Interview with Mr. Gyula Sebő, Co-Founder and CEO Julius-K9

09 May Interview with Mr. Gyula Sebő, Co-Founder and CEO Julius-K9

Julius-K9 has grown from a European company into a globally recognized brand. Can you tell us about your background and what led you to this career?

My passion for dogs led me to work as a dog trainer in Austria, specializing in service dogs, among other things and training for the German Shepherd Club. That is when I saw the need for better equipment. The name “Julius” came from my Hungarian name, Gyula, which was difficult for foreigners to pronounce. “K-9” was inspired by my address, 9 Kele Street, where I got my first dog. K-9 is also a well-known brand and term for service dogs, which later aligned perfectly with our brand.

Registering the trademark set our path, even before we fully understood branding. We entered the EU market boldly, confident that we could create anything, we can produce anything. Surprisingly, our dog harness became our most successful product and truly became a trendsetter in the field. We started a global trend with interchangeable hook-and-loop patches on dog harnesses. With unique patches, dog owners could personalize their dog harnesses, which were eye-catching and strengthened the acceptance of dogs in society.

Experiencing this enlightened me as to what the essence of a valuable brand really means. We realized that branding is what truly differentiates a company. Achieving and maintaining this difference is the foundation of all brand building. Innovation is an essential tool for maintaining difference. A brand’s success, i.e. its difference from others, can sometimes be created by accident, beyond the original intention.

For us, staying unique in the market comes down to one thing: continuous innovation. The biggest challenge in both Europe and the US is an innovation deficit. This lag is due to two main factors. First, Chinese innovation has surged, with patents increasing exponentially. Platforms like Temu and Shein enable these innovative products to flood Western markets with little regulatory oversight. Second, capital concentration allows a few major buyers to control the markets in the Western world. No matter how innovative a product is, if these distributors don’t purchase it, it won’t reach consumers. Their focus is often on cost reduction, the market risk inherent in new products and mass-market supply, prioritizing profit over quality or value. In this highly competitive situation our strategy is to move high-end, complex products to offline sales while keeping mass-market items available online and we try to make innovative product innovations desirable to large market players.

Online sales cater to less demanding customers who prefer convenience. In contrast, our premium products require in-depth information and training, best provided through offline channels. We founded the company in Hungary in 1997, we actually started in an unheated garage. In 2014, I found myself in another garage, without air conditioning, this time in Tampa, Florida, packing orders at night to escape the heat. At the time, all manufacturing was in Hungary, but we already started to concentrate on US commerce and production. We also prepared for the current presidential election and by the time President Trump took office we had already transferred our US distribution and retail contracts to an American-owned company, Herko LLC., by the end of 2024. We closely watch US-Europe manufacturing relations and are ready to adapt. As one of the few European manufacturers still producing high-end textiles, we are actively exploring options to establish a US facility.

When I think back on the history of our company, in the first 10 years everything was slower and we built our brand through personal contact at dog expos, exhibitions and meetings with owners. Generally speaking, once we gained market success, imitators quickly emerged. We also faced legal battles, including copyright cases in the Supreme Court of Cologne and this contributed to our rapid growth. These experiences taught us valuable lessons and shaped our approach to protecting innovation. Interestingly, some of our fiercest competitors later became our partners. In our second decade, personal interactions faded, replaced by online monitoring of copycats, counterfeit products and trademark infringements. We track about 100 cases across various marketplaces, constantly reporting violations. Platforms like Amazon have been highly effective in combating counterfeits, becoming key trade partners. However, enforcement remains a repetitive challenge, as infringers often resurface under new names.

Our story today is less exciting, as it’s now a constant legal battle against copycats. Fortunately, I don’t handle it alone, we were among the first to create specialized, marketplace-oriented task forces. Unlike our early struggles, these battles don’t bring major revelations or progress; they are repetitive. As a creative person, I find little emotional satisfaction in them. Our biggest breakthrough wasn’t starting the business, it was entering mass production. Producing hundreds of thousands of products felt like losing a personal connection. Initially, I was attached to each design, thinking about how it helped dogs and their owners. Over time, the focus shifted to efficiency, which can lead to burnout. This shift led me to focus on invention and design. We identified specific applications — just as human footwear varies for different needs, dog equipment does too. While mass-market products became our core business, we continued developing specialized gear for service and everyday dogs, balancing volume with innovation.

With current focus on legal battles and execution, how is innovation being handled? Does the company have an R&D department?

Legal battles are just a side effect of our business. What truly matters is that there is a serious, innovative engine working under the hood. Our biggest legal battle came in 2009 when our Austrian partner suddenly replaced our products with Chinese counterfeits. We fought and won the legal battle, but the real solution was innovation — I developed a new product within two weeks, which became the foundation of our current US portfolio. The key lesson: our products must be legally protectable. Now, we design with patents and trademarks in mind, not just functionality. Today, 98% of our manufacturing remains in Hungary, while the US facility focuses on simpler components and accessories. Long-term, we aim to expand US production, especially as shipping costs rise.

What percentage of the business is export and how do you approach working with foreign partners or potential investors, given past challenges with major partners?

99% of our products are exported and we supply major distributors across Europe, covering all market segments. We are now focusing on expanding our presence in physical stores. In the US we have a smaller portfolio, which we’ll expand based on market demand. Our strategy includes offering exclusive products on Amazon that aren’t available elsewhere.

We are strengthening partnerships for innovation, including brand collaborations, where the partners develop new products together. For related products like dog food, we could license our brand to partners who manufacture them. We already have a partnership for dog food and are exploring others, including cleaning products focused on pet health. For example, under the name JK9 Clean we have developed a special cleaning spray for harnesses and leashes. We are also considering partnerships with major American brands, where they provide the product and we offer our brand to help them enter the European market. This reflects the diversification of our portfolio.

Can you share how your market is divided among different product categories and how Julius-K9 positions itself within the market in terms of share and leadership?

In niche markets, our market share and sales are growing, especially for premium products. While sales numbers are smaller than in mass markets, the growth rate is strong. However, the rise of Temu and Shein has distorted consumer values, with people now accustomed to buying cheap products like family clothing, for cents. In comparison, high-quality dog equipment can cost around €50, leading to a 30-40% drop in sales as customers opt for cheaper alternatives.

Do you see a shift toward focusing more on niche, premium products for those who want and can afford them, rather than mass-market appeal?

Yes, for mass-market products, we focus on health and safety, not just material quality. We educate customers that investing in durable, safe dog equipment means fewer costs over time, sometimes lasting for years. We emphasize both long-term value and the health benefits for their dogs. Identifying market niches is invariably a process of exploration and innovation. We find this process deeply fulfilling and it frequently results in the development of patented innovations.

The Hungarian Minister of Finance mentioned a new double treaty with the US. What do you think the potential benefits are for your company?

Temu and Shein’s arrival initially led customers to overindulge in cheap products, but we expect a shift back to normal behavior as saturation sets in. However, the EU’s protective regulations have failed to shield European manufacturers from mass-produced, unregulated imports. While the EU took too long to act, the US responded more swiftly and offered better protection for products. We believe the US market is safer for our products and we’d welcome a bilateral agreement between Hungary and the US to support our growth there, which in our case would also help export the highest quality products made from German raw materials.

How has the increase in pet ownership post-Covid impacted people’s lives and your products?

Post-Covid, Europe saw an increase in desire for pet ownership, highlighting the volatility of our market. For example, demand for dog equipment surged by 40%, which we mostly managed to supply. However, this was followed by a downturn, understandably, as all large market swings, in whatever direction, are dangerous for businesses. During lockdowns, people craved contact with dogs, but once restrictions were lifted, the novelty wore off, leading to oversupply and market decline.

The company owners, including myself, volunteer at a dog shelter. Those involved in such work know it’s never-ending and it is full of difficult situations and lovely stories. In addition, we strive to meet special needs, like developing a dog harness for a Hungarian woman born without arms, which she can control with her feet. I personally oversee these product developments and I won’t give up until I find the best solution.

My passion lies in product development that strengthens the bond between dogs and their owners. In a market dominated by players who prioritize profit over quality, it’s tough for someone passionate about innovation. However, to make an impact, it’s necessary to handle certain business aspects. No matter how great a product is, if it’s not marketed and accessible to customers, it won’t succeed.

What tips would you give dog owners to strengthen their connection and improve their relationship with their dog?

Each dog is unique. Some people misunderstand that training is the only key. The most fascinating aspect of the human-dog relationship is transitioning from raising to partnership—when you understand each other without words. We must recognize and appreciate this moment. Every dog ​​has its own personality, regardless of breed. I currently live with a mini bull terrier, which I ended up with by accident. He couldn’t stay in his old place because of his epilepsy so it was important for him to have a safe, calm environment and we lived alone in a house during that time.

Where do you see Julius-K9 in the next five to ten years?3

Since Covid, many companies have struggled with predictability and growth. I believe that sticking to solid principles unites a company and ensures a better future. Our plant, equipped with cutting-edge technologies and staffed by dedicated employees and professionals, is an unparalleled value in Europe in the field of animal equipment. I would also like to emphasise the significant contributions of our raw material suppliers in Germany, Austria, Switzerland and Hungary over the past five years. They have demonstrated resilience in the face of unexpected circumstances. Our focus now is on delivering our services in a manner that has a positive impact on the world. Furthermore, given the tendency of global situations to result in extremes, it is imperative that we pursue positive impact through our activities. As industrial players, it is our responsibility to ensure that our actions have a positive impact on the world. I see the essence of the next decade in building this path.

What is your final message for our readers on why they should invest in Hungary or partner Julius-K9?

For us, the US market, we have already moved part of our business there, creating jobs. This could lead to U.S. investors partnering with us in Hungary, especially in digital product development and licensing. An American manufacturer could enter the European market under the Julius-K9 brand and we can work together to structure a mutually beneficial cooperation.