Anish Goel, Managing Director of Victorinox India. Chances are that you own one or aspire to own one. Having got its name from the Yankees in Europe after World War II, the Swiss Army Knife is probably the only knife in the world, which while carrying, buying or gifting doesn’t raise eyebrows. To know more about the business of this nifty collectible, The Dollar Business caught up with Anish Goel, Managing Director of Victorinox India, who spoke his mind on a host of issues ranging from his flagship product, to Indian manufacturing and the new government.

Purba Das | @TheDollarBiz

TDB: As a brand, you don’t advertise much. Is there any specific reason?

AG: Swiss as a brand is iconic and Swiss knives itself have a cult status. We see many advertisements of brands that show how multifaceted their knives are. We have to understand that knives are an impulsive product. A consumer does not plan buying a knife. He sees it and just picks it up. As far as advertising is concerned, we do it directly only at the point of sale when the consumer is making the purchase. However, we do advertise for our luggage and watch categories.

TDB: Do you plan to manufacture your products, especially knives, in India if quality checks are in place? Or is it that your focus is on the Swiss factor and not on the quality of knives?

AG: Our knives have a Swiss brand attached to them, so manufacturing them in India is out of the question. It may lose the value that it derives from its Swiss heritage. Swiss knives have been around for over 130 years and it’s a brand in itself. How can we have Swiss Army knife made in India or China?

TDB: In that case, why not establish yourself as an Indian Army knife manufacturer as well…?

AG: To manufacture knives, we need massive quantities of raw material to meet that quality standard and achieve production in that scale. If we maintain very high quality but the quantity is less, the cost of production shoots up. So, it has to be balanced carefully. Moreover, Swiss Army knife is a very important part of the Victorinox brand and that has to be maintained.

TDB: Since you import the entire Swiss knife portfolio, tell us about the challenges that you face during the importing process.

AG: I don’t think there are too many challenges. India has liberalised import rules quite a lot. As far as duty structure for knives is concerned, the country has a reasonable duty structure. Of course, when it comes to watches, if the duties could be a little lower, it would be much better for retailers. But I don’t see customs duty and other taxes as a hindering factor.  Interestingly, in India, we work with lower margins as compared to bigger markets across the globe.

TDB: What are your thoughts on India as a manufacturing destination? Do you see yourself benefiting from the growth of the manufacturing sector?

AG: I think the potential is very high and it is just a matter of time before India emerges as a fantastic manufacturing hub. If the government has a visionary thinking and has good policies in place for the growth of the manufacturing sector, India can soon become the manufacturing hub of the world. I personally feel that competition is good for a sector. It provides more choices to the consumer and ultimately leads to the survival of the fittest. If individual companies have the right policies and quality checks in place, growth of the manufacturing sector will  definitely benefit everyone.

TDB: Last year, the Chinese government announced a 60% cut in import duty levied on Swiss watches. Do you see this as a demotivating factor for Indian retailers?

AG: Personally, I feel it will not have any substantial effect on retailers in India. If a brand wants to establish itself in the Indian market, it will do so. But yes, there might be a buffering period for the brand in the country. The company might also rearrange the proportion of investment in the country. A company might cut down on its investment budget for India but I don’t think it will be too significant. India is a long-term, emerging market, with young consumers, and I think a brand like Victorinox will enter a market like India only with a long-term plan.

TDB: Did the rupee depreciation further reduce retailers’ margins?

AG: It was sad the way the rupee depreciated. We had to increase prices of our products. After all, there are no free treats. What we did was, we maintained  prices for the stock that we were holding, but had to hike prices of fresh imports.

TDB: What are your expectations from the new government in terms of policy on foreign trade?

AG: The new government is speaking the right language and I believe that they will get the economy back on track. In terms of foreign trade policy, if the government gives us any tax break or duty drawback, we will welcome it. If it does not, even then we will survive. At the end of the day, it depends on the consumer. If the consumer wants to buy a quality product, she will. We price our products in such a way that they don’t become touch-me-nots.