Dependence of Indian umbrella makers on China has substantially reduced: MDS Director

Founded in the narrow by-lanes of North Kolkata in 1882, it certainly is Kolkata's home-grown heritage brand by all stretch of imagination. It is still one of the strongest players in the Indian umbrella market, that is estimated to be nearly 15 crore pieces per annum, and is going stronger by the day with the young fifth generation scion of Mohendra Dutt family, being at the helm, taking it to the next level through expansion and diversification, albeit with a new logo and new brand name - Mohendra Dutt & Sons (MDS The Original).

MDS, whose founding father Mohendra Dutt, a famed music composer and pakhwaj player in his own right in those days, was the pioneer of modern umbrella manufacturing in India way back in 1882, has now forayed into school bags, backpacks, ladies bags, rainwear, air pillow, hot water bag, windcheaters, leather goods and so on, spearheaded by Kalinath Dutt, great grandson of Mohendra Dutt, and his son Subhashis Dutt. Speaking to Bizz Buzz exclusively, Subhashis Dutt, Director, MDS The Original, shares the ringside story of India's umbrella business, with monsoon setting in, in the country

Pandemic pushed us to change our approach in doing business - more use of technology in processes, smoother customer interactions on digital platforms, pan-India reach of online sales, selling locally in bazaars and haats in addition to traditional retail outlets, instant home delivery of products, etc

The influx of Chinese substitutes has affected all industries. However, it may be noted that the market of high quality umbrellas in India do not get impacted on account of the cheap substitutes. Since liberalization in 1991, the industry has witnessed changes both positive and negative but yet the major brands have stood the test of time and competition from foreign cheaper imports

Any idea how big would be Indian umbrella market (volume wise or value wise)?

No statistical information is available with regards to this. However, umbrella manufacturing is a small industry with only a handful of players in the sector, while there are fewer branded quality makers in the country. The industry is largely manual labour based not just in India, but globally as well. Hence, the growth in production capacities is limited with the use of technology.

What is the break-up of organized sector and unorganized sector in this overall market? Organised sector must be growing faster, right?

The sector is largely disorganised with many households and small establishments making them in rural areas of certain regions of India. Umbrella making was always a cottage industry since a long time.

Apart from development of factories making umbrellas and its parts, even today the women from rural, semi-urban and even urban areas play a big role in production providing the household an additional source of income. The organised sector is growing gradually with additional technological inputs. However, a high dependence on the rains for its sales and on human resource for production, the sector suffers from uneven spikes and falls every year.

How has the pandemic impacted your business? If it has affected your business severely, what are you doing to come out of this?

Lockdowns and restrictions due to Covid have led to almost 70 per cent fall in revenue, diminishing margins. But we have to stay resilient. In the 140 years of our existence, we have witnessed wars, labour lockouts, civil unrest, nation-wide emergency, etc., and of course this is unprecedented. We are taking this as a new learning - a new approach to doing business.

The Covid era brings about new ways of doing business, not necessarily new product lines. There is no denying the fact that adding new lines of business is prudent in dire situations of this magnitude. We have added masks, face-shields, etc. However, it is not possible to change the entire product portfolio overnight. We intend to change our approach in doing business - more use of technology in processes, smoother customer interactions on digital platforms, pan-India reach of online sales, selling locally in bazaars and haats in addition to traditional retail outlets, instant home delivery of products, etc. We started a campaign in accordance with Padmashree-awardee Dr Rao's proposal for using umbrellas (1.5 foot distance maintained) for social distancing which was implemented by a number of states in India. We implemented QR codes for direct access to our selling platforms to all customers.

How are imports of cheap umbrellas from China affecting Indian umbrella makers' business? Is the Chinese import on a downslide now?

The influx of Chinese substitutes has affected all industries. However, it may be noted that the market of high quality umbrellas in India don't get impacted on account of the cheap substitutes. Since liberalization in 1991, the industry has witnessed changes both positive and negative, but yet the major brands have stood the test of time and competition from foreign cheaper imports. Chinese imports have been growing year on year due to the sheer production capacities and benefits of scale but deteriorating quality of workmanship and raw materials used as input the indigenously produced umbrellas have sustained. Currently due to the shift of focus to high end products in China, a good amount of production of the humble umbrella has shifted to Cambodia, Vietnam and Philippines.

Besides readymade umbrellas, Indian umbrella makers also have to depend on import of many components from China. Is it also falling?

Indian umbrella makers have been dependant on imports of raw materials from many countries, China being chief among them. However, a lot of those components are being made in India, though with inconsistent quality. The dependence of the makers on China has substantially reduced due to the availability of technology that can develop the components in India.

How and where do you promote your brand in the market?

Our promotion is more word-of-mouth and referrals. Online marketing is a great tool to connect with your customer base directly, which has benefitted a lot. Since our marketing is more visible at the Point-of-Sales, we generally concentrate on relationships with our dealership network.

What is the percentage wise break up of your retail sales and institutional sales? Which segment is growing faster? Going forward where would you lay more thrust on?

Although, a break up may not be disclosed, the retail sales through our large networks of wholesalers, retailers, online affiliates and company-owned and exclusive outlets is a major part in our total revenue. Moreover, the institutional sales may bring in more numbers but are not regular in nature. The dealerships bring in the much needed stability and form the lifeblood of the company.

How many outlets do you have at present? How are you expanding your retail presence?

There are 4 company-owned outlets, six exclusive outlets and a network of over 400 dealers-direct and through the wholesalers.

Other than umbrellas, which are areas you have diversified into?

School Bags, Backpacks, Ladies Bags, Rainwear, Air Pillow, Hot Water Bag, Windcheaters, etc

Is there any scope for exports of Indian umbrellas? Has anyone (or you) tried this? If there is any scope for exports - to which countries?

Indian umbrellas are exported to a good number of African countries. Scope is huge.

What is your take on prevailing GST structure on umbrellas?

Currently the GST rate is 12 per cent. Ideally it should be 5 per cent. A massive 12 per cent taxation is a huge burden on the consumers, a large number of whom are middle class or lower middle class.