Rivoli to enter Saudi within 12-18 months

 

Rivoli Group is looking to consolidate its retail position within the UAE in the next three years, with emphasis on improving customer retention within the group, according to a senior company executive.

“Our immediate priority for the next three years is to consolidate our retail position within the UAE by being present at all major retail developments and by upgrading our current retail locations,” said Ramesh Prabhakar, Managing Partner, Rivoli Group. The company plans to add more retail outlets to its current tally of more than 215 and believes Dubai International Capital’s acquisition has added immensely to both the image and strength of the group.

Prabhakar (pictured above) spoke to Emirates Business about the luxury market, new offerings for high-end consumers and growth plans of the group.

The number of high net worth individuals (HNIs) has increased in the UAE in the past two to three years. Is that leading to encouraging growth in the luxury market?

There has been a positive and encouraging trend in terms of growth for the past decade within the UAE economy. The growth has been pretty robust and sustaining. This has had a very positive impact on the various business segments within the UAE business domain.

The overall prosperity has also added considerably to the number of HNIs in the region, which has resulted in business gains for the luxury retail segment.

As the HNIs are very informed individuals they have a huge appetite for consuming luxury products and services, which has led to high double-digit growth year-on-year within the luxury segments.

How has the preference of the high-end consumer evolved? What’s on the cards for them?

The preference of HNIs is ever evolving. They are always looking at more exclusive and qualitative product offerings from brands. Within luxury lifestyle retail there are multiple offerings for consumers on the exclusivity front. Bespoke products are now gaining relevance in these markets and people are willing to spend for these bespoke products on a regular basis. Many brands within the Rivoli Group portfolio address these requirements by bringing in limited edition product offerings such as Vertu Ferrari – limited edition luxury communication instruments, Dunhill – Namiki Fountain Pen and Montblanc’s UAE flag pen, which has evoked considerable response in the HNI segment of consumers.

Do you have any priorities and a five-year objective for Rivoli? How many stores do you plan to open in the next three years in the UAE?

We have a clear roadmap articulated for Rivoli Group for the next five years. Our immediate priority for the next three years is to consolidate our retail position within the UAE by being present at all major retail developments and by upgrading our current retail locations within the UAE. We have decided to be in the field of luxury lifestyle retail and want to clearly expand our business portfolio both horizontally by way of introducing new luxury product categories and vertically by introducing new brands in existing product categories. We also intend to further enhance our customer experience.

We will have more emphasis on improving customer retention within the group. These will be addressed through groupwide CRM programmes we propose to launch by the second half of the current fiscal. It would be difficult to give you any absolute number in terms of new store openings in the next three years as this is entirely dependent on the availability of quality retail space. We will be adding considerably to our current tally of 215 plus retail locations.

How has Dubai International Capital’s acquisition of stake helped Rivoli? Do you plan to offload any more stake, or have plans to buy back your stake?

The DIC acquisition has added immensely to both the image and strength of the Rivoli Group. They bring in the body of knowledge and global exposure to the team.

It is great to have a partner of that stature on our side. As strategic partners they are opening new avenues for us and will strengthen our expansion plans of the future.

Regarding your question on the stake, we would maintain the status quo as is.

When do you plan to take Rivoli overseas and to other GCC countries?

Overseas expansion is part of the next five-year strategic business plan, but the definite date plan is yet to be worked out. We are evaluating all permutation combinations to seek an appropriate opportunity.

We are already present in the GCC in Bahrain, Oman and Qatar. Saudi Arabia is an imminent market to explore and our presence will be seen there in the next 12 to 18 months.

Which are the new brands you are planning to bring into the UAE and the region?

As Rivoli Group, we are continuously in discussions with leading international brands. This is an ongoing process but we can’t give you any names right now.

What strategies do you employ to track counterfeiting of products? Has it had an adverse impact on your business?

Fighting fake and counterfeiters is the primary responsibility of the principals. We do assist the principals in any such activity in the market. Counterfeiters definitely affect our business.

What do you see as the most effective way a luxury brand can reach out to its customers? How are you marketing these products?

Luxury marketing is slightly different from the basic marketing paradigm. In the luxury space, the consumer is much more evolved and knowledgeable, and he is looking for exceptional service and product.

These products cannot be sold through traditional “push and pull” marketing techniques, but one needs to be present in the mind space of the consumer.

We invest a considerable amount of our advertising budget in event sponsorships and retail level promotions. We interact with our consumers in a non-conventional way by being present in their environment. We use one-on-one marketing very effectively to reach out to the targeted set of consumers. We use regular advertising as a reminder medium for these consumers.

We are currently present across all major retail developments, premium shopping malls and community shopping centres.

This provides us with considerable opportunities with our target consumers and they interact with our brands whenever they visit these establishments. There is a silver lining to the whole gambit, which is our inherent R-philosophy.

Do you believe that luxury brands need to embrace blogging as a way to increase their reach?

Blogs are a recent evolution on the internet and they add immensely to disseminate information on the brands. Blogs are an exchange between consumers.

Certain brands have embraced blogging as a marketing communication tool and have been very successful. As the medium gets more penetrative, there is a possibility it may be used as a communication tool for all kinds of products and brands.

How can brands communicate luxury buying as a real-world experience online? Are you doing anything on this front?

The internet has begun to play a role in influencing brand awareness and perceptions, and according to a survey was found to rank second only to word-of-mouth in influencing people’s purchase decisions. Online shopping is growing steadily the world over and people are buying online, but the medium is still confined to self-consumption and standardised product offerings. The real-life shopping experience is all about touch and feel. But the medium cannot be ignored.

We already have in place a very comprehensive website, which includes product/ brand catalogues for customers to readily access information.

All our stores within major malls are listed along with the various product categories. Our website also informs browsers of special offers and promotions and the latest happenings within the group.

International companies are opening  boutiques looking at the wealth in the region. Are you facing a tough challenge and fear losing some of the renowned brands that you market now?

As the regional markets expand and offer many opportunities, principal brand owners will set up shop in the UAE and this is reminiscent of the fact that retail is growing at a very healthy pace. These changes are not new in terms of the international business scenario and these kinds of realignments provide better opportunities for both the principals and distributors in the region.

The direct entry of international players will uplift the entire market structure and they will introduce best global practices to the region. We do not face any challenge of losing our brand franchise to our principals.

 

For Prabhakar, the future was a path charted by his parents, which included a career in maths or physics. But life has a way of throwing a curveball and his education at Loyola College in Chennai, Tamil Nadu state, south India, followed by a degree in economics from Madras University, was soon converted into a professional career in management.

With a strong educational background, well-grounded roots, a family-oriented upbringing and three infallible winners on his side – confidence, strong interpersonal skills and incredible attention to detail – Prabhakar moved to Dubai in 1979 to pursue a dream, which later helped define the economic and social fabric of its time in this region.

Joining the Rivoli Group in sales and marketing in 1985 Prabhakar soon climbed the ranks through his hard work and practical training in the field.

His dexterity enabled him to aptly combine the necessary skills of a good marketeer with the leadership qualities, thus allowing him to achieve the designation of general manager in five short years.

Under his supervision and foresight, the Rivoli Group witnessed a meteoric rise in the 1990s.

The Emirate was entering its first phase of economic boom at the time, and Prabhakar looked at this as an opportunity that the organisation could utilise to its complete advantage. While the Rivoli Group’s wholesale distribution was growing efficiently, special emphasis was given to the retail division.