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Armando Branchini | The Indian market is over regulated

The Altagamma foundation executive director talks about the impediments that face the industry in India today
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First Published: Sat, Mar 23 2013. 01 38 AM IST
Armando Branchini, executive director, Altagamma foundation. Photo: Pradeep Gaur/Mint
Armando Branchini, executive director, Altagamma foundation. Photo: Pradeep Gaur/Mint
Updated: Tue, Mar 26 2013. 05 06 PM IST
New Delhi: The Altagamma foundation, a conglomerate of several high-end Italian companies with brands that are internationally renowned, is one of the big names in the luxury market. Executive director Armando Branchini spoke at the Mint Luxury Conference in New Delhi on Friday about the impediments that face the industry in India today and about the growth opportunities ahead. He spoke about these issues in an interview. Edited excerpts:
You said the government is making life difficult for luxury retailers. Could you elaborate on that?
The Indian market is over regulated, there is too much government in it. I read a piece recently which said that life might become ‘less difficult’ for foreign retailers. Today, if Armani is selling its different lines in one store, that’s seen as multi-brand. So you can sell Giorgio Armani, or Emporio Armani, which is the secondary brand, or a tertiary brand like Armani Jeans, but selling one of them is different from selling all. No other country micro-manages things this much.
You feel that the government is keeping brands out?
Indians can buy the same products for less when they travel and you can see that. When people want to buy branded jewellery, or apparel, or handbags, anything they can wear on their bodies or carry in their hands, are being bought outside the country, from Singapore, from Dubai. People buy European products and smuggle them back in, and your government is losing customs, and it is losing VAT (value added tax), and it is losing foreign investment and preventing job creation.
Aside from government regulations, what do you see as the concerns? Is integrating your products for the local market difficult?
Integration is not a challenge. The Indian style is very good, combine the sari with the Italian shoes, and the Swiss watches. It’s business as usual, designers do this anyway.
You say that you need to invest for the potential to be realized, but what are the realities of the market on the ground?
The realities of the market are causing European brands to sell at a discount here, to build the brand. You have to be looking at building the market and educating the market, and we want to normalize things fast, but for now, the idea is to reach out to the market. One hope is that since 2010, there have been talks about a free-trade act, and there is now a June deadline to these talks, so I’m hopeful that this is something that will lead to positive results.
You are working in both India and China, and that country has had much more success. Can you explain why?
China is very easy for us. They have made it possible for foreign brands to shore up a presence, and it has had good results. I have a simple example. Fifteen years ago, Italian high-end luxury brands, we had 12 stores in India, and 15 in China. But in December 2012, there were 630 stores in China, and 32 in India. This is a clear sign of the difference between the two countries. It all depends on the government, the free-trade act could be a paradigm shift. Italy alone—we would have 100 or more stores opening up right away.
What are the categories that you have the most hope for right now?
I think that luxury casual wear is a big category, casual wear and leather and watches are all good. Jewellery will fall behind watches because you have a strong local product. Ethnic products are going to keep growing in India, but I don’t think that foreign companies can really compete, we can’t make a better sari than an Indian expert could.
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First Published: Sat, Mar 23 2013. 01 38 AM IST
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