Former Managing Director at RIMOWA and Goyard
Clement has over 20 years of experience in the luxury goods industry in Asia. He joined Cartier as a Retail Manager in 1997 where he managed 12 boutiques and over 80 points of sales across APAC. Clement then joined Goyard, the luxury french brand, where he built the brand’s distribution network in Asia for 5 years. He then joined RIMOWA, the luxury luggage maker owned by LVMH, where he opened new locations and built out distribution with malls and boutiques across the region.Read moreView Profile Page
Just taking a step back, when you’re moving into a new market, is there an immediate question as to whether you want to own your distribution or have indirect distribution and how do you make that decision?
Generally speaking, it’s better to go through a third-party distributor, in the early stages. Why? Because there is a level of investment that you need, to enter a market. You need to make your brand known; you need to open an office, you need to hire people; you need to set up logistics, distribution network, after sales service and so on. For most brands, it’s usually beneficial to have someone else to do this expenditure. Obviously, you give them a margin, so they can recoup their investment and make money. They usually have other brands that they distribute, so they can use people from other brands, doing some multitasking and, therefore, lower the costs.
It’s also a learning curve for the brand, through the distributor, for the feedback that you get from their teams, from the frontline staff. Every brand has a learning curve, in any new market. It’s not that you go into a new market, you open a store, with staff from your HQ or from your London team. If you do, usually it’s a failure. There have been many, many failures. So the initial phase is with a distributor, which creates its own set of issues, when you want to get out of that relationship, which I have done, many times in my career. However, it helps the brand to get a foothold in the market. I would say, for the initial period of development of the brand, which can be anywhere between two to 10 years, depending on your brand strength and your key products and capabilities to invest in market, is probably the ideal way to start, in the market.
The distributor is there to make money. The distributor is not there to build your brand, but helping you to build your brand in the market will him to make money. A luxury brand sells products that people don’t need. They want the product, but they don’t need it. What we’re all trying to do, is build a brand equity and build a brand strength and desire. So we want the young people, young female, usually, to desire to buy those products and the distributor is going to invest in communication, invest in retail, invest in teams, in order to build that desire in the market.