11 Jan 2018
8 min read
Outside Dil Kumar Darji's jacket-tailoring shop in Tinchuli, Boudha, several winter jackets with logos of The North Face and Adidas are displayed on hangers. Inside his tiny shop, the floor area is covered with several rolls of colourful fabric used in making the outer shell of jackets; and plopped on the floor are three sacks filled with silicone, down feather and hollow fill: materials used to provide insulation for Darji's jackets. There are jackets everywhere. Jackets piled on top of the shop's showcase, and yet more jackets stuffed inside the showcase. Manning two sewing machines inside the shop (there are four machines in total) are tailors sewing even more jackets. "Winter is the peak season for jackets," says Darji. This winter alone, his shop has already produced more than 300 units.
Nepal's outdoor-jacket industry took root in the early '90s, with tailors and small companies producing knockoffs of popular outdoor gear brands like The North Face. That copycat model is still employed by a large majority of the industry's low-tier manufacturers--made up of hundreds of tailors like Darji. But the industry has also seen the emergence of large-scale manufacturers, who have gone on to establish their own outdoor-gear brands that cater largely to the mid-tier jacket market. Sonam Gear and Everest Hard Wear are examples of such companies. And then there's Sherpa Adventure Gear, a brand that prices its products at par with--and competes with--the world's leading jacket brands. Nepal's jacket manufacturers have today not just carved a local niche for themselves, but come to dominate the local market--across all tiers. And quite a few of them are now gunning for the international market.
The early days
The industry was born as a response to the demands of buyers--mostly tourists--for jackets that were not too exorbitantly priced. Not all the trekkers, climbers and adventure tourists who came to Nepal could--or wanted to--pay the hundreds of dollars big-brand down jackets or waterproof jackets cost. "Seeing the gap, Nepali manufacturers started providing these tourists an alternative--a much cheaper alternative," says Tashi Chombe Nepali, proprietor of Sonam Gear, one of Nepal's largest outdoor-wear brands. Before starting Sonam Gear in 2011, Chombe Nepali used to manufacture brandless jackets. His shop was just one among many, many others that had sprung up around the tourist hub of Thamel.
"We would buy second-hand jackets from tourists and try to imitate their designs for our jackets. Back then, quality wasn't something we gave much thought to," says Chombe Nepali.
Like Chombe Nepali, Sonam Sherpa, proprietor of Everest Hard Wear (EHW), an outdoor-gear brand, too made his foray into the industry by manufacturing brandless jackets. "One of the major challenges we faced had to do with the scarcity of raw materials," says Sherpa. "Most importers relied on suppliers abroad for everything from fabrics to insulation materials. They imported them from far-flung countries like Russia and Japan."
But the biggest challenge that nearly upended the industry came from within: the decade-long Maoist insurgency from 1996-2006. As the war got worse, the number of tourists arrivals started dwindling, and so did the demand for jackets. Manufacturers like Sherpa had no choice but to shut their business for weeks and months. But by the turn of the century, the industry started crawling back to life again. The insurgency was winding down to its final days. But more importantly, the industry started seeing a spurt in demand for jackets from a segment it had never catered to: Nepali buyers. "Before the early 2000s, most Nepalis--except for those who worked in the tourism industry--didn't even know what a down jacket was," says Sherpa. The demand from this new segment would go on to eclipse everything else.
The evolution of the entry-level jacket manufacturers
Seeing the growth in demand, jacket manufacturers in and around Thamel started producing jackets with the local buyer in mind. At the same time, jacket-tailoring shops started springing up in localities far from tourist hubs. (In Tinchuli, for example, where Dil Kumar Darji has his shop, there are two other jacket shops.) On any given day, depending on the season, Darji's tailors sew jackets upon jackets: insulated jackets during winter, windcheaters during spring and waterproof jackets during the monsoon. It takes Darji's crew anywhere between four to seven days to sew a winter jacket, a day or two to sew a windcheater, and two to three days to sew a waterproof jacket.
What sets shops like Darji's apart is that they make customised jackets. Darji's customers can choose from a wide range of jacket fabric--from normal to water-resistant to water-proof. And there are multitudes of colours to choose from too. For insulation, Darji offers three choices: hollow fill, silicone and down. Prices for his hollow-fill jackets start from Rs 1,700, silicone jackets start from Rs 2,000 and down jackets start from Rs 3,500. "The business has grown with each passing year," says Darji. "I think people prefer customised jackets because they actually have a say on not just in the material used for the jacket but also in its design. You want a flap to cover your zipper for better windproofing, we will make it. You want elastic cuffs for a better, firmer fit, we will make it. You want a jacket with a hood, we will make it." Employing such a business model has helped distinguish shops like Darji's in a segment crowded with jackets from countries like China, Thailand and even local readymade-jacket manufacturers.
It's not just working with brand-new jackets that Darji limits himself to. On a recent morning, his shop was visited by a customer carrying an old sleeping bag. The customer asked Darji to transform the bag into a down jacket. Customers routinely ask Darji to turn their old jackets into brand-new ones by providing a new shell, and to alter their oversized jackets. "I do basically everything you can do to a jacket," says Darji.
Darji started his jacket-tailoring shop in 2015 with the money he had saved up working in Malaysia from 2011 to 2013. After returning home, he worked for a year as a tailor at a jacket-tailoring shop, learned the tricks of the trade and then started his own shop. "My initial investment was Rs 150,000. Within a year, I had not only recovered my initial investment, but had also added two more sewing machines and hired two tailors," says Darji. "With the growth in demand that we have seen every year, I am sure more tailors like me will get into this sector."
Tailors like Darji source all their raw materials from cloth dealers in Chetrapati and Thahity. "Since we can't purchase in bulk, we end up coughing up more money on raw materials than a large manufacturer would. To stay competitive, we have to do our best to provide the best quality, while still generating some profit," says Darji. "Another problem that we face is power outages. Even today. Without electricity, I can't use my electric sewing machines. The better power supply we've had for the last one year has done much to help manufacturers meet market demand. But we can't have loadshedding making a comeback again."
The mid-tier branded jacket market
With the increasing local demand, the mid-tier jacket segment (where products are priced higher than the knockoffs, but much lower than foreign brands) has seen many new local players. One of the most prominent is Sonam Gear. The brand retails from eight standalone outlets in Kathmandu, two in Pokhara and one in Namche. It has two factories, employs around 350 people and manufactures an average of 80,000 jackets a year. Jacket sales alone make up 60 per cent of the company's revenue.
"The mid-tier branded jacket market was largely untapped when we decided to start Sonam Gear," says Sonam's Chombe Nepali. "We knew that if we positioned ourselves well, the market would be there for the taking. But we hadn't anticipated how tough it would be to convince people to trust a local brand in a market that was flooded with knockoff jackets."
It took Chombe Nepali years of consistently focusing on quality to gain the trust that his brand enjoys today. "We use the best materials for our products, and all our products undergo stringent quality checks. Our high-altitude down jackets are tested in extreme weather conditions by trekkers and mountaineers; our waterproof fabrics are tested for their ability to withstand water," says Chombe Nepali. "And even after all these tests, some manufacturing defects do go unnoticed. So we also offer easy returns and exchange for products with manufacturing defects. Our customers can also come to our store for repair works on our products due to wear and tear."
But Nepali buyers, whom Sonam Gear primarily caters to, not only want quality products, but also want them reasonably priced. The challenge is that much tougher for mid-tier jacket manufacturers because their segment is flooded with products from China, Thailand and Bangladesh. "We've always known that working with low profit margins while providing quality wasn't a sustainable business model," says Chombe Nepali. "So we decided to scale up our production; we decided to import raw materials in bulk so that we could get them cheaper and then manufacture at lower cost."
The brand's goal now is to grow bigger by expanding aggressively, adding one outlet after another. "The long-term goal is to go international," says Chombe Nepali.
Targeting foreign markets
For Everest Hard Wear, the main focus is the international market. Its products are currently exported to European countries, North America, Bhutan, China and India.
"My business philosophy is simple. Offer quality at a competitive price," says Sherpa. "To ensure quality, we import our fabric from manufacturers that are known for their quality, from countries like China, Taiwan, Korea and Japan. We order all our zippers from SBS, and they come with our brand's initials engraved on them."
And yet, the brand's products are competitively priced. The price points for their goose-down jacket start from Rs 4,000. "The outdoor-gear market is filled with very expensive products. I offer down jackets of the same quality as that of international brands for half the price. That's my chief selling point," says Sherpa. "That's exactly what Japanese clothing brand Uniqlo is doing. Its success story proves that this is what the market demands. The maximum profit margin on our products is just 25 per cent."
Out of the brand's total production volumes, 35 per cent is exported. And more than 50 per cent of their local sales come from foreign trekkers and mountaineers in the country. ì"Word of mouth referrals from such clients have contributed much to promoting my products abroad," says Sherpa.
The Nepali jacket industry has come a long way from its initial years. From producing solely knockoffs to tourists, Nepal's manufacturers now produce all tiers of products for a strong domestic market and higher-end wear for markets abroad. With brands like Sherpa Adventure Gear taking on the likes of Patagonia and The North Face, Sonam Gear ruling the mid-range sector and tailors like Darji take care of the remaining buyers, Nepali jacket manufacturers have now become a force to be reckoned with.