What’s the best way to build a market in China, and how does a successful entrepreneur stay hungry? Ketty Koutsolioutsos, co-founder of Folli Follie, and Raphael le Masne de Chermont, executive chairman of Shanghai Tang, have some answers.
Ketty Koutsolioutsos, entrepreneur at Folli Follie
Such moments must come quite frequently for the co-founder of Folli Follie, which also owns Links of London. After all, she and her husband Dimitris have expanded into 24 countries since the company first opened its doors in 1982, and it now has 430 sales outlets.
This moment comes at Folli Follie’s new store in Tsim Sha Tsui’s Harbour City, one of its sixteen in Hong Kong. “Miss Ketty”, as the employees know her, is unhappy with the way the store looks.
To an untrained eye (mine), it looks pretty, and it is already full of customers; but that’s what makes Koutsolioutsos special. Even after three decades of building the business from a small shop into a global brand with 100 outlets in China and 80 more in Japan, she still pays attention to the smallest detail.
“I wasn’t happy with the window display,” she says after solving her problem and sitting down for tea. “I would not have been able to sleep if it had not been changed.”
This unerring focus is a trait found among all great retail entrepreneurs. Bernard Arnault has it; so does Diego della Valle. Both LVMH and Tod’s have thrived because these two men can spot a misplaced shoe in a display at a distance of one thousand paces.
For Koutsolioutsos the focus is even sharper, because she built her empire on jewellery; and small items need a certain joie de vivre to stand out from the crowd.
The first Folli Follie store opened in Athens, and it took thirteen years for the brand to launch in Asia. Its first presence was in Japan, and it entered the Chinese market in 2002.
“Folli Follie means “crazy, craziness” in Italian. My husband and I were living in Milan when he suggested we move back to Athens and open the first store,” recalls Koutsolioutsos. “I told him his idea was “crazy, craziness” and the name stuck for the company.”
Some might say Folli Follie’s rapid expansion into China is also a bit mad. Yet she has no doubt her strategy is the right way to defeat its main rivals and bring Mainland Chinese customers to her many doors.
“Our products have an energy. We look for that. We make sure we are always innovating with new designs, colours and combinations of materials.
We were the first to combine gold in silver.,” says Koutsolioutsos.
The success of the FF Group, which includes Folli Follie and Links of London, has given Koutsolioutsos the resources to pursue two of her other passions: philanthropy and the arts. Folli Follie has concerts by Greek stars Nana Mouskouri and Alkistis Protopsalti in Hong Kong and Shanghai. And Koutsolioutsos has pushed the company to support children’s charities and the Hong Kong Cancer Fund.
What does she do to relax, on the rare occasions when she is at home on the beautiful Greek island where she and her husband have a house?
“I cook,” she says. “I just love to cook.”
Few people are more comfortable in their own skin that Raphael le Masne de Chermont.
Raphael le Masne de Chermont and son at the Genghis Khan polo club
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Whether Coaching his son about the basics of polo on a polo field in Outer Mongolia or escorting celebrities at a high profile event in Beijing, the chief executive of Shanghai Tang seems blissfully stress-free. His insouciance is like the essence of his brand’s DNA, a mix of effortless style and quirky sophistication.
When he took over at Shanghai Tang in 2002 it was still focused on its Pedder Street emporium (“It was a shop not a brand,” says de Chermont) and its client base was 80 per cent Western. Previous attempts at overseas expansion had not gone well. De Chermont set about changing the company’s approach without damaging its Oriental character. His team worked on the company’s product lines to weave in the sophistication of New York and London. The outcome has been a significant change in its customer profile, which is now 50/50 Western/Asian. Not that the two groups go for the same lines.
“Chinese customers do not buy the same products as their Western counterparts,”
he says, speaking from the house in Provence where he often spends his vacations. “Our sales tend to be much more lifestyle-based in Hong Kong and Singapore. In China, we are more about fashion, with apparel being the bestselling items.”
De Chermont has helped to build strong associations between Shanghai Tang and polo. It is his favourite sport, and he plays it with fierce passion. In Outer Mongolia, he has linked the brand with the development of a programme that has reintroduced polo to the nationality many believe invented it.
Polo shirts branded with “Genghis Khan Polo Club” help to fund an annual international tournament in the Orkhon Valley, while a summer school gives the children of nomadic horse traders a chance to learn polo and, maybe, become international players.
A polo pony can be a tough mode of transport, yet nothing is more difficult for some luxury brands to ride than China’s speeding economic dragon. De Chermont has made himself a student of China, and he has adjusted the way he uses the reins at Shanghai Tang to ensure the company stays in line with its trajectory.
“The perception of luxury is still different in China than it is in the west,” he says. “People there are still buying to show their status, whereas in the west we buy luxury goods mostly out of pure hedonism. In the west we buy luxury because we want, in Asia people buy to show they can.”
Despite that, de Chermont is well aware how quickly China can change course. He is determined that, when that happens, Shanghai Tang will not be thrown.
“People in China learn and adapt very fast,” he believes.
“The luxury world was obsessed with Japan for a long time. But they were more like followers, whereas the Chinese market is full of innovators.”
Shanghai Tang presents itself as one of the few if not the only luxury brand that was born and bred in China and now has a strong international profile. De Chermont doesn’t see that category getting more crowded in the near future, largely because of China’s cheap production techniques and the tendency of producers to rush. They fail to spend the time European brands have devoted to building their reputations for quality and brand awareness.
It has not been easy for Shanghai Tang to shoulder its way to prominence among the Hermes and Louis Vuitton crowd. Maybe that’s why de Chermont needs polo – as a means of release that allows him to maintain his famous air of calm.
“Business life is more relaxing than polo life,” he counters. “Your life is always at risk on the polo field, and you always need to be very focused to avoid a mistake that could cause you mortal harm. It’s all about adrenaline.”
So now de Chermont’s secret is out – he has been so successful with Shanghai Tang because he leaves his stress on the polo field. There’s a lesson in that for every entrepreneur.
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