The flagship of the British colonial empire comes back as a luxury brand.
By Jason Overdorf - GlobalPost
(February 16, 2011)
NEW DELHI, India — Once upon a time, the East India Company toppled governments, enslaved peoples and staffed a private army and navy to rule the world of commerce — then dominated by tea, coffee and exotic spices.
Now Sanjiv Mehta, a 48-year-old British Indian businessman, believes it's time for the ultimate symbol of colonial oppression to make a comeback — you guessed it, as a luxury brand.
"Wealth is moving from the West to the East, and all the luxury brands are typically brands which originated in the West," Mehta told GlobalPost. "[In that context] the East India Company is an interesting brand because Asia looks at it as the old West and the West looks at it as the exotic East."
An Indian buying the East India Company is a gimmick that makes good copy, of course. But the East India Company is actually the real deal.
Having been nationalized after the 1857 rebellion in India that Britain dubbed "the mutiny" despite its revolutionary character, the "brand" was lying virtually forgotten in the hands of the British crown and a handful of apathetic shareholders when Mehta ran across it in 2004. He snapped it up — along with the original coat of arms and merchant's mark — and set about sourcing some $15 million in investment capital to put it back on the map.
According to company lore, Mehta then spent six years meeting museum curators and examining company artifacts to make sure he got the image right before he finally launched the flagship store in London last year.
"It was a long journey," Mehta said.
The London launch received predictable fanfare. This year, though, will be time to put up or shut up, as the East India Company goes back to its colonial roots in Hong Kong, Singapore and India, where the $7 billion Mahindra Group announced it was taking a minority stake in the brand in January.
"India, Singapore and Hong Kong were huge locations for the East India Company," Mehta said, recalling the company's role in forming each of these nations. "We definitely have a very aggressive plan to enter all these markets," he added. "We will be entering with our fine foods business in India in 2011, starting from Bombay."
Mahindra, which knows the market, is optimistic. "The East India Company (EIC) is a truly global brand and can transverse across multiple product categories," Parag Shah, managing partner in Mahindra's investment arm, said in a press statement. "This 400-year-old brand is the first modern transnational brand and in a sense, the founder of the phrase 'international trade.'"
But will colonial chic sell in the colony that lent the company its name?
"The relationship of India with its colonial past has always been surprisingly without rancor, and the fact that some Indian businessman is reviving the brand is not without irony and all that," said Santosh Desai, chief executive of Future Brands. "But it's a symbolic kind of move. It's hardly likely to be a significant brand in a real sense."
The new East India Company sells posh chocolates, tea and coffee and the kind of condiments that old India hands used to whinge were always running out (mustards, marmalade — but not Marmite), as well as gold bullion. But in all of those product categories, it's likely to find that the same economic and cultural developments that have refurbished the old colonial brand as politically correct will also make its former home market a tough nut to crack, says Desai.
To be sure, India has shed its postcolonial baggage. There are still gin and tonics and whisky sodas at "the club" for the old Indian elite, and condo complexes with pretentious-sounding names like the Wyndham Estate. But these days, the cricket team expects to thrash the Brits soundly whenever they meet, and the players are as apt to call their white opponents "sir" as they are to sprout wings and fly.
Young people no longer strive for "propah" British accents — or even American ones — preferring the free-flowing mashup of Hinglish to any other lingo. And the most popular foreign grub — American fast food — must be thoroughly Indianized before it will sell.
"In general, 15 years ago there was a presumption of superiority for an international brand in all sorts of categories," said Desai. But that's no longer the case — even when it comes to products like cars, refrigerators and stereos. "For a whole set of general brands, in everyday categories, Western brands have become commonplace, and the distinction between Indian and Western brands has become less significant."
For luxury brands like the East India Company aspires to be, that's not strictly the case, though one increasingly finds the collections of top Indian designers alongside clothing labeled with Armani or Zegna — and Jaguar, of course, is already owned by Tata. The Haagen Daaz outlet in New Delhi's most popular mall, for instance, is almost always packed even though — or perhaps because — its ice cream costs nearly $10 a scoop.
But brand-conscious consumers are conservative in India — where class distinctions are rigid, and the gossip is vicious. So however long its history, East India Company may find it tough to compete with established brands.