CPPLuxury, 3 October 2018: In conversation with Andrea Bonardi, Managing Partner Texere Advisors
What was the motivation behind setting up Texere Advisors?
Texere Advisors was started in 2013 after 8 years spent in Asia developing from scratch the La Perla retail presence in the region, and 5 years in India as head of the Indo-italian Chamber of commerce. These experiences have confirmed that, despite of a globalized market, European brands still find it hard to develop a relevant strategy in Asia. I therefore wanted to share this important background and network with European SMEs interested in developing their retail presence in Asia, helping them to overcome and tackle the numerous challenges ahead.
Which are your company’s core competencies? How would you describe your unique edge / competitive advantage versus any of your competitors?
Texere Advisors is specialized in retail development and operations, focusing its activities on a 360° retail development and expansion for our clients’ brands, by building or restructuring the retail network, by growing the brand awareness through events, media activities, in a nutshell by taking care of the full operations of the brand in Asia. We truly operate as an extension of the clients’ management, a sort of extended Asian branch office, sharing a business plan, and monitoring it throughout the project, that is usually a long-term partnership.
The business model we operate is very successful as it gives long term support to our clients, it makes them comfortable working with us, and actually helps our clients management learn about Asia and then eventually also change some practices at their HQs to better suit the Asian market.
Tell us more about the profile of your clients. Does your know-how appeal to companies of a certain size / calibre?
We only work with brands that have a potential to succeed in Asia, that is companies with a turnover of at least 30 million euros, a good brand awareness in Europe, and lastly an existing retail network in the domestic market. We work with brands approaching us for different reasons, either to restructure their retail presence in Asia, or to build it from scratch. We then advise them on a tailor-made marketing and PR plan that helps their brand awareness and sales performance.
You may like to read about some practical cases here . At present we work with companies that are mainly form the design sector, because this is the trend now in Asia. But we have worked with fashion and accessories brands as well. Overall, what matters is not so much the product category but the retail experience. A successful retail in Asia has certain requirements that are common to all product categories, so we are very glad when we can work with a brand that belongs to a category we have never worked with.
What has been the key in building your company’s expertise and in-depth knowledge of the Asian market? Any challenges that are most often come across?
The roadblocks to success in Asia are not so evident as they are often hidden in the smallest details which are often neglected. From negotiation techniques, to cultural differences and managerial hunches, these skills can only be acquired through countless encounters with partners from different professional backgrounds and different stakeholders, that is landlords, retailers, distributors, media, peers from the industry. It is a know-how that grows every day and that requires continuous travelling and an open mind. Asia is in continuous evolution and we must be open to adapt and change with it if we want to give value to our clients and succeed in our projects.
This learning process however is slow and requires a careful cultivation of professional and personal ties with partners in Asia. Reputation is key, and this is difficult to build.
The biggest challenges do actually paradoxically come from the brands we work with, as it is always difficult to explain to their management or owners the cultural sensitivities and practices that are predominant here. Our biggest achievements are when our brands finally understand and adapt. Usually at the start of the project they have a very stiff attitude towards the market, but then soften up and become more commercial and then start growing. It is a long process but it’s a great satisfaction to us when we see this change happening.
What is your view of retail expansion through a local partnership versus directly operated stores and local subsidiaries in Asia?
There are pros and cons with both options. I would go for a mixed strategy, that is a direct presence in key markets, such as Hong Kong, Singapore, that are also easy to manage from an administrative and legal point of view; and a local distributor in secondary markets, through reputed local partners.
Nowadays, as the retail market has become very competitive, expensive and risky, distributors have become very choosy and brands with no retail in Asia find it increasingly difficult to penetrate the market. They first need to prove to stakeholders that their retail model is sustainable, or else find it very hard to convince a partner to invest in their retail. This is especially true in the fashion, accessories and jewellery industries, less so in design and cosmetics.
In general, brands that have developed a retail network in Europe, but which are not yet present in Asia have right now some rare opportunities to take locations that in other times would be impossible to grasp. Brands with no retail presence whatsoever, have no chances at all.
In any case developing a retail presence in Asia, indirect or direct as it may be, requires a very strong back-office, a perfect supply chain, a sophisticated marketing and PR strategy, an innovative product, an excellent customer service, a pricing strategy, a flexible mindset. All this requires large investments anyway, and any brand needs to be aware of this or else it’s doomed in Asia.
Given your expertise, what is the secret behind companies being able to achieve customer service levels similar to the Asian market?
In Asia, retail encompasses the full customer experience from start to end. It consists of brand awareness, sophisticated and innovative marketing communications, an efficient supply chain and impeccable customer service. To remain relevant in a fast-changing retail environment, a constantly updated product, an international and dynamic management team and the ability to adapt to each socio-economic context is also crucial for success.
Asian customers are very technological, young, in a continuous evolution of tastes and preferences, and few brands are able to keep up to these changes. Even big luxury brands have had problems in the last few years to understand and adapt to an ever changing customer, let alone the smaller brands that do not have such large resources. Brands then need to keep listening to the market, never stop to criss-cross Asia, never take things for granted, they need to be open and flexible. Those companies that learn to operate this way will always be successful with their customer service.
Do you believe that creating limited edition or capsule collections dedicated to the Asian markets may be part of the success in bridging West and East?
I fully believe in Asia exclusive collections! Especially with this rising trend among luxury retail brands like Gucci, Fendi, Longchamp, consumers and millennials of today are always on the lookout for sought-after exclusive novelty drops which are unavailable everywhere else in the world. Delving deeper into exclusivities, many brands are banking on this ‘exclusive’ opportunity for social media and e-commerce platforms in China, especially with mobile being the largest digital channel now.
In November this year, Texere Advisors is organising a retail conference in Milan. Tell us more about it.
“Retail in Asia 2018”, that will take place in Milan on November 19th, wants to share with the participants our experience in Asia.
Generally, organisers invite very prestigious businessmen with multi-billion-euro brands to address their luxury or retail conferences. As a matter of fact, these speakers have nothing or little to do with the vast majority of their peers, normally companies with turnovers anywhere between 20 and 100/150 million euros, with different dynamics and ambitions.
Our retail conference wants therefore to address the remaining 95% of brands, that share the same difficulties when tackling the Asian market, sometimes simple and yet crucial issues that can make a big difference, such as negotiation techniques, cultural sensitivities, communication gaps, lack to attention to details…
Two distinct panel discussions, the former consisting of owners of small and medium successful Italian brands, the latter of prominent Asian retailers, will explore the approach European entrepreneurs should consider when negotiating with prospective Asian partners. Interviewed by a TV journalist with remarkable professional experiences in Asia, Asian and Italian panelists will dialogue and share their experiences and expectations, thus ideally replicating a real discussion that you may witness around a negotiating table between two parties.
The conference actually answers a demand, which is often hidden, for practical know-how and operational best practices discussed by business owners who have a direct and personal experience in Asia, and retailers that every day choose and select those brands that “deserve” to be represented in their retail spaces, or are not able to make it.
Your readers are warmly invited to attend the conference, and are free to visit our website here.
See original article: CPPLuxury, 3 October 2018