“Luxury is different things for different people. It’s not a rational argumentation. It’s an emotional purchase,” says Mr Perry Oosting, President & CEO of Vertu. We hear more from this man, who is single-handedly leading the luxury mobile phone category, and very well at that!
Dressed in an Ermenegildo Zegna suit, with an A. Lange & Sohne watch on his left wrist, and settled in a plush suite at The Leela Palace New Delhi, Perry Oosting couldn’t have set up a better ambiance to talk about luxury. The only contrast was that though we were surrounded by traditional luxury, we had actually gathered to talk about luxury in technology.
Being the President and CEO of Vertu, the world’s first luxury phone brand, his appreciation for true luxury comes naturally, also because he has spent 26-27 years in the luxury industry. Anticipating knowledge and lot of insight into Vertu, we further talked to him. And neither did he cut back on words to iterate his opinions and ideas!
India Focus
Mr Oosting was in India to celebrate the opening of their first store here at DLF Emporio. As a part of the celebrations, they were also talking about their association with Smile Train with a series of photographs by Mary McCartney, who happens to be Paul McCartney’s daughter.
Praising his partnership with Matrix Distributors in India as “great”, Mr Oosting said that they were already making profits in India even though they were being retailed at multi-brand watch and jewellery stores here. The obvious infrastructure limitations in India didn’t allow them to open a store earlier. But DLF Emporio was the first mall in India which they felt was appropriate for their brand. “In a mono-brand store, you have a total brand, total selection, dedicated staff who can express the brand the right way. A multi-brand serves multiple brands, so they can never be on that level for a single brand. This is not a criticism, but normal human behaviour. You cannot be a specialist for each brand. But in a mono-brand, you can give lot more access to the brand and can show the total collection,” he further explained.
The recent allowance of 100 per cent FDI in single brand retail has increased a lot of expectations from this market even though the 30 per cent local sourcing clause is playing quite a dampener. Mr Oosting, too, wasn’t excited about it and didn’t want to change the current setup. Citing limitations in luxury retail space, he preferred operating through local partners as the best India route for the time being.
Changing scenes
There have been, however, quite a few changes within the company. And Mr Oosting is content with recent sale of Nokia’s stake in Vertu to EQT VI. “The whole team is very excited because we can finally make the company fit for purpose. Second, we have a great partner with EQT, because they put us on their priority list with a board that is really focused on giving us support. Within the Nokia portfolio, we were just a small fish in the pond. We were not strategically important to Nokia. Yes, they helped us, but we were not top of mind. But the good thing was we always delivered the numbers, and always over-delivered, both on the top and bottom line. So in that respect, we were no distraction for them. Nevertheless, all our operating systems and processes were of course Nokia. They were good for Nokia and in certain instances for us, but not always, with respect to the size of business we were running,” he said.
Luxury brands have been diversifying quite a lot in a bid to get increased business. The result? We now have luxury phones from watchmakers like Ulysse Nardin, and fashion brands like Dior and Versace. Mr Oosting considers this a positive development though, not a threat. “I see it as a compliment because we were quite alone. And if you are alone on the beach, with whom do you share the beautiful beach?” he says smiling like a Buddha. This snatches their chance of being a monopoly in the luxury mobile phone market, but Mr Oosting clears the air that that was never their intention anyway. On the contrary, it helps them to stay on the edge, keep doing better, remain dynamic and keep evolving.
The king because…
These other brands aren’t a threat also because Vertu gives a better overall offering according to him. “We are much closer to the car market where you see performance technology and craftsmanship materials coming together,” he says. Apart from the actual product, Mr Oosting differentiates on the basis that none of the other brands have a dedicated retail space for their luxury phone category. Vertu, on the other hand, delivers everything, from the UI (user interface) design and the UX (user experience) to the service proposition and key differentiating materials.
Certain detailed aspects also make a difference to the product. “Talking about crocodile leather on the device, we only take the middle of the skin. That leads to a lot of waste, but we believe that’s the most beautiful part. And we do tumble testing on ceramic, which includes dropping and rubbing sandpaper over leather, because obviously the durability has to be tested. We do ruby bearing in all keys to make sure you can click as many times as you want without any distraction or deformation,” he explains. But this is just the tip of the iceberg. Much like A. Lange & Sohne, where the engraver puts a metaphorical signature through his or her design, Vertu phones are actually signed by the craftsman who has put the entire product together. Their in-built members club gives concierge services to the proud owner of a Vertu phone. And what’s most astounding is the 24 months time needed to build one Vertu phone. “It’s our lead time from concept, design to testing. There are a lot of restrictions and you need to make sure you comply with the law. It’s much more complicated than a handbag which is a one-dimensional product. We are almost three-dimensional. We have to consider and assess partnerships with payment solutions and other devices. It’s a great category and it never stands still.”
So at the end of it, ask him what the five key USPs of a Vertu phone are, he easily counts them on his fingers: “Quality build; sensorial durable material; optical performance strength; sound like you have never heard in a mobile before; and services that give you peace of mind.”
In fact, Vertu takes a step further with the varied applications they provide. They recently collaborated with Ferrari to create a functional and innovative application which centers on parking of luxury cars. “When we spoke to Ferrari owners or other luxury car owners, they all admitted to facing the problem of where to park their luxury car. We have combined our application with normal parking apps that are available as just a mapping solution – on where you could park secure – which is usually in a luxury hotel,” Mr Oosting explained. In Russia also they are looking at solutions to switch different keypads for different languages, that is, Russian-English. “These are the elements we’d love to work more on through partnerships. But we are still relatively small with tons of ideas. We are running hard to realize them. But, of course, we need to deliver something which makes sense. We don’t just want to make a normal application and put lots of colours on it. We want to create and curate,” he says.
A smile and the future
Why Smile Train? Why not larger, more important causes like poverty or hunger? Smile Train gives medical attention to children who have a cleft lip and helps them smile again. Since Vertu, a phone, is built on the sensory elements like listening, speaking, seeing, hearing, with speaking being the most essential, Smile Train fit the brand ethos perfectly.
“Instead of doing a very expensive product, we said, you know, it’s not about doing something expensive and selling it to the cream. Let’s do as many quantities as we can at the entry price and push ourselves. So we made devices for Euro 3900 (the price point in Europe), each sale of which gives one operation to a child. And we are putting a lot of PR and marketing behind this project, also to help Smile Train get additional awareness and therefore indirect support from other avenues,” said Mr Oosting. Adding glamour and substance, Mary McCartney went around the world and took photographs of children, partly helped, partly not yet helped. These photographs were put together in a book, which is sold out already, and those proceeds also went to Smile Train.
And since no interview about the Indian luxury market is complete without talking about its closest rival China, we posed the question to him too. Echoing the thoughts of many other luxury brands, Mr Oosting also says that China is way ahead of India. But there are various factors which make China the darling. Chinese buy goods abroad as well, especially since Chinese credit cards are being well-accepted throughout Europe. Tax situation is much smoother in China. “But everything comes and goes,” says Mr Oosting, “First it was Middle East, then Russia, then Japan, now it’s China, maybe tomorrow it’s South America. In the end you just need to create great promise and have an interest for everybody. And by everybody I don’t mean everybody, but the target that you have.” Wise, experienced words indeed!
