Big Idea

Into the wild

Wildcraft has battled issues of scale to emerge as the market leader in the adventure gear space 

If necessity is indeed the mother of all inventions, then Wildcraft is one of its most industrious children. One of India’s few homegrown outdoors companies, Wildcraft was set up by engineer and adventure aficionado Dinesh KS and his group of friends in Bengaluru in 1992, a time when people with his interests and skill sets had not completely overrun the garden city. As an avid traveller, Dinesh has struggled to find quality gear that could support his expeditions, with expensive imported equipment being out of reach.

So, Dinesh decided to design his own range of rucksacks, tents and sleeping bags, which became so popular with friends and acquaintances that he quit his job with an electronics company and entered production full-time. Very soon, the business outgrew the garage office Dinesh had been operating out of, with manufacturing being outsourced. The company’s first official offering was a dome-shaped tent, though it shifted focus to its in-demand backpacks soon. Later, other outdoor gear such as rucksacks, sleeping bags, outdoor clothing and imported climbing hardware were also added to Wildcraft’s growing range. 

However, the struggle to scale up further continued to worry Wildcraft and its management up to nearly 15 years after its inception. Though there were blockbuster products among its offerings — like the tightly packed sleeping bags, which IT companies used to order in bulk for their employees each time Bengaluru faced a bandh situation — there was no clear roadmap for growth. The company faced an existential crisis in 2003, when Dinesh joined the US-based National Outdoor Leadership School as an instructor, splitting his time between the two countries.

A little later, two other original partners also resigned from Wildcraft, serving the fledgling company another blow. But the worst was over and soon afterwards, the company signed up two MBA grads to give the business an overhaul. Former Standard Chartered employee Gaurav Dublish and ex-GE employee Siddharth Sood took over and have been more or less running the show ever since.    

Setting up camp

Envisaged purely as a passion project, Wildcraft has — over the years — turned into an enterprise of repute. Though it barely managed to bring in ₹1 crore revenue in 2007, the company has grown its business over the years to touch ₹170 crore in FY14. It now boasts of a network of 120 exclusive retail stores in 55 cities across India. Of these, 100 are owned by the company and 20 by franchisee partners. But reaching this stage and scale hasn’t been easy, as it involved building the business category and ecosystem in a country like India.

Without the existence of an organised outdoor equipment industry, buyers were either forced to buy outdoors gear from adjacent industries such as sports or apparel or import from overseas. Dublish and Sood took this challenge head-on and immersed themselves in the business full-time around 2007-08. “We took it upon ourselves to shake things up and decided that if the category was nascent, we would give it structure and shape. Since the industry didn’t exist in India, it was very difficult for us to get the quality of the gear, design and price point right. So, we decided to develop the entire supply chain,” recalls Dublish. 

The duo invested in setting up a global supply chain, design team and in-house manufacturing unit. Today, the company has three manufacturing plants — two in Karnataka and one in Himachal Pradesh — that employ nearly 1,800 people; it has an additional 500 people on its rolls elsewhere. Since the duo worked the company’s structure bottom-up, Wildcraft has its own dedicated sales and distribution channels. That’s probably also the reason the company is in an advantageous situation today, feels Dublish.

“Not only are we now the segment leaders but we have also established a connection with our customers.” In December 2013, Sequoia Capital backed that connection by investing ₹70 crore for a 20% stake in Wildcraft. PE interest seems but natural when you consider that revenue is up from ₹100 crore in FY13 to ₹170 crore in FY14. What explains this growth? “Repeat visit numbers have been exceptionally good, with word of mouth giving a fillip to sales. The outdoor ethos of the company, our focus on functionally superior, exceptionally light, resilient and reliable products and a price point we think is right for the Indian market has worked in our favour.” 

The company has used this momentum to add around 31 stores in the past year and hopes to add 50 more each year. The company has managed to achieve the right mix when it comes to its product range of backpacks, rucksacks, tents, jackets, adventure gear and accessories, though the first two contribute nearly 60% to the its revenue. The single-biggest challenge the company faced was in fact getting the pricing right for its products in a price-sensitive market like India; Dublish says Wildcraft cracked the code by analysing its target audience.

“We realised that customers at both ends of the spectrum — the prosperous lot and the segment with the least disposable income — are equally value-conscious. Since we control the end-to-end value chain, we have the opportunity to predict the best price-value position. Having our own design development, manufacturing and sourcing set-up has also helped us find a sweet spot,” he says. 

Customisation is key

Another factor that has worked in Wildcraft’s favour is the fact that it has paid close attention to Indianising its product offerings, something unorganised players or importers never bothered to do. When it comes to performance product lines, body structures make a hell of a difference. “Indians have a very different body structure compared with Chinese, South Koreans or Europeans. If you want to assist them ergonomically, you really have to study their body structure and design your products accordingly. You also have to understand the terrain in which the product will be used,” says Dublish.

India doesn’t have exceptional winters but the overwhelming humidity in most cities does pose moisture management issues. This is why innovation is required on all fronts — texture, construction and design. “Our design and development team is probably the reason we are in the no.1 position today. We started investing in research right at the beginning and today have a 90-strong team of NIFTians and NIDians working on this,” he says. 

This attention to detail is what is giving Wildcraft an edge over foreign rivals as well. T Anil Kumar runs the Zanskar Outdoor Equipment Company, which has one manufacturing unit in Okhla and a single store in Delhi. “Three months ago France-based outdoors brand Decathlon approached us to make tents for them. I declined because if I design a quality product for Decathlon for ₹1,500, it will label it with its own brand and sell it for ₹3,000,” says Kumar, whose company specialises in tents. He thinks the reason Decathlon was looking for a local partner is because international players lack tailor-made products that work in Indian conditions.

Adds Mohit Behl, retail expert, KPMG, “More than customisation, pricing works in Wildcraft’s favour. The biggest drawback for an Indian company in the retail space when it competes with international players is design — Wildcraft has that down pat.” Homegrown footwear and apparel giant Woodland also sells technical apparel, footwear and other adventure gear in 50 of its 485 stores. Its founder and MD Harkirat Singh feels that high rentals is a big problem that can prolong the break-even period. This is why Wildcraft has limited the size of its stores to 400 to 500 sq ft, investing up to ₹25 lakh-30 lakh and targeting a 15- to 18-month breakeven time.

Wildcraft’s retail push is a conscious decision that the company has taken to build a name for itself as a purely outdoors label. “There is no single channel that equips you for outdoor excursions. So, we took it upon ourselves — in each of the 55 cities where we see potential — to equip customers from head to toe with the help of a dedicated and knowledgeable team,” says Dublish. Singh agrees with the idea of zeroing in on certain cities, since not all parts of the country are adventure-loving. Now that the company also plans to introduce footwear and apparel ranges, the average store size may go up to 800-1,000 sq ft. The company plans to move away from multi-brand channels, from which it gets nearly 50% of revenue at present, to more company-owned stores. The bigger challenge that the company faces right now is marketing an outdoors lifestyle before it can sell outdoors products.

At Wildcraft, chief marketing office Simeran Bhasin is taking this problem head-on and has a four-pronged strategy in place. “First, we need to get people outdoors with the help of social media campaigns and then inform them about offbeat travel options. Then, we need to engage them with the brand, like we did with our 60-km trail from Mcloedganj to Triund in Himachal last year. Lastly, we need to get them togged up with the right gear at our stores. This is both a challenge and an opportunity because there is very less competition.” 

The last mile

Cheap Chinese goods flowing into the country don’t make Bhasin’s job easier. But Dublish believes that the era of such knock-off products is long gone. “Chinese products posed a big threat between 2007 and 2010 — the entire unorganised industry was then thriving on that. But now that the manufacturing plants that we invested in have matured, productivity levels have gone up, making us competitive on the global scale. Which is why even on cost terms, China doesn’t pose a threat to us anymore,” he says.

Many international players such as Decathlon have also set up stores in India. Is there any threat from them? Not really, Singh opines. “Such companies have a different approach and model. They have opened hypermarket-like stores outside metros and offer a much wider range of products, including sports gear. Their pricing is also on the higher side.” Behl feels that Wildcraft and other smaller outdoor companies are not directly pitted against Decathlon in the short term. “I wouldn’t call Decathlon an outdoors company. It’s more of a sports company and that market already exists in India and has potential for success as well,” he says.

That’s not entirely true because their stores do stock all sorts of outdoors gear. Plus, the fact that Decathlon and others have been approaching the likes of Zanskar Equipment for contract manufacturing testifies that they have future plans to fight it out with local players on the latter’s turf. However, since these are early days for the outdoor industry in India, there is ample space and customers for several high-quality players, feel analysts.

Nonetheless, Wildcraft is taking preemptive measures to ensure it is not restricted to one product line: it is getting into the category that bankrolls international players — apparel and footwear. Dublish believes these innovations have helped it evolve a strong business model. “We never had the luxury of incurring losses, so we remained profitable from day one. Over the next five years, we want to grow the business eightfold and to achieve that, we are planning to raise $50 million-60 million through debt or equity. Since we are profitable, even internal accruals are an option.” 

Behl is not surprised that Wildcraft has managed to keep its head above water so far. “Over the past two decades, Wildcraft has mostly been a product-based company, which is why it’s not surprising that its profitable. The company has started expanding its retail footprint of late. It would be interesting to watch what happens when its retail mix goes up compared with its total size — what will happen to profitability then? Retail sucks a lot of money out of companies,” he says.

The company aims to target countries in the tropical-equatorial stretch in west Asia and southeast Asia next. After two decades, it looks like Wildcraft has finally made it to the promised land.