He came to India with ?two suitcases and the telephone numbers of two friends of friends? in 1998 as an expatriate executive to manage global confectionery giant Perfetti Van Melle (PVM) in India. While Stefano Pelle?s earlier brush with India a few years ago wasn?t exactly an unforgettable experience and he wasn?t looking to visit again, at least not until his retirement, his long India stint changed his perspective on India and his relationship with the country. Such was the impact of his work here and India on him, that he ended up marrying in this country, has a house here and has now written a book that largely draws from his managerial and personal experience in emerging markets, particularly India. Pelle is currently the executive vice-president and COO of Perfetti Van Melle Group and is handling the south Asia, Middle East and Africa business units for the group. The ?CandyD Italian?, as Stefano Pelle likes to call himself, speaks with Sukalp Sharma in a conversation on his latest book, his love for India and, of course, other emerging markets and what he knows best?business. Excerpts:
When Not In Rome, Don?t Do As The Romans Do. What does this title mean to you?
It?s a long story. This book is also a trip into different cultures. I?ve always been passionate about cross-cultural exchanges. In this book also, I mention incidents where the wrong cultural approach could have created problems. In business, like in your life, the way you interact with people from different cultures depends on how well you are able to understand and relate to their respective cultures. Even in a business environment, if you are culturally more sensible and sensitive, then you are more likely to succeed. By the way, I?m from Rome, so that, too, is a connection as far as the title is concerned. That bit is obvious, isn?t it?
Is this book about the diversity of behaviour in emerging markets or is it a lesson in terms of the flexibility that western businesses must adopt in order to succeed in such markets? Particularly in diverse markets like India?
It?s both actually. It?s particularly true for emerging markets because westerners or firangis, when they came here in India, thought they could use and apply the same business models they had in the West. And we at Perfetti realised this ourselves because in the initial days of our India operations, we tried applying the standard internationalised marketing mix to the Indian market as well. Luckily, we learnt our lesson very soon. But many competitors and other western businesses did not and hence they did not really succeed here.
On the personal front, too, understanding the cultural differences and the uniqueness of a culture is extremely important. There are many things that I could say or do in Italy, which would not be very appropriate here and vice-versa. And on the personal front, too, I have learnt my lessons through one or two ?cultural blunders? as I like to call them.
The BRIC nations seem to be your favourite subject as you have talked about them in this book while your last book also primarily focused on them. How different is this book from the previous one?
This is a very different book from my last one. The previous one is out and out a business book, while this is something in between. There are chapters devoted to business of course ?chapters on working in India, working in south Asia, Africa, the Middle East perspective. So there are business chapters, but there are also chapters on my life here?on my marriage in India, or the moment when I landed in India, my friends here.
Then there is a chapter that is something in between and is a comparison between India and Italy as I consider the former my adopted country and the latter as the country of my birth.
Is this book essentially about the difference between your first impressions of India when you first came here and your last impressions of India before you left after working here for so many years?
I won?t say that the book is a product of that, but clearly it is a big part of this book. India changed me completely. And, to some extent, India gave me the opportunity to explore a lot professionally as well as personally, including the fact that I even found a wife here. But India is still about 50% of this book. It?s also about Africa, Russia, Middle East, etc. But India is the base that gave me the opportunity to look at things from a different perspective.
Given the European crisis, for a company like PVM, how significant is the Indian and south Asian market presently?
Just to give you an idea, India is the second-largest market by volume globally for PVM. It?s 16-17% of our global volumes. So clearly, there is a lot of focus on India. Our company as well as our shareholders realise that India is extremely important to us and we have been investing in this market. Shareholders have been visiting India regularly for sometime now. We already have three factories in India and we are looking at a possible fourth one.
India also gives us one of the best year-on-year growth figures. And particularly for me, India is a large chunk of my responsibilities at PVM. Similarly, other south Asian markets like Bangladesh are also important for us. We started from scratch in that market and that is one achievement I am very proud of personally. Africa is the next frontier for us.
Since you?ve worked in India for an extensive duration, how do you view the growth of the FMCG sector in India?
The growth was fantastic till a couple of years ago. The year 2012 was a little flat really for the sector overall. The fact that the reforms are not happening doesn?t really help. Reforms are required and the foreign direct investor needs to be looked at favourably.
Politically, there has been a tug-of-war and back-tracking. FDI in retail will be a definite positive for the FMCG sector in India. I understand that there is a coalition government and there are political constraints, but the government should still be more decisive. If you look at China, they started with their FDI policy in the 1970s and 1980s, and the economy developed on the basis of exports and FDI. India has grown so far primarily due to its domestic demand, which is a great positive. But if you have to go to the next level, FDI has to be looked at positively.
You talk of Africa in your book as the next big frontier. There are opportunities but it is a difficult market, considering stability issues in that continent. What are the bottlenecks in that market for a company like PVM?
The bottlenecks are similar to what one would have found in India, say 20 years ago?lack of infrastructure, bureaucracy, rampant corruption. And there is no comparison, the corruption there is much worse than in India. But the opportunities are huge there for our sector.
While people in India believe in long-term savings, that concept really doesn?t exist in Africa. People there want to make money, only to spend more of it. They like to spend and they want to consume. For an FMCG company, that is a great opportunity. But like you mentioned, stability is a huge question mark, though I must say that the situation has drastically improved in the past one decade.
