Business | Retail

Leather goods-maker exploits online sales channels for growth

Company seeks to increase brand visibility in the virtual world

  • By Manoj Nair, Associate Editor
  • Published: 00:00 January 18, 2012
  • Gulf News

Kaizer Federal
  • Image Credit: Oliver Clarke/Gulf News
  • Kaizer Federal, the man behind the Kaizer brand of leather goods and accessories, at the company’s store in Dubai Festival City. It has been good going for a brand that has been there only since 2002 as a label targeted at corporate and institutional clients and made a move into retail as recently as 2009.

Dubai: The web's potential to spread the word is starting to put a nice sheen on the prospects of Kaizer, the leather accessories brand owned by a UAE-based company. The promoter now believes that having got a feel of the online world, the brand can do a lot more to retain its visibility.

"We finalised a deal last week with an online shopping portal in the US whereby our products will be part of their Valentine's offers," said Kaizer Federal, managing director of Kaizer Leather and Accessories. "We had earlier been shortlisted and the deliveries will be done by the end of the month.

"This is our first exposure to online commerce and what it does more than anything is raise the brand awareness going into new markets and for a wider audience."

What Federal does not say is that this is being achieved without the need to generate marketing hype — and at a steep cost — around the brand. For mid-sized businesses such as his, that works out to be a huge plus. It is also a lesson that other local companies can absorb to quicken their exposures to new markets.

Not that Federal had planned on any of this. "What we had hoped for is to make a gradual impression in the export markets," he said. "Now, we hope to go big this year itself."

Good going

Plans this year include taking the brand into the US, Russia and the African markets. Good going for a brand that has been there only since 2002 as a label targeted at corporate and institutional clients and made a move into retail as recently as 2009.

"We would approach prospective corporate clients and make enquiries about their budgets for gift items," Federal said. "If we won an order, we would then create designs fitted around the budgets and send these to tanneries in Italy with which we had associations."

The company — which launched operations with Dh1 million — also provided the packaging for a client list that included banks and travel agencies. The product range would be co-branded to feature the Kaizer imprint as well as the client's identity.

"Like all start-ups, we have had our share of hiccups during the first year of operation — things eventually settled down," Federal said. "Our turnaround happened during our second year of operations.

"The preliminary research clearly pointed out that Kaizer could fit into a niche where we can offer the quality of the premium brands but at the same time price our products aggressively."

But a vital piece — a dedicated retail presence — was still missing. "Retail was important because our clients wanted to know what our product range would get in a retail setting," Federal said. "In other words, they wanted to compare prices and how the brand would fare in the retail space.

"For us, too, it made sense to get into retail at some stage, both as a new revenue stream and as a means of developing awareness about the brand beyond our core audience.

"We soon found it was not as easy a progression as one would have thought — in our line of products, mall managements prefer brands that have been there for 50 or 100 years."

It was in 2009 that the entry into retail was effected, through a store in Dubai Festival City. Retail now represents 30 per cent of revenues, but Federal still sides with caution when it comes to expanding further.

Currently, Kaizer's main lines feature small leather goods, handbags as well as travel luggage. Future expansion plans might see it "experimenting" with leather apparel. "Today we offer everything from classic leather articles to the ‘bold and eccentric' that would appeal to the young at heart," Federal said.

Italian connections

While sourcing the primary leather from export markets such as India or Pakistan could prove to be less costly, Kaizer Federal does not intend to sever his Italian connections.

"All our leather and leather products are from small family-owned factories that have been in the business for three generations, if not more, from in and around Florence," Federal said.

"For instance, one of the factories has been tanning and producing their own leather for nearly a century. It is a deep-rooted family tradition where right from selection of the wet leather to the final tanning is done by hand.

what to do
  • Never play around with the quality parameters.
  • The nature of some businesses tends to be capital-intensive. Be adequately prepared for that.
  • Never shy away from taking to new selling platforms even if you do not have sufficient grounding in it. Learn on the fly.

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