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BW Businessworld

‘We Always Look For Ways To Surprise’

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Luc Hennard joined Hermès as managing director of the Benelux-Scandinavia region in 2003 and then moved on to become managing director of northern and eastern Europe. He took up his current position in September last year, and now manages a region covering West Asia, South Asia, India and Australia. Before joining the luxury brand, he dabbled in the food business for a decade, having started his career at Quick Restaurants in Brussels, followed by a four-year stint at Godiva Chocolates. He is currently based in Singapore. In an email interview with BW, Hennard expounds on Hermès’s Asia strategy, and how it intends to woo Indian customers. Edited excerpts:

With the European and US luxury markets stagnating, are Asian markets now at the forefront of the luxury sector?
The Asian markets have been comparatively more resilient during the last few years, and even if we see some changes now, we’re still optimistic about them. Their potential is good and future growth will come from these markets. If we look at South-east Asia and the Middle East, they have achieved very good performance despite the downturn in the last few years; Indonesia, Thailand and Malaysia, for example, have had good growth. Even if India is not performing as strongly as the others, we can still see a positive trend here. I firmly believe in the potential of Asian markets because of their steady economic growth, the general all-round stability and the rising middle class.

These countries are seeing the emergence of a strong upper middle class which is not only the critical target segment for long-term growth and loyalty, but is also big as far as local purchases of luxury goods go. Despite the adverse global economic conditions, the economies of these countries are likely to continue to grow. 

How is the luxury customer in Asia and the Middle East different from the luxury consumer in Europe or the US?
As in Europe or in the US, luxury consumers in Asia and the Middle East will have a separate profile. Besides, the motivation to buy luxury goods will also be different. The Asian luxury market is evolving and the taste for luxury has changed. While some are looking for branded luxury goods, driven by social differentiation and status, others have a more conservative approach, including how they value a product as ‘luxury’. But the luxury consumer in emerging markets has become more demanding and sophisticated — a more mature consumer. Also, in these markets, we have seen the highest growth rate of connoisseur consumers as they transition from emerging status, which is a good thing for us.

What has Hermès done differently  to cater specifically to Asian tastes?   
Nothing more than what we are now doing elsewhere in the world. Of course, there is the essence of Hermès itself  — exceptional products through our different métiers. We also ensure that we always have the latest designs and colours, so our customers have the same choice that is available globally. Lastly, the entire product range that Hermès has on offer allows us to constantly surprise our customers and create a unique and authentic experience.

Who is an Hermès customer in India?
We’ve been in India for about five years now, first in Delhi and then two years ago in Mumbai, and in both markets we’ve seen a wonderful evolution of our customers. At first, our customers were those who were already familiar with Hermès, perhaps, from their travels abroad. Today, we can say that the Indian consumer is very discerning and aware of what is available across the world. They are not easily fooled, or pleased. Which, I think, is quite an interesting challenge. We are constantly pushing ourselves to understand how we can not just meet their expectations but deliver something unexpected.

What was the response to the saree collection? Are there plans to revive it or launch any other product especially for the Asian market?

The saree collection was an Hermès tribute to Indian culture. It gave us the chance to come up with an exceptional offering. Using Hermès knowhow in silkscreen printing, we presented four styles in different colours that sold out completely from our Mumbai store. It was a novelty to try something like this, and customers appreciated the homage. Being a limited edition, such a collection allows a customer to have a very intimate relationship with Hermès. Interestingly, while the saree was, of course, picked up by long-time Hermès buyers, for a few, it was their first Hermès product. Quite a wonderful way to start a journey with Hermès! And, in the future, we will continue in this direction.

What products work best for the Indian market?
Initially, it was iconic products like silk and leather that were most associated with Hermès. However, with time, we’ve seen people grow to experience the entire world of Hermès products on offer, from ready-to-wear for both men and women to watches and the home collection. It’s very exciting to see the market develop. A very interesting métier for us is watches, and Hermès has introduced particularly innovative movements in the past two years that have been of great interest to watch connoisseurs here. It’s an appreciation for absolute quality and perfection that brings people to Hermès.

Are there any plans to open more stores in India?

We have two beautiful stores in India, one in Delhi and one flagship store in Mumbai at Horniman Circle. We were the first brand to be directly on the street in a market that is dominated by hotel and mall-centric outlets.

These stores perfectly express our positioning in India. We don’t have any expansion plans for the moment but we’re very attentive to further development.

Where do you see the Indian luxury market five years from now?
India is a challenging market, but also the most interesting. It is a young market with good potential and like any new market it requires time for the client to develop a relationship with the brand. With foreign direct investment rules changing, the market will see an influx of international brands that will, in turn, create a more informed customer. For Hermès, India is as much of an inspiration as it is a market. It is an emerging luxury market and slowly but surely we are seeing success.

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(This story was published in BW | Businessworld Issue Dated 07-10-2013)

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