Mumbai: There are no global Indian retailers. And although India has a rich heritage of textiles, leather and embroidery, there are no global or well known Indian luxury brands, says Pierre Mallevays, founder and managing partner, Savigny Partners, a corporate finance advisory firm focusing on the luxury goods industry.
On the sidelines of the two-day Mint Luxury Conference in Mumbai, Mallevays, who has worked as director of acquisitions for LVMH Moët Hennessy-Louis Vuitton SA over 1998-2004, spoke about the need for Indian corporate entities to emerge as global retailers. Edited excerpts:
What according to you are the reasons that Indian brands are lacking success on a global scale?
I think it’s a question of priorities and perhaps of courage. People tend to be comfortable in their home markets and when they go abroad, they look to sell what they produce at home. The level of skill—creativity in jewellery, textiles and embroidery and leather—here is very high. What is lacking perhaps is the storytelling. In luxury, you need to tell your story, you need to sell, that is not a good word, but if I can use it. Also, big corporates, investors from India, are active when it comes to buying real estate, etc. But when it comes to showing an appetite for investing in luxury, we have yet to see that happen. Investing in luxury requires a long-term view.
Are there any brands here that can become big globally?
India is always a partner when it comes to finding a partner for embroidery, textiles. I think India can do more in the field of leather. There is Hidesign, they have the skillset to produce quality leather and they are a price point for the domestic market. But there is nothing that can stop them from producing very high quality, luxury products, whether they are branded with an Indian name or something else, and be successful internationally.
You have been mandated to find buyers for Paul Poiret, a heritage fashion brand that has been dormant. Do you see Indian investors showing interest in this brand?
We are conducting this sale online. The process for bidding has been kept simple with all the information available on the Web. The reason to do this is to evoke interest from Indian corporate houses to participate in the bidding. Paul Poiret was the first real super-star designer and he was the first one to move outside of pure garments into fragrances, cosmetics, leather goods and other categories.
Where does India figure in terms of priority markets for global luxury brands looking at expanding internationally?
India is extremely high on the list of tomorrow. But, so is Vietnam. For the last 15 years that I have been involved with the luxury market, India has been an incredible market for tomorrow.
It has yet not taken off. It is perhaps bureaucracy, tax, lack of infrastructure... There are quite a few wealthy Indian consumers, who purchase luxury goods outside of India; in India, it’s happening very slowly.
So, are marketers looking at other markets and putting India on the backburner?
Sure, you always have to look at where to prioritize your investments and India is not quite ready for a big avalanche of investment with the regulatory environment. However, for the first time, in a long time, the signals made by this government, pro-business, pro-investment, have energized a number of companies including multi-brand retailers and international retailers looking at India. They have yet not invested, but they have certainly increased their level of potential to invest in the market.
Do you see the Internet becoming a channel for luxury marketers to sell in India?
Yes, of course. Digital channel is more important today than it was a few years ago. Communicating the value of the brand is one element and then there is selling. Traditional luxury retails have started their own mono-brand retail channel as opposed to multi-brand channel as they want to be very careful of who sells their products.
There are only a limited number of multi-brand (online retailers) like www.net-a-porter.com for example that are successful as they offer a level of service and engagement in consumers that luxury brands like. Luxury brands will not go onto Amazon or ebay, but certainly, the relative importance of digital is growing for them.