While Nepal-based premium brands continue to expand and broaden their horizons, they face hurdles in the form of lack of awareness in the zeitgeist and a paucity of skilled manpower.
--BY MUNA SUNUWAR
For companies the world over, value addition of brands is an integral component they focus on to strengthen and expand their presence in markets home and abroad by appealing to upmarket customers. In the context of Nepal where the concept of product premiumness is slowly gathering momentum, some domestic producers have been putting a lot of time and effort into carving out a niche in the market.
As premium brands are attentive to the details the customers seek, the producers focus on workmanship to produce unique products that have a timeless quality about them. The ‘Made in Nepal’ tag is another factor which not only adds value to the brands but also creates a positive image of the country in the international arena.
Kobold was founded in 1998 in Pittsburgh, Pennsylvania. The manufacturer of expedition tools and travel accessories produces professional-grade tool watches, leather, cashmere and pashmina products in their workshops in the United States and Nepal. The company opened an atelier in Kathmandu to assemble watches emblazoned with 'Made in Nepal' in 2012.
Known for the Himalaya Everest watch in Nepal, Kobold has been serving its customers with authentic leather products like watch straps, cardholders, purses, pen holders and notebook covers. Kobold makes the dial of the popular Himalaya Everest watch from the rocks below the summit of Mount Everest. The limited edition products, 25 pieces to be exact, have been sold out.
“Even though our much-hyped watch is out of stock, people who visit our store love the other products. We have many more products to offer our customers besides Kobold watches,” explains Roshan Ghimire, manager at Kobold Watch Company, Nepal. The showroom in Nepal sometimes receives an order in bulk from banks. “They order 100 to 200 pieces of travel wallets at once,” he adds.
Creating Kobold products requires meticulous handwork. According to Ghimire, the production of a leather watchstrap takes two days. “We do not sell our products unless they are perfect. The finish has to be flawless, which takes time,” says Ghimire. Kobold products are available in two locations in Nepal- Kobold Watch Company in Kathmandu and Tiger Palace resort in Bhairahawa.
They create the leather products from imported leather that arrives from Thailand and Japan. The price starts from Rs 1,000 and can go up to Rs 30,000 while the starting price of Kobold watches is Rs 250,000, however, they have an eye-watering ceiling of Rs 1,700,000. “People who desire high-quality products are our customers,” informs Ghimire.
The brand exports its products primarily to the United States in response to online orders. He says, “People today seek fast service and the lack of understanding of the time and process required to craft genuine products has been posing problems in the Nepali market.”
Ghimire believes if they train the existing manpower to manufacture quality products, there are immense opportunities in the international market for Nepali products.
Kobold has an annual turnover of Rs 1.5 million and is planning to open a new workshop in Pokhara.
Rakura, a brand from Himal Tea Industries, was introduced in 2012. The company is Nepal’s oldest exporter, leading manufacturer, consolidator, blender and packager of fine quality Himalayan tea.
Rakura’s value-added tea offerings are exported to the United Kingdom, Australia, Philippines and China. Rakura provides an authentic Himalayan Tea experience through its 24 varieties of teas in both certified organic and conventional form under 46 Stock Keeping Units (SKUs) divided into three segments, namely the supreme line of premium loose teas, classic line of premium tea bags and premium natural tea infusions in tea bags.
Ravi Rathi, executive director at Himal Tea Industries claims Rakura is the market leader in the luxury tea segment in Nepal. “Our target market is patrons who seek value for the money paid, essentially, discerning individuals who are adopting a healthier lifestyle and are looking for the finest tea offerings,” he adds.
Rakura prices start from Rs 60 and go up to Rs 380 depending upon the variant and packaging size; their products are available at all major retail stores, hotels and cafes across the major cities of Nepal. Rathi believes the price-to-product ratio of Rakura is among the best in the world.The value proposition, shaped by the company’s mission to transform and put Nepali tea in its rightful place, makes the product special. “We look to achieve this through a strong integration of meaningful components – expertise, collaboration, standards and sustainability. These elements, when united, are stronger than the sum of their parts,” explains Rathi. The tea brand claims it is on an upswing due to their positioning as a healthy drink.
The Factory Team
Ahmed Dulla founded Dulla, the footwear brand in Nepal in 2011. The brand offers leather shoes, belts, bags, wallets and purses in its product portfolio that are available in its outlets in Kathmandu and Pokhara. “We manufacture premium quality products using the latest materials available. The products are limited edition and the designs are not repeated,” says Ahmed Dulla, founder and shoe designer at The Factory Team.
Dulla products are unique because they offer the added benefit of exclusivity. “Premium international footwear brands are not available in Nepal to my knowledge. And the response from consumers is fantastic as it is the first time such products have been made available in the country,” shares Dulla.
The cost of Dulla products ranges from Rs 1,500 to Rs 12,000. The business, which began with an investment of Rs 250,000, has been doing well- it even receives orders from foreign countries. “The demand for Dulla products is high in countries such as Australia, United Kingdom and the United States,” says Dulla. The brand has established a commendable status in its segment. “There are instances where people come to our store to avail after-sales services with products that are as old as five years. This shows the quality of the products we sell.”
According to Dulla, the company has an annual turnover of Rs 30 million. “The field I am working in is challenging because of the lack of skilled manpower. The lack of workers with the optimum skill-set has certainly been a stumbling block,” he adds.
Known for its intrepid terrain, Nepal attracts adventure tourists from across the globe. The gear they use is predominantly that of foreign brands. Defying the trend, a Nepali outdoor-clothing and equipment manufacturer, Sonam Gear, has been increasing its presence in the segment. The brand distributes its products from six distinct outlets in Nepal. It is a local brand that presents high-end quality and reasonable rates.
Initially targeted towards tourists, the brand now enjoys both foreigners and locals as its loyal customers. “Since the past few years, the locals have shown interest in activities like mountaineering and other adventure sports, so now both foreigners and locals who love the outdoors buy our products,” says Tashi Chonde Nepali, CEO of Sonam Gear.
Tashi believes quality and affordability are the key pillars of the brand. “The production takes place keeping our country’s economy and lifestyle in mind so it is suitable for the locals as well,” he explains, adding the annual turnover of the brand stands at Rs 50 million to Rs 70 million. The price for clothing items ranges from Rs 2,000 to Rs 18,000 and for shoes and heavy equipment, the price ranges from Rs 200 to Rs 50,000. The brand exports its products to the Himalayan region of India including Darjeeling, Gangtok and Sikkim.
Arniko is a label that provides a variety of fashion apparel, bags and skateboards. The brand is recognised for its hand-carved skateboards that are produced in their workshop in Nepal. Arniko has a flagship store in Zurich, Switzerland from where their web store operates. The products of Arniko are available in The Local Project, a Lalitpur based store where local products of Nepal are showcased and sold. The brand has a range of products in the apparel section along with bags, accessories and skateboards that are exported all over the globe, particularly to Europe.
“It is important that your products are unique and of high quality. It is also important that you make sure there is a market for those products,” opines Marius Arniko Arter, CEO of the company, adding the product will get the price it deserves if produced under fair conditions and with high quality. The price of an Arniko t-shirt is Rs 1,500 while a hand-carved skateboard made out of Canadian wood can cost up to Rs 20,000.
Arniko claims the products of the brand are timeless and trendy, ideal for an urban lifestyle. “We are more interested in producing quality products rather than the profit they provide,” he says, adding, “We are well known for our skateboards which we proudly produce in Nepal since we were the first to introduce this culture on a large scale to Nepal.”
Metalwood, a Lalitpur-based design studio and workshop specialises in architecture, interior design, furniture and home lighting making. Pinewood, rosewood, mango wood and sal wood are used to craft furniture which is seasoned in its workshop located at Patan. The furniture can be custom made and the precise handwork makes it a premium product and differentiates it from other offerings. Timila, Tuti, Teesa and Nibha are among Metalwood’s popular furniture brands. Similarly, Gabi, Ita, Kusa, Nugha, Misha and Herra are its home lighting brands.
“Custom made furniture and lighting products are desirable to customers. Seasoning wood for furniture takes a month in the least so we deliver our custom made products to our customers within 45 days after the order is placed,” informs Shuvekshya Joshi, manager at Metalwood. Joshi believes the customers are attracted to Metalwood as the products are cheaper in comparison to international brands that offer comparable products. The price of furniture starts at Rs 3,900 while the starting price of lightings and vases is Rs 1,050 and can go up to Rs 120,000.
“Both foreigners and Nepali customers are attracted to our products and the growth is consistent with the annual turnover of Rs 1.5 million,” states Joshi.
Khumbu Kolsch, Sherpa Brewery’s flagship beer has made a dent in Nepal’s beer industry. Locals are getting used to the taste of beer and Khumbu Kolsch’s distinctive taste has changed the game. Phurba Sherpa established Nepal’s only commercial craft brewery, Sherpa Brewery Pvt Ltd in Chitwan in 2014 and commenced production of Khumbu Kolsch in 2015. The brewery is independently run and the beer is produced traditionally in small batches.
Professional brewers prepare the beer utilising natural and high-quality ingredients. The beer is brewed with ale yeast that infuses complex flavours into the concoction. The beers are packaged in aluminium cans as it keeps the beer fresh and keeps out light and oxygen better than glass bottles. The company imports raw materials needed for the production from Germany. Sherpa craft beers Khumbu Kolsch and Himalayan Red are priced at Rs 265 and 270 respectively. Khumbu Kolsch is available in supermarkets, restaurants and bars of Nepal.
The common challenge Nepali premium brands face is a lack of awareness among the public about their products. The idea that quality products are outsourced from foreign lands has been cultivated in the zeitgeist.
“Consumers always value and position international brands higher than Nepali brands, even if the Nepali brand matches or beats the international competition,” shares Rathi. The production of premium products requires skilled manpower. Lack of workers who possess the requisite knowledge of leather and its value has posed a challenge in the market. Dulla claims the demand for his brand is immense while the production capacity remains stagnant. “There is demand in the market but I have not been able to deliver because of manufacturing limitations,” he says.
According to Lama, lack of knowledge has become a major challenge because of the cheaper goods available in the market. “Customers assume our rates are high without considering the quality provided,” Tashi shares. Nepali premium brands are performing admirably from a monetary perspective. If production is amplified it will in turn increase penetration in the international market. The future of such brands is bright. Nepal exported merchandise products listed under Nepal Trade Integration Strategy (NTIS) amounting to Rs 32.9 billion during the first eleven months of the current fiscal year 2017/18, a 10 percent increase from the previous fiscal year. The export of NTIS products during the FY 2016/17 was recorded at Rs 29.85 billion. Products like cardamom, ginger, fabrics, textile, yarn, rope, leather, footwear, pashmina are considered NTIS products.
Tashi mentions one of the key challenges is the export and import charges that elevate the cost of products. While the brands have performed commendably, promotional initiatives from the government would greatly improve international visibility.