John Obayuwana, CEO, Polo Luxury Group, last week hosted Alessandro Patti, CEO of Cartier Africa. It was Patti’s first visit to Nigeria, to assess firsthand, the possibility of a long-term investment in the country. In this interview with OLUSEGUN ABISOYE, the duo discuss the Nigerian business climate, details of their partnership plans and more. Excerpts:
Obayuwana, having struck this partnership with Cartier, how do you intend to leverage on the platform provided by such a global luxury brand
John Obayuwana (JO): Its absolutely fantastic, its a huge opportunity for us to work with such a strong brand as Cartier. We can leverage on the technical support which they bring, we can leverage on the marketing support, we can leverage on the training, we can leverage on the quality of service they provide.
They can guide us through the whole process of how to delight the customer. All of this is huge for us. It is absolutely a huge opportunity to be able to go through the door of this house of knowledge, wealth of experience and be able to draw every thing that we need to aspire to support the local consumer. It is indeed a huge opportunity and we are exploring it.
Patti, now that you have come to Nigeria and have a partnership with Polo Group, what should Nigerians expect from you in the next five years
Alessandro Patti (AP): This is my first trip to Nigeria and I met with Mr. Obayuwana (of we have met before in Switzerland a few times), but the goal of this first visit is to investigate… what I’m saying is, it may be too early to say what Nigerians should expect from us in the next five years.
But part of what we are here to do this first trip is to see how wide is their (PLG) distribution network, and to cite our business. Then, when we have done a diagnosis of the market, I’ll be able to answer you.
But what I can say for sure is that Nigerian clientele in Nigeria and abroad, especially those based in Europe, they are among the top clients for us. So we want to bring them the best service in Nigeria through our partnership with Polo and abroad through the service of our offering to them.
Polo Luxury Group doesn’t seem to have much presence on the net. Any reason for this
JO: We do have some internet presence where you can see our activities generally and other things you want to know about us. But we are not an internet retail organisation, that is one. Also, our presence on the internet is limited, very, very limited. Our presence on the internet is more about our corporates, our identity.
You are not going to find us on the internet with products, with prices, and everywhere on the internet. And that is how it is with most luxury companies.
They don’t have internet retail possibilities. So we don’t have an internet presence that is very strong and that is very big. But now we are developing and as we bring in some products that are little bit more middle class oriented.
Patti, how do you support your products and with the price tag that your products come with, do you think Nigerians can afford them
AP: We sell our products through diversified strategies. In Europe, we have also online sales, so you can buy our products online. This also obtains in United States and Japan. We have evidently, a massive media campaign; most of the media campaign is through top quality newspapers and top quality magazines.
We also have Cartier movie campaigns. Every two years we produce a short movie. The last one was produced a year and half ago. Another way we promote our products is through CRM activities; contacting our clients directly, our boutique clients.
This is because Cartier distributes its products primarily through two channels: We have our boutiques and then we have dealers. One of such dealers of Polo Group. Our boutique owners directly contact customers through catalogues, cocktails. These are the main channels through which we support our own products.
Then as regards the matter of price. Price is a matter of income availability and what is super expensive for one person can be extremely cheap for the other. So, the price positioning is absolutely a personal point of view. This is why it is said that the difference between the man and the boy is the price of the toy.
What we want to do is that we have a very wide category in watches, jewelries, in accessories, in leather goods, and we have entry price products for those who have the dollars. We have a wide collection of products and our goal is satisfy the expectations of our clients. We target giving super quality products; that is our goal.
Obayuwana, given Nigeria’s rebased economy, what is your projection for the Nigerian luxury goods market in the next five years
JO: We expect it to grow stronger and stronger. We have faith the Nigerian economy; we have very strong faith in the Nigerian enterprise and we are very sure that if we measure government policies at the macro level, privatisation, investment in the agricultural sector.
We believe that the growth of our economy can even be stronger, and when that happens, we will have more of our citizens joining the middle-class and that opens up businesses.
While projections in terms of actual figures are difficult to ascertain, I just believe that the prognosis are very strong. The potentials can only get stronger and stronger. Other sub-sectors are also showing positive signs.
Patti, earlier at the press conference, you mentioned your experience in emerging markets. How will your experience in other emerging markets help your work here in Nigeria
AP: Very good question. Our goal here (in Nigeria) is to implement the correct business model, at the correct time. This is because if you open too early a retail network, but on one side the rising middle class is not ready yet, but there are just a few hundreds of very rich people, your business model will fail because you have structured to make volumes but the clients cannot still afford your products. This is just what we think but it applies to other luxury brands, the way they structure important investment in retail but they failed because there not enough clients.
Our main task here is to size up the real dimension of the potential (of the Nigerian market) this year, in three years, in five years, in 10 years. Then we’ll be ready with the correct network, the correct business model. How to avoid a non-profitable investment, that is the biggest challenge we have.
We have a success story in China. We entered before anyone else in 1992, and we started opening stores in major cities, and while the middle class was rising we were opening stores in minor cities in order to sustain an organic growth.
Let me give you another example: Without mentioning any name or country, there was this global brand that said, ‘There is a huge potential in the country, so let’s set up in this country with our name, our products, we are absolutely welcome worldwide, this country will soon accept our products…’ They failed.
The local clients in Nigeria, they don’t know Cartier, but they know Polo. So, you need a very strategic, well-known and well-respected partner. So to succeed in a new market you need a good partner that is spreading out the message; we cannot do without it, we need a good partner.
For example, there are other strong economies in Africa but we don’t have the right partner there. So, we are not able to make a long term ambition there. Much of the time what you have are dealers who come to you and say, ‘Give me the products, I’ll double the profits in two years.’
In brief, the answer to your question is, we need to set up the correct business model according to the potential of the market and open big stores that will satisfy the needs of our clients. Also our desire is to set up a long term business with a very strong local retail partner that is strong in the area of service, knowledge, finance.
So, there is need to be careful going into an emerging market because many times, global brands want to go into an emerging market and they want to do what I call, the big offer.
