Ashik Philip

Miriam: I’ll start really broad. What according to you is luxury?

Ashik: Okay luxury is, to me luxury is anything beyond expectations of customers. You need to create that wow factor, otherwise it’s not luxury. It’s just not the product but even through service. The product, of course will speak for itself but service is also a major part of it.

M: Okay. So, in India, do you think what Indians perceive as luxury is different from the global perception of luxury?

A: Absolutely, absolutely. In India, the concept of luxury is still not in. And, maybe in Delhi you still feel it’s there, but in other cities in India, no, it’s definitely not. If you compare cities like Italy or Paris, it’s all about fashion, but if you compare it, India is nowhere even close. Because it doesn’t matter to an Indian customer, for example if his wardrobe is three years old or two years old, it doesn’t matter. He can still wear it. But if you compare with cities outside, it’s not like that. They need to change their wardrobe every six months or every year. They can’t wear the same stuff they wore last year. They look for something new every year. It’s not the same for Indians in our market.

M: In terms of how they perceive luxury per se, as opposed to just like a wardrobe, where do you think the differentiation lies?

A: Okay, see, I can tell you in terms of menswear or womens wear, but I don’t know… Of course Indians love to be pampered, if you’re speaking of five star treatment, they love luxury. It’s a different form of luxury, I mean, they love spas. For me if you ask me, in terms of --, this is what I could relate to, we are not there. We are still not there.

M: Moving on to your brand, could you tell us a bit about your brand and what about your brand qualifies it as luxury?

A: Okay. So Zegna is an Italian brand and it was started in 1910 so it’s over a 100 years now. It’s a family run business. Zegna is one of the very few luxury brands which are vertically integrated, which means it has its own mill, they produce their own fabric. From scratch to the end, it’s all done by Zegna. Be it from procuring raw materials to the end, it’s all done by Zegna in the Zegna factory. There are very few brands like Loro Piana who have this. So in terms of this, Zegna stands out. Zegna is known today as the men’s leading luxury brand. Apart from Loro Piana. Loro Piana is there, right up, but apart from Loro Piana, Zegna is there. They have their business in North of Italy and they have their production in Fabio which is border of Switzerland. Their headquarters in Milan. Is there anything specific you want to know about Zegna? Basically it’s a men’s luxury brand, they cater to every aspect of men, in terms of dressing a man.

M: What about it qualifies it as luxury? How would you qualify Zegna as luxury?

A: if you speak about a Zegna suit, it’s all about the finest of the fine material. So, for example, if you speak about the wool, it is Australian superfine merino wool that they use. Okay, so every year, Zegna holds a competition in Australia for these wool breeders, for these farmers who breed sheep. So for the farmer who achieves the finest of the finest

fibre, is given a trophy which is called the Vellus Aureum trophy, so that is, how much ever kgs of wool he produces, equal amount of gold is given to him. So this is how Zegna also promotes these farmers, and these farmers also take care of the sheep in such a way that they cover their sheep with clothes during harsh winters and summer, they feed them gooseberries and they are also called happy sheep because they are made to listen to happy songs in the night, when they sleep. They do crazy stuff like this. So they use only these kinds of materials to make the suit and be it the button or be it the lining, they use natural fibers. If you go to a normal brand, the lining will be nylon, but in Zegna they use a natural fibre. So like from the smallest to the smallest detail, everything is luxury, you can feel it, I mean you can really feel it.

M: So in terms of the Indian market, when did it come to India and is there any product differentiation between what is there in India and abroad?

A: It’s the same. No, globally it’s the same, but, the collection is much less in India because the market is just not ready so our top line, which is Couture, is no more in India because it’s a very expensive line and this market is just not ready for that kind of line, so we don’t have our top line, which is Couture, we only have our basic line available in India right now. Otherwise, if you compare the sartorial line abroad, it is the same collection, but, in terms of the range that we have, it is far less than what’s available globally.

M: Okay, so you said people aren’t aware, but Indians who have gone abroad and maybe, seen your top line, do they ever ask specifically in India for it?

A: Okay, the customers in India generally prefer shopping abroad because one, it is much cheaper there, there is a huge price difference, nearly 20 -30 % difference is there. Secondly they tend to see the entire collection what is there in the season or whatever. I mean there are very few people who buy the top line, very few. I mean, there are not many, but they generally prefer buying abroad because it’s cheaper. They keep travelling abroad, so they buy it from there; and if there’s an urgent need, they buy it here, otherwise all their shopping is generally abroad.

M: In terms of brand positioning, is there any difference in the way it is positioned in India and internationally?

A: If you look at it globally, India is just a drop in the ocean. I mean, they really, India really doesn’t matter because the amount of business we generate in India is nothing compared to, for example, the amount of business we do in India in a year among, we have five stores, is generated in Hong Kong there is a store called Palawan, they do it in one day.

M: Okay

A: Yeah so you can imagine. India is nothing. So they don’t treat India, I mean, like its there, I mean, they are looking at India, it might come up sometime in the future, it has the population, I mean China grew. They are looking at India like that right now, that is why they’ve invested in India, but as of now, I mean, they’re not, the focus is not on India.

M: But aren’t you going at a comparative loss then? I mean isn’t it a…

A: Yeah absolutely, so it is a luxury concept, so they can’t once they… we had a store in Bangalore which they pulled out because it was an absolute loss, I mean people just couldn’t relate to it. So they had to pull out from Bangalore. But what happens is that, when

you pull out, your brand image is coming down, you are spoiling your brand image. So for brands like Hermes – Hermes is there in Delhi, not doing well at all, I mean they are absolutely not doing well, they can’t pull off, because internationally they are a very well-known brand and, yeah they just can’t pull off so they’re hoping somewhere it will improve.

M: So they do see in the future there is hope.

A: Yeah, of course there is hope. I mean if China can grow, then why not India. I mean, it might take time, but as of now, the luxury market in India is really struggling right now.

M: When you pick your store locations, you obviously pick them with great care. Does that, I mean, when it’s in a city, how exactly do you pick the store locations?

A: Okay, so the DLF Emporio location, is one of the best, I mean, you can’t let that location go. The brands under one roof, if you get a location like that, it’s great, you will get the crowds, you will get the walk ins. Then we also have another store in Oberoi, which is in a hotel, that’s a completely different thing, because you will not have enough number of people coming into your store. The only people coming in will be the people who live there, but the conversions that you see are more in the hotel. The conversions are more because the people who walk into your store are generally walking in to buy, so to answer your question – to choose your location is the most important thing.

M: But you said there are five stores in India?

A: Yeah.

M: The store in Bangalore, the one that you pulled out of, do you think location played any role in…

A: I mean, we were in the best location, I mean we were in UB City and that’s on Vittal Mallya Road, centrally located, that’s the best location but… and I mean that’s where all the brands are, that’s where all your LVs and all the brands were. It’s just that the market wasn’t ready for it. I mean, there was no point keeping the store there. It was just not running.

M: Okay

A: Yeah

M: Okay. So in terms of your target consumer, can you tell us a bit about who your international target consumer is?

A: who our international consumers are?

M: Yeah who your target consumer is.

A: If you look at our top richest Indian people, among 100 there are 25 who shop with Zegna. The rest 75 are not even aware of luxury. They are not aware of Zegna. They might know other brands like LV or Gucci but they don’t know Zegna for sure, so it’s just these 25 people, and our target… Our target is… I don’t know… I mean we can’t restrict ourselves to a certain sector of people, we have to target everybody for now. The market is just so bad right now, you can’t target a certain segment, you have to go behind everybody, I mean people, right now, Zegna is a brand for above 35, okay, but now… it is true, it is for men above 35 cause that’s how the brand has positioned itself, but now we just can’t hold

ourselves to that, we have to hit the younger generation as well, because they also have the… it’s a huge market.

M: But isn’t there a loss in exclusivity if you target everybody like this?

A: Absolutely yeah, but the thing is, see, for you to survive, agreed it is luxury, it is exclusive and everything, yes, but all said and done, I mean if you can’t survive when the market is doing really bad, you have to find a way to survive. You’re probably killing, I mean, in a way you’re killing your image, but you, somewhere you have to survive, and that is why you do this.

M: Also there’s this dramatic shift in positioning in such a case internationally vs in India, so then India you don’t position yourself as an above 35 brand.

A: No we don’t. Actually, globally also we wouldn’t want to but it is the people who have portrayed Zegna as a brand which is for above 35, but actually, if you ask me, it’s not. The brand is also making a conscious effort to change that because they’ve hired a very interesting designer called Pilati who is trying to change the entire look, the brand is also making a conscious effort to change that, and you can see the difference, but the difference is only in the top line which is not available in India, again.

M: Another thing is, if your target customer is, if I can use the word, diluted, doesn’t it further affect the image, since luxury basically runs on image aren’t you in this cycle of, this vicious cycle which is going to keep repeating? Where your customer doesn’t relate to your image and your image keeps changing, so your customer is never able to relate to it. Aren’t you seeing this sort of loop happening?

A: In India, yes. If you ask me in India, it is happening. Today if you look at LV, you know LV, right?

M: Yeah.

A: You just come into a mall and you walk into an LV store, and you walk into a Tom Ford store, you feel the difference. You will feel Tom Ford is a luxury store, you will feel it because you will hardly see people around, you might see one or two customers inside. But if you walk into an LV or a Gucci today, it’s like a Big Bazaar. It is literally like a Big Bazaar, it is so crowded, I mean. For me that’s not luxury today. And why is LV doing that? Because they have bags that start at 30-40 thousand. And for people in Delhi today 30-40 thousand is ok, it’s not a huge amount. Yeah, so for them, they are becoming a mass brand. LV and Gucci are becoming like mass brands. But even from their thing, they are doing it to survive. End of the day, they are doing it to survive.

M: But again don’t you feel that since luxury is so much about exclusivity, isn’t it in the long run going to dilute what you stand for?

A: Yeah absolutely. That’s the way it’s going forward. See, the brands who can sustain, who can hold themselves back will remain as luxury, like I absolutely get your point, most of these brands are diluting themselves. If you look at the market, all the luxury brands were surviving because of China. China was huge market and China has fallen down drastically since last year. It’s made a huge impact on almost all the brands, and Europe has been down for… it’s just not there now. The only market you can see surviving is Dubai. Apart from

Dubai there is nothing else. There is nothing else running for luxury right now, I am just talking in terms of clothes.

M: Yeah, I am asking only in terms of clothes.

A: Yeah so, in terms of clothes, it is only Dubai that is running right now. Apart from Dubai there is nothing else. There are brands like Hermes and Brioni and Kiton which are still maintaining all this, but… a lot of brands, I mean LV is a big player, and LV is diluting it for sure. A lot of brands are diluting themselves. Even Zegna for that matter is.

M: So why would a consumer, who is walking into a store pick Zegna over a brand like YSL or Gucci, cause I believe you manufacture the fabric for suits like that, so its technically the same, right?

A: Why would a customer choose Zegna? Because, one, if you think about it, Tom Ford, Canali, Gucci, these are the competition, okay? Tom Ford buy fabric from us, they make their suits in our factory. Gucci buy fabric from us, they make their suits in our factory. Canali is a competition for Zegna only in India, outside, they are not even considered as competition, cause they’re not. It’s not a brand which is even close to Zegna, or a Tom Ford or Gucci. So if a customer is buying a suit from Zegna, say it is two lakhs. If he buys the same suit from Tom Ford, it will be priced at four lakhs, cause they bought their fabric from us, so we will charge them a profit margin for that, they will make their suit in our factory, and again, yeah. So when they sell it, it will be much expensive but it will be the same product. But their design will be different, Tom Ford is known for their design. It’s a very young fit. We can’t copy their design, but end of the day, their fabric and construction is the same.

M: But looking at luxury from a purely price point perspective, wouldn’t that make Tom Ford higher up in the pecking order of luxury brands?

A: If you’re keeping it in price point, yes it is. If you are speaking about the quality, it is the same. Even if you look at the brand positioning, if you look at the chart, Tom Ford is more to the trendier side, because it is catering more to the younger generation, but if you look in terms pricing, Tom Ford and the Zegna top line, the couture line, are on par. It is only in terms of trend and style that Tom Ford is a little more ahead, otherwise in terms of pricing, it is the same, it is positioned as same – Zegna and Tom Ford. Not the Sartorial line, but the Couture line, of Zegna.

M: Okay. Again if we come back to the consumer buying behaviour, initially when Zegna entered into India, it probably came with certain expectations of the Indian consumer. Do you have any comments regarding that? Were they met or were they not met?

A: I think it is grown, like, it has not grown massively, and customers are appreciating all that because when we started, we have managed to increase the business by 50%, we are sure. It is improving. It is not that it’s not improving, but the pace is very slow, like the pace which was expected to pick has not picked up at that expected pace, but I mean, it’ll happen, but it’s slow, quite slow. But I am speaking in terms of a brand like Zegna, for an LV or a Gucci, they are doing quite well in India. Because they are almost like a mass brand. They are doing really well

M: In terms of people coming to buy a suit, has there been any change in their behaviour? Like in terms of maybe, acceptability, or in terms of the way they purchase a suit, a bit more knowledgeable, has there been any evolution of the consumer?

A: Yeah yeah, most of customers, yeah like I said, some of our customers are some of the top richest people in India. These are also people who travel, so it’s not like they are just in India. When they go abroad, they are internationally exposed as well. They have the knowledge, it’s not like they don’t. They also listen to the stylists in India as well. I mean, they respect whatever the stylist is also offering them. They’re open to… they’re willing to try.

M: Okay. Can you compare this to their international counterparts? Internationally, when people go to buy a suit, is it very different from when Indians by a suit?

A: Indians want discount everywhere. Yeah that’s the only thing. They go abroad, they want a discount there. When I met my international counterparts, they were like, Indians, if they are shopping, they want discounts everywhere. You give them a 5% discount or you give them a 10% discount, it’s not the margin, it’s the discount, you have to give them something.

M: So do you, give them discounts?

A: Not in India. In India we can’t afford to because we don’t do that kind of business, but in Europe, they do, they do better business than in India, so they’re allowed a margin of 10, but in India, we don’t we are not allowed. So we can’t offer that 10% now and this is a big problem for us. Because, one, it is already cheaper in Europe, two, they’re offering a 10% discount, so why will an Indian customer, buy from India?

M: But giving a discount in a luxury product, doesn’t that again come down to…

A: Yeah yeah absolutely. That’s what I said, Zegna s also falling into that category of brands which is diluting itself, but there are still brads which are holding. So to survive the market, they are doing it, because like I said, Europe is completely down. The business we were doing earlier, right now we are not doing it. So, right now we are just, trying to do everything that can bring in business. In terms of Zegna, why they are also doing this is because they’re a family run business, there is nobody supporting it, it’s just the family that is running it. Now, if they don’t make profits they will have to tie up with somebody else, and then, the brand can even get diluted even more. Okay. Now for them business is the most important thing for their family business to run. That is why Zegna is doing it. But I don’t know why other brands are doing it. The proper luxury brands like Hermes and all will never do it, they will never give discounts, for sure. Because they are the big players, people look up to them, so…

M: They normally don’t. Even I believe, LV and all don’t give discounts.

A: Even LV doesn’t but that’s because LV is doing so well in India, because the brand is so loud and that is something which really appeals to customers in Delhi. It has to be loud, it has to be written, it has to be written everywhere, and the brand has to be written everywhere. If you’re buying an LV shoe, people have to see its and LV shoe. If you’re wearing an LV belt, people have to see it’s an LV belt. And that’s what an LV does to you. The brand is very loud. But if you walk in to a Zegna store, you will not see a Zegna written

anywhere. So, this also plays a big role, I mean, especially in Delhi, people want to see, they want people to know, I mean, you’re wearing this or whatever, so…

M: Okay. So, do you personally feel that luxury is about being loud?

A: I don’t think luxury is about being loud, not at all.

M: So, do you think Zegna would do better in India if they were a little louder than they are currently?

A: Yes yes, of course, of course, they would. In Delhi, for sure. But luxury is not about being loud, I think luxury is about quality and… the real essence of luxury is quality and service. That’s what I would say. It’s not about being loud, I don’t know, I don’t think so.

M: What do you think Indian consumers understand of luxury? Apart from being loud, that too in Delhi, what else do you think Indian consumers understand of luxury?

A: There are few… to some it is about being loud, to some it is about quality, to some… to some they have no idea, to some, they just think this luxury because its expensive… and so if they have to buy something good, they have to buy this… they have no idea what they are buying actually, just because it’s expensive they think its luxury. There are a few people who understand it, the quality, the trends, they are the ones who travel, they know the stuff, but most of them, it is about being loud. If they are spending, they want to show it. Then there is another bunch who have no idea, they’re just buying it because it’s expensive and they just shadow. Delhi market is honestly, Delhi market is really difficult. I’ve worked in Hyderabad, I’ve worked in Bangalore, and I’ve never seen a market so complex. It is crazy. In Bangalore, people really don’t, it doesn’t matter, if they’re buying it, they buy it because they understand the product, and they will ask you all about the product and what it is. Here it is all about, showing. If they buy a bag, they will ask you, where is the brand showing?

M: What about in terms of service? Are the Indian customers very particular about service?

A: Yeah. The Indian customers are very particular about service, they need to be pampered. If they are buying a lot, in their minds they think, they are kings and they need to be treated like that. If at any point they feel they are not treated, you will not see them back.

M: What about their international counterparts?

A: They’re not so fussy. They just want service which, anybody would give. They are not looking for you to pamper them and all that. They are not. Dealing with Indians and dealing with international people is a little different, Indians need to be pampered.

M: You said something about them not coming back if they are not pampered, how much loyalty do you get from your customers?

A: In Zegna you see a lot of loyal customers. You see people who have been buying since the stores opened, 8 years back. They’ve really been coming back and… the retention rate is quite good with Zegna.

M: so there is some loyalty in terms of the Indian Consumers?

A: Yes, yes there is.

M: There are basically two kinds of luxury consumers in India, right? The strivers and the super-rich. The ones who I would basically call new money and old money. Is your brand aware of this distinction? Do they use this distinction in any way?

A: The new rich, the brand is of course, aware, but the new rich is the complex people. The old rich are the ones who are travelled who know what they are buying who understand quality so they are much easier. Like when you speak of the complex stuff it is the people who have become rich overnight. So for them it’s about being loud, they don’t know why they are spending, they’re just spending cause it’s expensive. These are the people who fall into this category.

M: And they are th ones you are most afraid of

A: Yeah yeah. Zegna is not able to tap this market, that’s the problem with Zegna. Zegna doesn’t appeal to them.

M: Because of its understatedness?

A: The brands like LV or Gucci would appeal to them

M: What about their expectations from you in terms of service as well as product? Do those vary as well?

A: In terms of service, I think they are absolutely happy in terms of service. It’s just that Zegna as a brand just doesn’t appeal to them because it isn’t loud. You wear a Zegna suit, it doesn’t show. It doesn’t tell you that you’re wearing a Zegna suit. If you carry a Zegna bag or wear a Zegna shoe, it doesn’t say you are wearing a Zegna. For them it’s all about showing that you’re wearing a Zegna or a Gucci or an LV or whatever. With Zegna, they’re not able to do that. That’s the problem. It’s nothing to do with service or anything else. They’re just not able to connect to the brand because it’s not loud.

M: Have you ever felt yourself that Zegna is evolving because of this difference?

A: Yes, slowly slowly, yes. Because now even, even when we sit down for our buy, we are constantly pushing something which is a little loud, not the entire collection but at least a few products. Maybe the shoes or the bags which have labels outside. It’s not the way the brand wanted to be, but it’s slowly getting that way. So when we sit for our buy, we are constantly telling them, at least start making a few.

M: Do they actually listen to the Indian market considering it’s so small?

A: Uhh… now even China wants it and China is a big market. Even China has a good, huge market which wants it to be a little loud so yeah. Making it not for India, actually, you’re mking it for China. They’re anyways going to make it, so might as well even India gets it.

M: So India getting it is more of like a by-product and not the actual thing?

A: Yeah. It’s not because India wants it but because China wants it actually. The brand is making not because India wants it but because China wants.

M: Thank you so much for your insight

A: You’re welcome