Bulgari should never have left India three years ago, so it’s coming back, the chief executive of the Italian luxury jewellery and accessories company said in an interview on Thursday.
Jean-Christophe Babin was in New Delhi on Thursday to attend the opening of the company’s flagship store in India.
Bulgari first came to India in 2004.
Earlier this year, the company received approval to set up single-brand retail stores through a joint venture.
With an ever-increasing number of shopping malls and the rising number of rich people, the growth outlook for India’s luxury brand market is positive.
According to a survey, India’s luxury market is around $14 billion while the global luxury business stands more than $1.5 trillion.
Experts say India is the fastest-growing market for luxury goods, expected to grow faster than China in the next four years.
Q. Why are you returning to India?
A. Well, probably because ideally we shouldn’t have left India. Actually, we never left India because the brand has been ever present in watches, multi-brand distribution, fragrances. So, the brand Bulgari has always been in India. The only thing which we have lost for four years has been the jewellery … because it is the core business of Bulgari. We left probably because at that time the then management was a bit disappointed by the results, which was not surprising. Now it’s a different story because you have luxury malls which attract logically, compared to hotels, larger growth.
Q. India has a bad reputation of delayed permits. How has your experience been?
A. You know, India is not the only country with such an administrative complexity. I would say that simple countries are more an exception and complexities is a rule in the world anyhow.
Jean Christophe Babin
Q: You’re coming back to India at a time China is facing an economic slowdown and Japan is officially in recession. What do you make of India as an investment destination?
A: I think a global company cannot bet its future on one single geography. So, the reason why we enter India is because as we have a lead we are balancing continuously our risk opportunities and we want to be present and deeply rooted in one of those markets, which we are sure, in the next 10 years will be one of the most important luxury markets in the world.
Q. India’s luxury market is small as compared to other countries and yet it’s extremely competitive.
A. Well, it’s huge. The market size, when it comes from jewellery, is probably one of the largest markets in the world. Indians are buying a lot of gold and a lot of gems. But they don’t buy them yet from the global brands. In India, the challenge is not so much to create a luxury market because there is a huge luxury market already existing. It’s to attract Indians to buy branded jewellery.
Q: And how would you do that?
A: I think you have very important social factors, which are driving people more to other global brands. First of all, it’s the nomadization of the society. People are born in Delhi, raised in Calcutta, work in New York. This bond between your family and your jeweller is gradually leaving room to a new bond, which is a global brand.
Q: But what about people who are living in India, who gift their daughters traditional jewellery. Would you be thinking of tweaking your products to cater to indigenous tastes?
A: Well, you know we have a style of … stones, set with diamonds, with yellow gold, which is very very compelling to Indians. I mean it’s a coincidence. The Roman style which has been shaping in Bulgari variety is a great feat to Indian taste more than the traditional school of jewellery that you can find in some other countries. So in that sense, we don’t feel we need to modify. Obviously these are adjustments we are going to do for India, but which we already do for some other countries. But we don’t want to create a collection for a certain group of people because people buy global brands because of the icons. So it would be a kind of a paradox to put aside the icons and try to sell something which is more ethnic.
Q: How much do you expect India to contribute to your overall revenue in the coming years?
A: What we measure in Bulgari is not so much the revenue from a market, but from a consumer group. So what comes for us is how much business we do for Indians in five years down the road or 10 years down the road. Some would prefer to buy in India, others would prefer buying when they travel. So eventually the measurement of the success in India won’t necessarily be the net sales in India but the net sales with Indians.
Q: And what is your expectation of that?
A: India probably is one of those few countries which can account for – Indians, to be more precise – in their own land 4-5 to 10 percent of the clientele of the luxury brand.
Q: So, are you saying that that will be India’s contribution to the luxury brand market globally?
A: I think it’s a number that should be reachable.
Q: Do you have a timeframe?
A: No. You know our luxury is a slow-moving business. You cannot say because I am re-launching the business in India today, one year down the road Indians would be 5 percent of our business. We know that playing the India card will be a winning card. It doesn’t matter too much whether it will be five years or 10 years. We don’t expect any selling returns immediately in India.
Q: The last time you opened your store in India, there was a different government and now, when you’ve re-launched, it’s a different government. What are your expectations?
A: Luxury, like many businesses, blossoms when you have stability. So, the more stable the government, the more consumer confidence is building up and the more it benefits the economy and the business.