And You Thought Capitalism Was Dead...East India Co is Back, Know Your History...These Guys Are Capitalism!

Fresh brew AMRIT DHILLON, NEW DELHI.
June 5, 2010
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HOW do you promote a name that is famous around the world but redolent of rank avarice, subjugation, tyranny, duplicity, plunder, corruption, and colonial oppression to today's gentle consumers?

The name in question is the 400-year old East India Company and the task of Sanjiv Mehta, 48, owner of one of the most famous brands in history, is gigantic, but he is loving every minute of it.

The company's rebirth as a contemporary luxury brand is happening next month when Mehta launches the first flagship store under the East India Company name on Conduit Street in Mayfair, London.

Advertisement: Story continues belowWith a nod to the company's trading past, it will sell teas, coffee and spices, as well as condiments, chocolates, wines, jams and marmalades and hampers.

"Each store will have a contemporary feel, but also demonstrate a connection to the past," says Mehta, the CEO. More outlets will be launched in the Middle East, Japan, Russia, the US, and India.

In 2005, Mehta, an entrepreneur who has lived in London for more than 20 years, made Indians proud by becoming the first Indian owner of the British company that ruled Indians.

The wheel of history turning full circle was a sweet moment for Indians. Not only was it the only company in the world to have ruled a country, it was the world's first multinational and the only company that generated half of world trade, employing a third of the British workforce.

It also enjoyed a lavish tribute from The Times granted to few other corporations in history. In 1874, when the company was dissolved, the newspaper wrote: "It accomplished a work such as in the whole history of the human race no other company ever attempted and as such is likely to attempt in the years to come."

As an Indian commentator remarked when Mehta acquired the company: "The symbolism of an Indian buying the East India Company is unimaginable." Mehta became an instant Indian hero for buying out the 30-40 British owners who still owned it to emerge as the sole owner of a piece of history.

"As an Indian, when you think with your heart as I do, I had this huge feeling of redemption, this indescribable feeling of owning a company that once owned us," says Mehta, who began his career as a diamond trader.

Despite being passionate about his business, after acquiring the company, Mehta took a sabbatical to understand the rich past of the company that he now owned, although he prefers to call himself the custodian.

He travelled around the world visiting its former trading posts, explored museums, and waded through the mammoth company archives at the British Library in London.

When customers walk into the East India Company store with its Georgian facade in Mayfair, he wants them to experience the history behind the name. This is why he feels unthreatened by the famous food halls of Harrods, Selfridges and Fortnum & Mason.

"There is a difference between luxury and authenticity," he says emphatically. "They offer a collection of brand names by sourcing from different places and putting their labels on products. But we are the company that put tea, for example, on people's tables in the West so we can do tea seriously in a way they cannot."

The sales assistants have all undergone a crash course in company history so they can sell "an experience" to the customer rather than merely a product.

The amount of mugging up required is vast, particularly for younger Britons who may only vaguely recall dim snippets from history textbooks about Robert Clive, the British soldier who established the military and political supremacy of the company in India.

In a demonstration of how seriously Mehta takes his job as custodian of a historical legacy, he has appointed British author and East India Company expert Antony Wild as official "historiographer", reviving a traditional post that noted historians used to hold in the company.

Wild is among those who are teaching staff about the drama, anecdotes and characters associated with the company. "Retail is all about storytelling, about engaging the customer," Mehta says. "Our staff will relate to customers the stories and traditions behind the products."

Elizabeth I was queen when the company was established in 1600. With its own Elizabethan coat of arms — which Mehta now owns — the company was made responsible for bringing tea, coffee and luxury goods to the West and trading in spices across the globe. By 1757 the company had become a powerful arm of British imperial might, with its own army, navy, and currency, and control over key trading posts in Calcutta, Madras, Mumbai, and Bengal.

In 1801, it had a turnover of £7.5 million, £390 million ($A675.6 million) at today's prices. The company's transition from trading to ruling was gradual but inexorable. One by one, various Indian rulers were defeated and it went on to rule India directly for a century until the British government decided to nationalise it in 1874.

Even as a boy growing up in India, Mehta used to wonder how, in an age when a letter could take six months to reach its destination and with no telephones or faxes, the company managed to be the finest in the world with a spirit of enterprise and adventure that he profoundly desired to emulate.

He concludes that management must have had an amazing level of competence.

"One thing you learn about management from the company is the power of delegation," he says. "Today, no one wants to delegate to someone sitting two feet away. They would delegate to people they wouldn't see for six months sitting at the other end of the world. The level of trust they placed in their officials and how they incentivised them was astonishing."

Mehta has spent £10 million to achieve his dream of turning a brand still recognised by millions worldwide into a new luxury brand from the East, capable of standing alongside Western brands such as Cartier or Hermes.

There will be further product launches, all built on the brand's heritage, including drinks, furniture, and jewellery. Mehta plans to invest a further $US100 million ($A118.2 million) over the next five years. He hopes to make profits by the end of the first quarter of 2012 and expects to register a turnover of £65 million by the end of 2015.

The design of the Mayfair store boasts Indian motifs, such as the giant padlock on the gates reminiscent of the locks that used to be used in India to keep products safe, original company coins, and chandeliers made of hand-blown "madder" red glass from India.

In its corporate branding, the original company had quickly developed icons to identify itself, creating the world's first global corporate brand logo. A heart-shaped figure surmounted by a figure four and containing the initials EIC was stamped on all its goods at ports or on trading floors.

Despite its economic boom over the past decade and the success of its software and IT industries in becoming global players, India has failed to develop its own luxury brand, with the exception of the hospitality sector.

Arvind Singhal, chairman of retail consultancy KSA Technopak, is not surprised.

"Do rich countries like Australia, Canada or Japan have a luxury brand?" he says. "It's only a few countries – Britain, France and Italy and lately the US with designers like Ralph Lauren — who have developed global luxury brands."

The appetite of India's rich for such brands, though, is huge, which augurs well for Mehta. It is estimated that India has about 10 million families with incomes above $US250,000 a year.

Mehta is still developing the product range for India. But when he launches his retail store in Mumbai next year, some would say one challenge will be marketing the brand in India whose resources, riches, army, trade and politics the company controlled for 200 years.

Yet it is possible that there will be no adverse reaction from Indians to the second arrival of the East India Company, this time in malls instead of ports.

"The only emotion will be curiosity," said columnist Parsa Venkateshwar Rao. "People remember the freedom struggle against the British government, but don't link it directly with the company."

Mehta expects a warm welcome. Every day, his inbox is flooded with emails from Indians thrilled at this final settling of scores.

"Everyone is proud and happy and wants to participate in this journey," he says. "The other day, an old man choked with emotion when he called me from India. He had no words to describe his pride. It made me realise the responsibility on my shoulders."