Be the best in your country first: Bottega Veneta CEO7 min read . Updated: 07 Dec 2013, 12:21 AM IST
Marco Bizzarri is out to change the rules of how the luxury industry should operate on its own turf
He is the man behind one of the fastest growing luxury brands in the world, one that does not wear its identity on its sleeve, or rather on its bags for all to see and recognize in a flash. Marco Bizzarri, 51, president and CEO of Bottega Veneta SA, joined the brand in January 2009. Bizzarri, who has served as president and CEO of Stella McCartney in 2005 and as a member of the Kering Management Committee, has employed a strategy in the past five years to build the brand that does not blindly follow what most luxury brands do—i.e., expand aggressively in virgin territories. In 2012, Bottega Veneta’s revenue was €945.1 million (around ₹ 7,970 crore today), a 38.5% increase over 2011. Is Bizzarri a master strategist or someone who is playing it safe? On his third visit in four years to India, where Bottega Veneta operates six stores including one that opened in May in Chennai, Bizzarri talks about how he turned around the Italian luxury brand, why some Indian buyers prefer home shopping and how online shopping for luxury products is still not a big thing. Edited excerpts from an interview:
Bottega Veneta has been in India for about six years. How have things changed since the brand set up its first shop in November 2008?
The awareness is much better. The perception and views about what a luxury brand should be is much higher among Indian customers now than before. Infrastructure remains an issue. You are kind of obliged to open stores in hotels, whereas in other countries you grow everywhere. Here it is much more difficult. Consumers are there already, but they are not getting enough stores to go to because of the infrastructure.
How much harder was it to build a customer base in India?
It is hard, especially for us because we do not have a logo. People come to us to buy quality, but they cannot show that they bought something that is expensive to others with fancy logos. The intimacy that we want to deliver to our customers is not as easy as it is for other brands.
Are you saying that Indian women are more logo-conscious when it comes to bags?
Like most people worldwide, Indian women are changing and moving from logo to something that is more quality-driven. They don’t need something written outside that certifies that you bought something expensive. I am not against logos, but with our products you don’t really need logos. Also, I think after the crisis in 2008, people have moved from purely fashion-oriented products to timeless products. Maybe it is more expensive, maybe they buy less, but they buy better (products) now.
Is India still a market where you are discovering how things work? Or have you figured us out?
The beauty of this business, India or not, is that it is changing every day. You need to stay on top of everything on a single day. The minute you think, ‘I have done it’ or ‘I know what is happening’, you will start to go down. Our business is a people business. Sure the products are great, but the difference is made by the people who manage our shops. The kind of contact that they make with the customer is what brings them back to shop. The experience, the feeling that you have in the store is what makes the difference. That is why you need to work on understanding what is happening on a daily basis. It is (a) never ending process.
There is not a lot of traffic at all luxury malls other than what I see in DLF Emporio, Delhi. From what I understand, the kind of business done in India is that some customers want a visit (from a store employee) to their home or apartment to show them the products in their personal ambience. This is different from other countries. For certain persons they don’t want to show that they are buying and some just want a very personal shopping experience.
Bottega Veneta has launched its largest store in Milan recently. How does it feel to have done this on your watch?
We opened our biggest shop in the world in Milan because we come from that part of the world. Milan is close to our headquarters so it is easy for us to have feedback from our people who work with us, how they feel about the store. As a strategy for the company, from the moment I took over five years ago, we decided with the team to reinforce our presence in Europe. This may seem strange in a way because of the economic perspective on Europe, but I strongly believe that if you want to be strong outside on a global level, you need to be strong from within first and foremost.
You say developing your brand in your country is better. Why?
Think about the industry. Our industry is made by people shopping in their home country and shopping when they travel. Europe is one of the best travel destinations in the world. If you look at our revenues in Europe, most of the business comes from tourists. So the fact that you are well-prepared and big in your country means you expose and present your best side to the people (tourists). After people shop in Europe at our store, they go back and they shop as well in their home countries. It does not mean that we are neglecting stores in other countries. If you look at the history of the luxury industry, when a brand started to look only at virgin, new countries forgetting their roots, they were lost, they went bankrupt. I do not want to make the same mistake, I want Bottega Veneta to be absolutely perfect in our own country and develop the right way elsewhere too. That is why I am allocating more money to Europe than in other countries.
Is part reason for this that you can control the experience of the shopper better in your country and that to train service staff outside own domain is hard?
It is not a matter of control. If someone comes to a region and sees that a brand that comes from this region cannot represent itself well in its own area, chances are when you go back to your own region you will not want to buy from them anymore. It is like a mirror in a way.
How did you come to this conclusion, especially when other luxury brands are so gung-ho about countries like China, the UAE?
When I joined, the company had 45% of its business coming from Japan. It was not sound. Despite economic trends, the place I really wanted to focus (on) was Europe. If you look at tourism, Europe is the centre. Most people travel to Europe before going anywhere else because of the history, culture here. So for that reason we thought it is best of reinvest in Europe. In the last four years we have grown 150%; we have been the highest growing company in the luxury world. Maybe the decision we took was different from others, but it works.
China and India—what are the key learnings for a luxury player operating in this region? Are we very different from each other?
There is a big difference. I know China pretty well. I have worked there in 1993 and 1997. I don’t want to be nasty, but from a decision-making process, China is much quicker (than India). Whether it is a yes or no, it happens much faster there. In terms of attention to luxury products, the market grew very fast. They impacted the business of our sector very heavily. In Shanghai and in Beijing, most brands have five-six shops in each city. Also, in India the profile of the buyers is slightly older. In China, the number of people who approach luxury is huge and they are from all ages. There they also stay away from logos a lot and that has to do with people not wanting to show that they are buying luxury.
Online shopping for luxury—will it become the next big thing?
I think online shopping is important because people in countries where we do not have stores should have a chance to buy our products. On the other side, it also helps people to understand the characteristics of the product before going into the store. But in most cases people who scout for luxury products online, end up buying it offline. They go to websites just to verify, but buy in the shop to really understand the feel of the product.