We are talking to Semhal Guesh, CEO of Kabana Leather, an Ethiopian company that produces a variety of handmade leather products.
1. How did you come up with the idea of creating Kabana Leather?
The concept was born while I was making bracelets from scrap leather in college. After two or three failed attempts to run other businesses, I created Kabana in 2017.
At first it was just a hobby. I am an architect by profession and I love design. My passion for design led me to make leather bags. My hobby turned into a business when I employed someone and saw the impact it was having on their life. I left my job in an architectural firm to run Kabana full time.
We manufacture products under our own Kabana brand and also have a contract manufacturing division that manufactures items for international labels. We were 100% focused on the export market until Covid-19 hit and it tested us economically. Subsequently, our target market partly shifted to the local market. Our customers are people and companies who source ethically produced products.
2. Give us an overview of your product line.
We have tote bags, gym bags, wallets and work bags.
We are currently also producing PPE products, such as face masks and scrubs, with support from the Mastercard Foundation, but this is temporary.
3. Where do you get your raw materials?
Almost 92% of our raw materials are of local origin; these include sheep and goat leather, textiles and canvas. The remaining 8% of raw materials are imported from Egypt, the United States and Taiwan, including zippers, buckles and accessories. We source leather directly from factories and produce it to our color and texture specifications. We choose these factories based on our requirements for sustainability, environmental footprint and child labor-free practices.
4. Describe your product development process.
For our Kabana brand, we try to have launches twice a year. Design begins with a moodboard with colors, material concepts and design. Usually I work with my team to develop models and designs. We prepare samples and get feedback on them. We then manufacture our selection for launches.
On the outsourced manufacturing side, we get designs from buyers who want products made in Ethiopia. We make samples using their designs with potential alternatives. The approval process typically takes several iterations and discussions; once they approve a sample, we proceed to manufacture according to the purchase orders.
5. Where do you sell your products?
Currently most of our sales are in the United States and we send small shipments to Europe, but it has not grown as much as we would like. We also sell small quantities to Rwanda and South Africa.
6. Who are your main competitors?
On the contract manufacturing side, we compete with Indian and Mexican manufacturers for the US market. At the level of our own label, we are in competition with other local brands which export to the same markets.
7. Identify the factors that led to your success.
We focus on training and investing in our team, so we have close to zero staff turnover. Women represent more than 80% of the team. We focus on the consistency and quality of our products, which has driven the brand forward. We don’t focus on seasonal or trendy products, but rather on functional bags made locally and sold around the world.
8. What has been the most successful form of marketing?
Much of our marketing relies on word of mouth from satisfied customers who recommend Kabana to others. We haven’t spent a lot on marketing. We have also had some success at trade shows.
9. What are the biggest challenges to being successful in your industry?
Our biggest challenge is finding quality leather and accessories to match the bags.
The business environment is tough for startups and entrepreneurs like me. We have difficulty accessing financing, which limits our working capital and makes it difficult to transition from a small to medium-sized business or expand operations.
10. Tell us about one of the most difficult situations you have found yourself in as a business owner.
The Covid-19 was a hardship for me, my team and the Kabana brand. We had major setbacks and almost closed shop; we have struggled like the majority of businesses around the world. This has been the toughest year as our customers have canceled orders and once operations are back in business all canceled orders have been shipped with significant discounts. I was forced to let a few of my temporary workers go and reuse the factory to produce masks and personal protective equipment, which we have never done before as we are a leather company. Fortunately, with the support of the Mastercard Foundation, this has helped us recover and save the jobs of our employees.
Kabana Leather CEO contact details
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