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September 20, 2013 1:48 pm
When India eased limits on foreign direct investment in retail last year, it was widely regarded as a welcome mat placed before the world’s luxury brands. But one man who actually helped to open the door to Asia’s third-largest economy was Sanjay Kapoor, who has in effect been a one-man silk road for western names.
Mr Kapoor, 45, co-founded Genesis Colors in 2001 following a career in Citibank’s corporate treasury and mortgages businesses. The group, which now earns revenues of around $100m a year, owns several Indian fashion labels. But it is the Genesis Luxury unit, started in 2008, which is currently in the spotlight, working as local partner for 17 of the most exclusive foreign brands in India – from Armani, Burberry and Etro to Paul Smith, Bottega Veneta, Jimmy Choo and Canali – helping them navigate both local consumer tastes and local real estate.
From the beginning, Genesis invested in mapping the Indian market and developing a database of buyers. Challenging the stereotype that consumers in emerging markets demand showy logos and designs, Mr Kapoor discovered that Indian customers travel regularly and demand much the same as customers overseas.
When Genesis Luxury first partnered with Bottega Veneta back in 2009, for example, Mr Kapoor says performance was “dismal” because the Italian fashion house had been catering for first-time buyers. Research showed Indian consumers were sophisticated, making repeated purchases. Genesis Luxury brought the latest Bottega styles to India instead of the most traditional, and in four years the Italian fashion house has grown from having one store nationwide to six.
Mr Kapoor also observed that, in contrast to China, in India international brands haven’t eclipsed the appeal of traditional national fashion.
“If you go to a fine Indian wedding, you’re going to see beautiful women dressed in Abu Sandeep saris with Jimmy Choo shoes and Bottega Veneta handbags,” he says. “There’s a beautiful mix and fusion.” Thus he has helped international brands play on this dynamic. Canali, for instance, has produced its own version of the nawab, a traditional jacket, for six seasons now, reinterpreting it in cashmere and sleeveless styles.
Beyond simply understanding demand, however, Mr Kapoor also offers foreign brands practical support with India’s greatest obstacle: real estate.
In a market where property prices are staggering, there is an acute shortage of premium space. But stroll around Mumbai’s exclusive High Street Phoenix shopping centre and you find several brands from the Genesis Luxury group. “We have a portfolio of brands so access to real estate is much better,” says Mr Kapoor, who has good relationships with many of India’s leading developers.
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Indeed, the Indian market is so complex that Mr Kapoor does not see liberalisation as a threat to his business. As Nicolas Luc Villeroy, head of the brand’s tableware division, points out, explaining why Villeroy and Boch entered India in a joint venture with Mr Kapoor’s group, “India is a new market for us with a huge size, a rich culture and its own social and economical structure,” and to navigate it, they need local expertise.
In addition, continuing restrictive conditions on foreign retailers – such as a requirement for 30 per cent local sourcing – still make full ownership in effect impossible, and ensure the continuing need for partners such as Mr Kapoor.
Indeed, far from losing clients since the new regulations were announced, Genesis Luxury has recently signed on Michael Kors, America’s biggest luxury success story and a brand in the midst of major international expansion.
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