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With a focus on increasing its retail presence in India, German luxury writing instrument maker Montblanc opened a new boutique store at Hotel Taj Mahal in Mumbai on Tuesday evening. This is the company’s sixth boutique store in India and second in Mumbai (the first is at Palladium Mall). Apart from writing instruments, the 101-year-old company also operates in segments like watches, leather goods, accessories, refills, eyewear and fragrance.
A subsidiary of the Swiss holding company Richemont, Montblanc re-entered India last December in a joint venture (JV) with the Titan Company Ltd. The company previously retailed through a distribution agreement with cricketer-turned-businessman Dilip Doshi’s company Entrack International. The agreement fell through when Montblanc announced a JV with Titan in 2013, resulting in a legal tussle with its former partner. The matter is currently sub judice.
Prior to the boutique opening, Eric Vergnes, president of Montblanc Middle East, Africa and India, spoke to Forbes India about the impact of the legal issue, the strategy to redevelop the brand and its retail presence and the growth potential he sees in India.
Has the legal issue with former India partner Dilip Doshi impacted the brand, and sales?
It of course had an impact on the sales because we had a period during which the brand was not represented in India. The best we can bring to the Indian market today is to build a proper network and accelerate the number of boutiques and stores where you can find Montblanc products.
With the world getting increasingly digitised, what is the growth potential for luxury pens? Do you see a change in the buying behaviour of consumers?
It’s a very good question. Yes, the world is becoming more and more digital, and in the world of smartphones and tablets, we tend to believe that there is less and less use of writing instruments. We are, however, catering to a different segment of the market, which is the luxury segment. And surprisingly, we are still growing.
What is the growth rate and what has enabled it?
Although Montblanc is growing through multiple categories, the most mature segment is writing instruments and here we are enjoying good one-digit growth. One of the key reasons for that is that we are the market leader in luxury writing instruments and are synonymous with luxury. Secondly, we invest a lot year after year to ensure that we bring consistency, novelty and fantastic craftsmanship to the market.
What is the growth potential for Montblanc in India?
We have just restarted in India. So it is not a big part of our turnover yet. But our market share in India is developing fast with the emergence of a new upper middle-class. This is one of the reasons why we have come back with our joint venture partner, Titan, to develop the brand all over India and accelerate the process. We are bringing to India the products at the same time as the world and there is no exception. The best sellers in Hamburg, London and Dubai are the best sellers in Mumbai and Delhi.
Could you throw some light on Montblanc’s expansion strategy?
We have six boutiques at present in India and 37 doors have been reopened in wholesale, where we have retailers selling Montblanc products along with other luxury products. But we are very selective of where we want to reopen. So we will add another 10 wholesale doors. We would also like to add another 10 boutiques, give or take a few, by March 2017. Overall, we are looking at a network of around 35 Montblanc boutiques in the next few years. But we want to ensure that we select the right location – both in terms of business development as well as brand building.
Would you also be looking at e-tailing?
No, we aren’t looking at ecommerce currently. Our priority is to ensure that the shopping experience is a proper Montblanc shopping experience. But it doesn’t mean that we will not be looking into online in the future.
What are some of the marketing activities for Montblanc in India?
Marketing is part of our relaunch activity and a good part of our budget – be it through magazine, press or digital. We are currently finalising the media buying process for this. We will use Hugh Jackman, our global ambassador, for advertising in India as well.
Who is the ideal Montblanc customer?
Our target group is large and diverse. We are first an aspirational brand and we are very fortunate to have a large appeal when it comes to India. We are targeting a younger generation buying their first luxury good or writing instrument. Also, we have a faithful customer base which collects writing instruments for years and for them we have special and limited editions.