Ten days ago, L Catterton, the result of a merger between the private equity (PE) and real estate funds of LVMH Louis Vuitton Moët Hennessey SE, held its annual summit in New Delhi. L Capital, as the PE unit of LVMH used to be known, has invested in Fabindia, PVR and Genesis Luxury (it has exited from the first two).

Ravi Thakran, managing partner and chairman of L Catterton Asia, known for his insightful understanding of the luxury and consumer goods markets of Asia, who was in the national capital for the summit, spoke to Mint about the urgent need to invest in Indian artisanal luxury. Thakran’s belief that L Catterton could become a change agent in the arts and crafts sector given the right conditions may be a big idea whose time has come. He also argues why the Indian government’s development agenda should include local luxury.

How would you describe your experience of investing in and working with Indian companies? Any thoughts about the work culture here?

I firmly believe that India has a long and credible history of entrepreneurship, which is manifest in many success stories across sectors. This story is only getting stronger, and it is encouraging to see new business ideas coming to fruition from first generation entrepreneurs, and a changing mindset within the old business families too. There have been various issues, such as policy certainty on the one hand, poor infrastructure on another and costly real estate, etc. that have been inhibitors to even higher growth. We are pleased at the progress being made by the current government in addressing some of these. Of course, we would all hope for faster progress on some of these fronts.

Lastly, the one big issue impacting investments has been concerns around governance and transparency. Thankfully, the incidence is reducing, but as investors, one can’t overemphasize the importance of entrepreneur selection.

Has the merger of L Capital and L Catterton changed the company’s essential parameters for choosing luxury, apparel or consumer brands to invest in?

We have and will continue to be focused on the key consumer categories that appeal to the vast and growing middle class across Asia. Of course, with the combination, we benefit from a much longer experience base and wider global reach and insights. As Asia develops, some categories that were hitherto nascent in the Asian context, but relevant in North America, such as pet foods, health and fitness, etc., are now gaining traction.

You have invested in Bateel dates in Dubai. There could be numerous such small potential parallels in the food business in India. Does anything particular from Kerala to Kashmir currently interest you?

Given India’s vast and diverse food history, there clearly are a number of interesting food businesses that can be interesting globally. Some segments like Darjeeling tea are fairly obvious, but the key is to make the transition from a generic provenance to more distinctive branding. A related example that I could quote is the success that Fabindia’s subsidiary Organic India has had with commercialization of tulsi (a kind of basil ).

Organic products and wellness products created from Ayurvedic or herbal ingredients are a part of India’s culture. Yet, no such brand has become a leading global name. What could be the reasons?

I would not agree that India has had no success in this arena, with Himalaya being a very obvious example. Of course, if you look at the more premium segments of the global market, one would agree that no Indian business has been able to make a meaningful dent thus far. This is in part driven by the dynamics within the local market, in terms of price points, etc., which have an impact on how companies think about things like packaging, route to market and marketing, etc.

But the more premium end of the market is now taking shape. Be it brands like Kama Ayurveda or Forest Essentials, these companies have clearly approached the opportunity differently and some of them will be able to evolve into brands that are relevant globally.

Which is the most unusual and unexpected portfolio company L Catterton chose to work with anywhere in the world or in Asia?

I am not sure if I would use the terminology unusual or unexpected, because as long-term, sector-focused investors, we only invest after a rigorous and detailed study of any investment. That being said, when we invested in PVR in India in 2012, it was our first investment in the media space, let alone the multiplex business. While not very obvious, we could clearly see that the company could benefit from our involvement, which as you can see from its success since, has clearly played out. Be it in helping the company grow inorganically, enhancing its digital interface and share of e-ticketing revenues, to increasing the contribution of non-ticket revenues, there have been multiple areas where we were able to contribute to their success.

What do you think about luxury in India?

India perhaps has the most evolved luxury products of the world. Whether they are from the glass industry of Firozabad or the perfumes of Kannauj—we should take pride in the diversity. There is a long list of Indian creations that symbolize cultural elegance as well as are a statement of worth and status without any logos. Wearing Indian luxury is the best way to say I am here to be myself, not to espouse a logo. That is the ultimate definition of luxury and the entire world is now moving towards embracing it. Take for instance, the white cotton dhoti with a gold border. It respects culture, is innovative, understated, has a name, is classic and yet can be so contemporary. While earlier many of these artisanal creations survived under the patronage of royalty, later due to various supply chain issues, the value of our craftsmen went down. We have the capacity to leapfrog but nobody is talking about building global luxury from India. The development agenda of the current government must make this a priority. India must wake up. I genuinely hope that luxury because of its labelling is not seen as elitist and kept aside. Look at how the Chinese build billion-dollar brands. We need to make that happen in India. Enriching craftsmen is a national responsibility.

Did L Capital ever make an effort in the past to step in and create global brands out of Indian crafts and arts?

We have been continuously exploring how to somehow provide the route or become the route to marketing this extraordinary luxury of India. In fact, a couple of years back, we tried to collaborate with a Kolkata designer who I would not like to name but someone who we believed could lead the project and curate products from 14-15 well known and significant weaving states of India and build them as a brand. Somehow it did not work out then.

Will you revive that plan? Are you still looking for a design leader who can curate art and crafts brands for strategic brand building?

Of course! This is my clarion call to anyone out there who deserves and commits to a curating leadership role. Craftsmen struggle to find platforms and at L Catterton we want to become that platform. We want to work with 10 chosen centres of excellence as one corporate body, become change agents, create a market route.

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