The Hindu Business Line : `India will be hungry for Diesel'

There is new aspiration, new money; consumers are conscious about what they wear, where they eat, what mobile phones they carry, where they vacation, what cinema class they go to.

Darshan Mehta, President, Arvind Brands

Diesel zoomed into India last week through a joint venture with Arvind Mills. This luxury denim and fashion brand from Italy is popular in India and the name evokes a certain awe. And now with this joint venture, Indian consumers will actually get to wear the latest in the global market right here — India will have the same international product line, with Diesel products being available here simultaneously as they are being launched globally.

But hold on... Diesel also comes with a very fancy `international' price tag — the average price of a pair of jeans is Rs 8,000! Does Arvind see a market for a brand like Diesel in India, which is traditionally known to be price-sensitive? It does, says Darshan Mehta, President, Arvind Brands. In the high net worth segment, where aspiration levels are soaring!

The joint venture company will set up freestanding stores which will stock all of Diesel's product lines from jeans and casual wear for men, women and children to bags, accessories, jewellery, watches and lingerie, and innerwear for men. While the first two stores will come up in New Delhi and Mumbai by the end of this year, more stores are planned in cities such as Hyderabad, Chennai and Chandigarh.

BrandLine chats with Mehta on what Diesel could mean to India and how luxury retailing is fast catching up. Excerpts from the interview:

What does this tie-up mean to you?

It's a great honour and prestige to be associated with Diesel as partners. Initially there were 25-30 people wanting to tie up for obvious reasons, for it is the God of denim fashion, undoubtedly, and very consistently scaling new highs, it has created its own cachet. Diesel is one of the richest companies in the fashion industry. It is reputed to be a debt-free and cash-rich company. For us, it's great excitement to be working with them and learning together.

As far as luxury retailing in India is concerned, this is the first joint venture. We hear of a lot of luxury brands wanting to enter India - most of them talk about giving Indian players distribution rights or appointing licensees. But there is no talk of a joint venture. To that extent, this joint venture speaks very well about brands like Diesel seeing the potential of India as a truly long-term market. Diesel has only one other joint venture in the world - in Japan. Everywhere else, they have either 100 per cent subsidiaries or distributors. We would like to bring in authentic original Diesel products from wherever they are made in the world - most of them are made in Italy - to Indian consumers in stores that are as beautiful as those in Lexington Avenue or Shanghai or Moscow.

Is India ready for a brand like Diesel?

Diesel is already so popular ... it is so hot in India, right from Bollywood downwards. When is the last time you didn't see anyone in a Bollywood movie in Diesel? India is one of the top rich customers. In India, you can sell expensive phones, BMW, Porsche, Rolls Royce and Mercedes cars.

The Indian consumer takes the most expensive vacations. It is the same consumer who buys Diesel. Indians are big spenders and there are lots of very wealthy people. India would be hungry for Diesel.

Who is your competition?

Currently none of the competitors are present in India in a big way. Replay has launched in a small way. Hugo Boss Orange label retails in five-star lobbies only. Diesel's pricing will be way above a Tommy (Hilfiger) or a Guess or an Esprit. To that extent, none of the competitors are present in a big way. G-Star is not here. Energy and Miss 60 are competitors and they have just done their co-branded store in Delhi. VF Corp (with which Arvind has a joint venture too) has some luxury brands such as John Varvatos, North Face and Nabapijri (which is very close to Diesel pricing); all these brands have potential in India. In the years to come, all the big brands are going to be in India.

How big is luxury retailing in India?

According to an American Express survey `I have made it' on affluence in India, the estimated wealth of millionaires is $322 billion. KSA Technopak in a report `India luxury trends' estimates the luxury segment is worth $444 million spanning 1.6 million high-income households (earning more than $1 million annually). These households are growing at 14 per cent year. Average spend is $9,000 per annum on luxury goods. There is huge growth potential in this segment. There is new aspiration, new money; consumers are conscious about what they wear, where they eat, what mobile phones they carry, where they vacation, what cinema class they go to. Look all around us. Look at what is happening in the airline industry. There is a truly new aspirational Indian, which wants to signal to the world that he or she has arrived in life.

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