
of leading marketing and sales, and finance, respectively, Wildcraft
began hiring its first set of designers. “Consumption of backpacks as a
category wasn’t there. But we believed that the category had a future
in this country, and we clearly saw an opportunity,” says Sood. And
they were right: The backpack has come to be the company’s largest
selling product, considered to have a multi-utility appeal in urban
landscapes such as workplaces and schools. An internal assessment by
Wildcraft shows that 80 percent of consumers use the backpack for daily
commute, while 20 percent carry it for the outdoors.
Also, the overall Indian outdoor gear market is estimated to be over $2
billion in size, and their confidence in being able to tap into that
has held the company in good stead. As Ravishankar of Sequoia Capital
India Advisors says, “In the beginning, we were not convinced on
whether the Indian market had evolved enough to accept the outdoor
positioning the company was building on. But every time we met them, we
got more and more convinced that this was a special team, who, with
their unique insights about the Indian/Asian consumer, had a strong,
long-term focus on building a leading outdoor brand out of India.”
Arvind Singhal, chairman of Technopak, a leading retail, textile and
apparel consulting firm, has a different perspective. He puts Wildcraft
in the category of “being a niche player which has become successful,
another example being Fabindia”. Adds Singhal, “Over the years,
Wildcraft has built up very strong capabilities in product development,
manufacturing and sourcing. That has been their strength.” But he is
not convinced that such niche players have the ability to grow and
become ten times the size and scale they currently are at.
Ravishankar, though, is confident that Wildcraft’s business can be
scaled to Rs 1,000 crore “over the next few years”. “We aspire for
Wildcraft to be a truly global brand out of India. And they have taken
baby steps in that direction,” he says. In fact, the company has begun
to distribute its products to international markets such as the UAE,
Saudi Arabia, Oman, Qatar, Singapore, Malaysia, Indonesia and Taiwan.
Climb Every
Mountain
Competition for Wildcraft comes from all quarters: Sportswear brands, international sporting goods retailers such as Decathlon, traditional luggage makers such as Samsonite and American Tourister which now offer backpacks, lifestyle brands such as Fastrack from Titan, as well as other outdoor players like Woodland and Timberland.
“Their biggest external challenge comes from brands with
deeper pockets that can push ahead with market penetration more
aggressively, including the sportswear giants, as well as retailers
identifying the category as one where they can undercut brand margins
through private labels,” says Devangshu Dutta, founder and chief
executive of Third Eyesight, a retail consultancy firm.
But Dinesh isn’t fretting over potential rivalries. The best outcome he
had hoped for was “doing business which would give me time and money to
pursue activities.” And that is exactly how his story is playing out.
On the one hand, he has the bandwidth to follow his passion: In 2008
and then again in 2011 he climbed some of the Himalayan mountains in
Ladakh that stood at 6,600 metres. Mount Everest, which is at 8,848
metres, has never excited Dinesh. “For some people, height matters, but
not for me. The challenge is in the kind of routes that you climb,” he
says. His next target is to explore the mountain ranges on the eastern
side of the Karakoram.
When he is not in the mountains, he helps the 20-odd member Wildcraft
design team in product development. This is of no lesser joy to Dinesh.
As he points out, “When we started, the garage was our manufacturing
unit, head office and retail outlet. And now we’re looking to be
counted among the best in the business globally. I’m confident that our
best years are ahead of us, and outdoor-lovers are at the heart of this
confidence.”
Either way, Dinesh seems to have it all—wild dreams are made of this.
(Published
in Forbes
India)
