"We have understood that we have to be optimistic and aggressive in India"

The world has turned on its head. What used to be revolutionary when he started out 40 years ago-women wearing men's clothes, or men wearing pink shirts and long cardigans-is more the norm today. Yet, Luciano Benetton, 71, remains an optimist and romantic at heart. He's now looking for new ways to grow the market for this business. In India, for instance, he is exploring the opportunity to go beyond the 45 cities Benetton has established a presence in. "That also fits well with the company's motto-to make fashion affordable and accessible to all," says Benetton. With worldwide revenues of more than m1.9 billion (Rs 11,020 crore), and India just about topping Rs 100 crore, Benetton believes India is a market whose time has come. Set to touch 110 stores by the end of the year, India, along with China, can only go on to become the Number One markets, he says. Recently in India, Benetton spoke with Business Today's Shivani Lath on his learnings, controversial advertisements and plans for the future. Excerpts:

With the Indian market contributing less than 1 per cent to Benetton's revenues, how important is the country for you, and how has it changed over the years?

We are very excited about India. We have had a presence here since the 1990s and have seen major changes in this market over the last few years. The good thing is we have been part of these changes. We now have to put in our best efforts to increase our presence here. We have understood that we have to be optimistic and aggressive to accelerate our presence. We are confident about the future because we believe it will get better. For sure, India has an important future ahead of it, as a market and as a country. It's a big country with a big future.

How does India compare to other markets you operate in?

India and China are seeing huge growth and these will be the markets of the future. Potentially they can become only Number One in the international arena. Obviously, this will not happen next week, but the potential is there to play a very important role. We have been surprised to see that we have been growing at 30 per cent every year in India. Of course, if you compare revenues over here to other markets, it is not outstanding, but they are satisfactory and encouraging enough to make us believe in this market and invest for the future.

What has been the business strategy in India and how has it paid off for the company?

For India, we have always made available the products that are available in other markets. So the styles are all the same. At the same time, India, we know, has strong traditions and culture, which we have to respect. Our aim is not to substitute the local culture or traditional clothes, but to make available clothes for some other occasions when the sari or salwar is not that easy to wear. We are not here to replace traditional values. We have started production of clothes here with some partners for our kids section. To increase penetration in the market and distribution and also to increase our capacity, we are partnering with local manufacturers to make products available for other countries.

How many such partners do you have in India?

I don't know the number. To give you an idea of the extension of the partnership, it should be enough to know that about three years ago, we were operating only in New Delhi. Now, with increasing quantities and volumes, which is up substantially over the last few years, we have sourcing offices in Bangalore and Coimbatore.

What is your understanding of the Indian consumer, and how did you arrive at the assessment?

There are many Indians travelling around the world. We have met many of them in London and Europe and we have understood from our interactions that they welcomed our products. So that is how we started in India.

"Being revolutionary is part of our DNA. Our advertisements go against the rules, they are not traditional"

Is there a separate design team for countries with different cultures like say India, the Middle East and Italy?

No, we don't have separate teams. We are present in 120 different countries so we cannot have separate teams. The development of the collection happens in Europe, but our designers travel around the world collecting ideas and putting them together in order to make available a collection that is acceptable to all the markets. It is a collection of inputs on fabrics and styles from different designers, which results in one main collection.

Is there any country you had to leave out of your expansion plan because it doesn't fit with the brand?

We have had no problems. It can happen that in some countries, because of political instability, we cannot operate. But only exceptional events can force us out of a country, nothing else.

What is the positioning of the brand today?

The brand has been around since 40 years. We have always targeted the young customers, which is the most demanding set of people. We believe we give them value for money.

Why are Benetton's advertisements restricted to print and outdoor? What's the strategy behind not being on television?

The TV is a very expensive medium. To deliver a strong message you have to invest an enormous amount of money. With our presence in 120 countries, we cannot make such investments. Also, the peculiarity of our ads means they are stronger on hoarding and billboards where the message can be delivered and also memorised. So, we have never gone beyond the two channels-print and billboards. And it doesn't mean TV is not important, to the contrary. But we don't want to be present in every media. At the moment we are not thinking of this option.

How much is Benetton's annual spending on advertising?

Communication for us is not just about advertising or fixing posters in a city. We develop new forms of communications, and also have sponsorships. So, 3.5-4 per cent of revenues is spent on advertisement.

Benetton's advertisements tend to be provocative. What do you seek to achieve and have you been successful?

Being revolutionary is part of our DNA. When we started out and girls began to wear men's clothes it was considered revolutionary and provocative. So are our advertisements-they go against the rules, they are not traditional. Yet, I have to say, we never meant to be provocative in delivering the message of fraternity and harmony by putting together people of different colours and races. When we showed people of different races hugging each other in our advertisements, we did not expect to receive letters of complaint against our strategy. It was surprising to find out that our positive message was misunderstood and interpreted in the wrong way.

Which is your personal favourite advertisement of Benetton?

I cannot choose one because all of them were made at a particular moment to deliver a particular message and all those messages have an important meaning for us. And the purpose and reason to communicate that way was to be useful to society, to start a discussion. At the time of the cold war, we put together different races-a Russian and an American kissing was a revolutionary message. It has been our philosophy that a war is never the right solution to a problem. The message was that it is better to discuss something controversial rather than go to war. When we started advertisements related to aids, it was a problem not known to most people. That was a glorious campaign to awaken the conscience of the world. More recently, we did some ads with the United Nations and Red Cross to fight poverty. Our aim is to sensitise society that despite all the wealth around, there are these very big issues to discuss.

"The founders of the company have decided to step back, it will now be run by managers"

Which has been your most challenging assignment?

To win the Formula 1, not once, but twice. If you remember, Michael Schumacher was found by Benetton. He won the first two championships with Benetton.

In terms of entering a market, which was toughest?

In general, there are no easy markets anywhere.

Forty years ago, four siblings got together to launch Benetton. How did it happen?

It started as a simple game, something which happened because I liked fashion. During the Olympic Games in the 1960s, when there were all these colourful people and flags, I got this idea to enlarge the colourful world. It's never been a job or profession for me, it's my passion. I started it with my two brothers and a sister, so it was easier than beginning alone.

How has the apparel industry changed since you started out 40 years ago?

Everything has changed. When we started out, the world was simpler. The youth too were simple and easier to please. Today, everything is more complicated. The offer is much bigger and people are more interested in what they wear. For sure, it was very exciting and beautiful in the early days, even though it was simpler. But because we started from scratch, it was also challenging. We became revolutionary at that time and became popular among youngsters because of our colours in a world that was only blue and grey. In those days, to be revolutionary, it was enough to wear a yellow sweater or a pink shirt. To be different or provocative, people wore long cardigans, and to show they were ahead of their times women used to dress like men and men wore feminine colours.

Italy is the fashion capital of the world. How did Benetton make itself unique?

Yes, Italy is the country of fashion, but Benetton started 40 years ago when fashion was also at its beginning. So we consider ourselves as one of the trend setters that made Italy famous across the world. Benetton was another of the revolutionary ideas in those years. But what really differentiated us was the fact that we wanted to make fashion affordable and accessible. I knew that would be possible only if it was on a big scale and a volumes game, so that's what we did. In that sense Benetton is unique. We invested in franchising. We spent a lot of time and money working with partners.

If you were to start the business today, how different would it have to be?

Today the world is another world. It has changed dramatically. What was revolutionary 40 years back is normal today. To dress like a man is not revolutionary or special anymore. If you have a dream to build a brand and a company and you want to grow to 120 countries with limited resources, which was our case, it would be impossible today. Yet, I think, in today's world, you can still make a mark with a new idea.

Benetton is still a family run business. What is your succession plan and strategy going forward?

The founders of the company have decided to step back. The company will now be run by managers. This doesn't mean the family will not look at the business. There will be a representative who will overlook the managers and this person will be my son Alessandro.