The Indian customer is more loyal: Diesel founder

Renzo Rosso, founder of Diesel, believes that real quality of life and real luxury can only come from eating well
Image: Joshua Navalkar

Last year a visit to India resulted in Renzo Rosso, 61, the founder of Diesel and chairman of the OTB Group, creating a set of designs inspired by cricket. A lifelong football lover, he admits he was a little sceptical at first, but once he saw the IPL he was sold. The result: A limited edition set of 32 pieces of jerseys, sweaters, jeans and jackets made with the Mumbai Indians logo (both Reliance Brands, with which Diesel has tied up in India, and Mumbai Indians are owned by Reliance Industries which also owns Network18, publishers of Forbes India). In an interview with Forbes India, Rosso talks about Diesel’s journey in India, and how he is pleasantly surprised by the pace of change.
Excerpts from the interview:  
 
Q. Diesel was launched in India in 2010. Have you been satisfied with its performance?
The first year was okay, and so was the second. In the third year we started feeling some difficulty. There was some resistance to our prices as our jeans are quite expensive, and it took a while for people to really understand us.

We promoted our brand a lot, and that was when we were able to take our message of quality across. Now we are very happy as we have 12 stores across India and I am very proud of what we have developed.
 
Q. How would you compare the Indian market to other markets that you entered at about the same time, and how is the Indian customer different?
We started in China at more or less the same time that we started in India. In China, the market grew faster while India was slow to take off. In China, the luxury market took off very fast, and we were able to expand more rapidly. I think the Indian customer is more loyal and is more quality conscious. But he is very cosmopolitan, travels all over the world, and is aware of the latest styles. The Chinese are looking for more fashionable clothes and they are less price-sensitive.

Q. How does Diesel expect its business to evolve in India over the next five years? How many stores do you expect to have, for instance?
I think we can double our store count in the next five years. I am very impressed by the pace of change in India. And also by how rapidly Mumbai has changed. Increasingly, we are not seeing stores as a key point of distribution; ecommerce will play a bigger role. Stores will become a place where we can showcase the brand but the main growth will come from ecommerce. As of now we only sell accessories like watches online. But I see us selling our entire range online in the next 12 months.
 
Q. What has surprised you about India?
How fast things have moved in the last one year. Earlier, when we tried to open a store, it was difficult due to the number of processes—it took hours and days and weeks and months with our lawyer to get things off the ground. I am surprised how much faster it is now. There is still a lot to do, but from what it was, it is much better.

Q. Venice’s Rialto Bridge is in bad shape and you’ve made a personal donation to help fix it. How did that come about?
I believe entrepreneurs need to increasingly take care of society and contribute to social causes. The authorities are often too busy and often they don’t have the finances to fix things like this. So OTB [Only the Bad] is a very modern group in the way we work, i.e. we work very hard but also part of what we do is we participate in social causes. The Rialto Bridge was on the verge of falling down, and I felt it was our responsibility to keep it solid and in good shape. Shimon Peres, the former Israeli prime minister, who recently died, said, “Multinationals can be more important than governments as they are based all over the world.” Earlier, our donations were ad hoc, but now we focus only on social responsibility. If we are producing in a particular country then we would, say, try and build a kindergarten for that area. So we try and do something for the community we operate in. We are now in the process of doing things in Africa. The model that we are choosing there is of social entrepreneurship. We choose social enterprises that are sustainable, innovative and bring about direct social impact. We have invested in a business in Angola, through Apopo [an NGO] that trains rats to identify landmines.
 
Q. Your organic food business has also done very well...
Four years ago I started NaturaSi. I was born on a farm, and I feel that real quality life and real luxury can only come from eating well. You are what you eat at the end of the day. When you have lunch or dinner and you eat, it is one of the best moments of the day. I spend a lot of time on how to be nice externally with our clothing, shoes and bags, and now I also spend time on how to be nice internally. It is now a €350 million business and we have 200 retail stores, and we don’t sell to supermarkets as we want to control all parts of the supply chain. We are now expanding to other territories in Europe after having a successful start in Italy.