I think Longchamp came to Doit Creations at the right time: Radha Kapoor

Radha Kapoor has been working to promote design and innovative thinking through a number of ventures via her family office, The Three Sisters: Institutional Office, set up by her and two sisters Raakhe and Roshini Kapoor. The eldest daughter of Yes Bank Ltd’s chief executive and managing director Rana Kapoor, Radha has just signed a franchise agreement to bring French luxury handbag brand Longchamp to India through Doit Creations (India) Pvt. Ltd, the firm that she founded in 2009. On the day Longchamp’s second India store was launched in Mumbai, Kapoor spoke in an interview about the challenges of introducing foreign luxury brands in India and selling them outside the biggest cities. Edited excerpts:

Why did you zero in on Longchamp as the brand to tie up with?

Longchamp is pretty much the first luxury brand we have partnered with. We didn’t want to do (an) “uber-uber” luxury (tie-up). We wanted to do more premium affordable luxury. I think Longchamp came to us at the right time. Their positioning is high-end luxury, in the top 10 brands, and the quality and craftsmanship you get is impeccable. But it is also something for a consumer who is shopping around. If you go to an LV (Louis Vuitton) or Gucci or Dior (store), you might make a couple of trips before you buy something and think before you spend like Rs2 lakh. But with Longchamp, it’s a quick, impulsive buy. In Longchamp, comfort, use and functionality are very key. It is also a beautiful brand because it does not distinguish you from the background you come from. Even Sophie (Delafontaine), the artistic director at Longchamp, mentioned that in France you could have a porter carrying a Le Pliage bag (the brand’s flagship product) and you could have the owner of the building carrying it too.

How did this tie-up start?

We were seeking brands and someone from Longchamp’s team was visiting the luxury conference in London. We then had a follow-up meeting in Paris about three years ago and then they all flew down to India. It took about two to two-and-a-half years to set everything up.

When we both sat across the table, we realized that there was a lot of alignment in our vision and what we wanted. Longchamp is completely family-run, and we are also doing things within the family, although we make it professionalized. We were hitting the right chords there. It’s almost like getting into marriage. We were able to get the CEO and the artistic director to India; not a lot of brands can do that.

What are the challenges in bringing a brand like Longchamp to India?

There are a lot of infrastructure constraints in our country. Also when these brands come in, I think it’s a no-brainer that if it’s Delhi, it is DLF Emporio, and if it’s Bombay, it’s Palladium for setting up your flagship store. I think these brands have seen others like them come in (these malls) and they are very particular who their neighbouring (brands) are.

And also localizing (the brand). Longchamp has a certain look and feel they follow and they have to be consistent in the colours they use and the materials they use. So it gets very expensive to import everything. We had to import everything for the first store (in Delhi). But for the second store, Longchamp asked if we could explore and see whether we can do more local sourcing, perhaps even from Taiwan and China, of course without compromising on quality.

I think hiring the right people is also challenging, although a lot more people are now studying (this subject). We are also doing a course in luxury management at ISDI (Indian School of Design and Innovation, of which Kapoor is founder and executive director).

Initially, in India we lacked in the sales field because salespeople were not trained enough. How do you make sure they understand the brand’s philosophy, history, the entire making process, the different SKUs (stock-keeping units)? I think that is all very important in making the right pitch.

After Mumbai and Delhi, how are you reaching out to new markets?

Currently we are only in Bombay and Delhi but there is huge spending power in cities like Raipur, Ludhiana—there is more willingness to spend there. We have plans to travel and test the market soon. In some cities, we still have strong local support, but in others we will have to go to a local influencer or a local partner which could be a blogger, an influencer, or even a socialite for that matter. We are also working on more focused events. For example, Longchamp makes for great gifting, whether it is in weddings, where the market is massive, or in corporate gifting. We reach out to wedding planners and wedding managers. We can also have focused events with private wealth managers and private banks. India is a very nascent market so you have to really scope out the market scenario here.

Are you looking to set up other stores?

Longchamp is also very conservative, so we might potentially have four-five (more stores) in Bangalore, Chennai and elsewhere. We could maybe look at like a plus-one store here (in Mumbai). There are new malls coming up in Bombay. There is a mall that is supposed to come up in BKC (Bandra-Kurla Complex) and they’re doing a lot of investment there. Let’s see, we’re being hopeful.

How is your agreement with Longchamp structured?

This is an India franchise for stores across India. We could potentially look at a JV (joint venture) but to begin with we wanted to go with a franchise. For most brands, this is a standard format.

And how are you investing in this agreement? How is the set-up different from the one you have with Spanish laundry chain Pressto?

It all works differently. With Pressto, we had an initial royalty fee we had to pay to Pressto Spain. We of course did not own the stores here, we leased them out. But the equipment is all taken care of by us. So we pretty much have to invest in everything and pay them a royalty, that’s how it works. We have a 30-year agreement with them.

With Longchamp, it’s a little different. It’s a franchise and we invest in pretty much everything including buying the merchandise from them. But they support us in the marketing budget. So for whatever we put in (for marketing), 50% of it will be shared by Longchamp. There is no royalty in this agreement.

What is your strategy to sell Longchamp online in India?

We are not retailing with e-commerce yet— that’s another challenge. We have to see what the right channel is, (exploring platforms like) Tata CLiQ or others. Again, we have to be careful with who is on (these platforms). I don’t think Amazon would be right because it is pretty mass, right? We have to pick what is right (for Longchamp) or maybe have a separate India page for the Longchamp website. We’re still in those conversations but they (Longchamp) are very open to it.

I think there is a lot less hesitation (among Indian shoppers) to buy something a lot cheaper online. Although a lot of people here will shop on a Net-A-Porter (Net-a-porter.com) or a Matches (Matchesfashion.com) in the UK and the US, perhaps because (these portals) have been around a lot longer.

Is there a gap in online luxury retailing?

I don’t think there really is a luxury (online) retailer for international brands in India. Actually, there isn’t anything at all, and maybe that is a business opportunity!

What other sort of brands do you want to bring into India in the future?

We are looking at family entertainment centres, like a gaming centre with new technology including virtual reality, mixed reality or augmented reality. This is where you can tie up with a, say, Warner Bros. (to use their cartoon) characters. We are also in touch with Merlin Entertainments that does Legoland (themed entertainment park); that could be an interesting tie-up to have.

I think things like these would work very well in India because we don’t have family entertainment centres where children can go. I think a Legoland concept with technology where you get to see characters like popular superheroes (will be successful), so we’re exploring that area as well.

And like I said, there’s a huge market for lingerie, for mom-and-kid kind of stores. There is a very limited space to go get apparel for newborns and even for maternity wear. I think women in India just buy extra-large rather than (go to) someone who does maternity wear.

But we don’t want to be in the very high-end space unless it’s a brand like Prada, which is an institution. I think affordable luxury works better in India.

Source: http://www.livemint.com/Companies/a0Yn5hgu1YNhKGNCmv00LN/I-think-Longchamp-came-to-Doit-Creations-at-the-right-time.html