By Claire Ferris-Lay
Vertu’s CEO has his sights set firmly on the Middle East.
Luxury is common currency in the Middle East and hardly a day goes by without it featuring prominently in press releases and the wider media. But what is luxury and how is it best encapsulated in the modern world?
Dutchman Perry Oosting is someone who is well positioned to answer that question. With around twenty years experience working for established brands such as Bulgari, Prada and Gucci, he is the current president and chief executive officer of Vertu, the British-based manufacturer of high end, handcrafted luxury mobile phones.
“We feel the word time is a key contributor to the definition of luxury,” says Oosting as he takes a minute to relax in the surroundings of one of Dubai’s most exclusive hotels. “If we are able to give the customer more time then we have achieved quite a lot,” he adds.
Time was indeed the inspiration for Vertu as its mobile phones are designed and targeted at high net worth individuals who are attracted to wearing Rolex or Patek Philippe watches or need to save vital seconds by driving the latest Ferrari sports car.
Launched eight years ago, Vertu means ‘a love of, or taste for, fine object d’art’ and is a fully independent subsidiary of the Finnish mobile phone giant, Nokia.
Sketches for Vertu’s phones began in February 1998 and head designer Frank Nuovo (the Italian American who was previously chief of design at Nokia for sixteen years, where he designed some of the iconic phone covers that helped propel the manufacturer to become one of the most successful mobile phone brands in the world) was given a ‘no boundaries’ design brief.
The result was a collection of phones built with high quality materials such as black leather, titanium, stainless steel and gold, screens made from sapphires and keypads with ruby bearings, all handmade and individually signed by a craftsman in England. Each phone also comes with a year’s concierge service that can book customers travel, dining and accommodation plans at the touch of a button.
But this kind of luxury doesn’t come cheap; Vertu phones start from $5,332, with the average unit costing around $7,300 and the most expensive rumoured to have come with a price tag in the region of $310,000.
Timing may be everything when it comes to defining luxury, but it is also a vital ingredient in doing business. While Vertu is headquartered in England and its phones are sold in over 600 retail global outlets, Oosting believes now is the perfect time to launch the range’s first ever new smart phone in the Middle East.
“The [Middle East] is an important region, in terms of size and in terms of its potential. You have a very healthy demographic mix of customers. Compared to most of the other luxury markets, where you see a more maturing customer, here you have the opposite. [This] is, of course, huge potential for us and other luxury brands,” he says.
While he believes it has potential, Oosting is hesitant to reveal how big the Gulf market currently is for the brand. However, he does admit that it “is in the low double digits in terms of the total size of our business,” which has seen it sell around 300,000 units since the company was set up eight years ago.
The figure is unlikely to remain low for long. The oil rich Middle East is one of the few parts of the world luxury companies such as Vertu can still count on despite the global downturn. The region’s luxury retail market is forecast to grow by 8 percent in 2010, outperforming the global luxury retail market, which is estimated to achieve only 6 percent growth this year, according to November 2009 report by Bain and Company.
A consumer confidence report compiled by HSBC also found that confidence has risen to 69 percent during the first half of 2010, almost matching the levels achieved in the pre-crisis period.
Oosting echoes these sentiments. While he describes 2008 as a “challenging time”, he says the impact of the global downturn on the luxury market was short lived. “We still did relatively well but the rebound came quicker than we thought and in the second half we were back in growth. December 2009 was our best month ever in company history,” he explains.
“You manage costs, you manage investment and, in a time when things are more difficult, what we didn’t do was reduce cost in product development.”
One of the products that the company had in development is its first smart phone option, Constellation Quest, which was unveiled in the Middle East at an exclusive launch in Dubai last month. While the smart phone comes with all the high luxury exteriors previous ranges were synonymous with, Oosting says they did not want to launch a smart phone just for the sake of it.
“I think what makes us unique is our brand philosophy. We are trying to be different. Technology should make your life easier. It should not make it more difficult... That is our interpretation of luxury technology,” he says, before launching into a pitch of the unique selling points of Vertu’s smart phone, the Constellation Quest.
“It is not only making a nice case around the device or gold plating. It is as much about the material side as the technology.”
As I show him my bottom of the range old Nokia, he asks: “What is the power and the battery life?” Picking up his stylish alternative he tells me how his Vertu has twenty days worth of standby power, allowing him to watch two movies back-to-back without having to recharge the battery. Pointing to the screen he claims it has 325 pixels per inch, while the human eye can only see 300 pixels.
“Our interpretation is to make sure it is best in class. It is about materials and durability, as that is the definition of luxury,” he says, adding further to our growing list of what he defines as the ultimate in genuine luxury.
Vertu is certainly taking the Middle East market seriously. In January, it plans to launch an Arabic version of its mobile concierge service. “We will have, as of January 2011, our concierge service in the local language,” says Oosting. The service, which is already available in English, will mean phones in the region will be equipped with a dedicated Arabic speaking version of the Vertu Concierge service.
In a bid to free up that most coveted luxury, time, Oosting says the concierge service includes City Brief function, which gives a dedicated an independent guide to over 140 cities. “Firstly, we have professional writers and second of all, it is all independent information. We do not take any money to be part of it. It is one of the elements of our service.”
The service also works like a standard concierge and users can phone or email the service hotline and arrange for a car to pick them up when they land in London or to book a restaurant in Tokyo.
Vertu takes a similar approach when it uses high profile brand ambassadors or spokespeople and some of its current roster includes French chef Alain Ducasse, president of the FIA Jean Todt and British singer Seal. “We use spokespeople, but not in terms of celebrity for the sake of celebrity. We want people that are authentic. It is not just a famous face, it is someone who is successful through their own means and initiative due to their unique performance, as that is how we identify ourselves too,” says Oosting.
The launch of the Constellation Quest is integral to Vertu’s future success and while it is unlikely to see the early phenomenal growth rates of around 50 percent that it saw initially, Oosting is confident as there are still markets it has not tapped into. “We are not in Korea or Latin America, which are big opportunities.” He believes “once you go into a market you need to be serious in terms of investment” and you need to have “a clear strategy for long-term growth.”
And timing, of course, is everything, he says as he makes his escape to waiting car and onto the airport.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.