WINNING CUSTOMERS FOR A LIFETIME

Dr. Mukta Ramchandani

Founder & CEO of the bag brand Moraltive

How can you start a new fashion brand and make it recognizable? Dr. Mukta Ramchandani, founder of the Swiss brand MORALTIVE, tells her business story and gives valuable tips on consumer behaviour.

From IT management to luxury fashion and PhD in marketing, from an Indian family business to an extraordinary career in Europe, Mukta’s professional path is truly fascinating. She studied in Delhi and France, worked in Milan and Dubai, was a guest researcher in the USA and gave her first lecture at the age of 22. Today she is a lecturer at a business school in Zurich, owner of the Trading & Consulting company and founder & CEO of the bag brand Moraltive.

In this interview Mukta explains what slow fashion and sustainability are, how not to get lost in the brand cloud and how unfortunate situations can teach you great lessons for the future.

Your career path is very impressive. Where did you start, how did it all begin?

As a teenager I wanted to become a pilot, so I majored in physics, chemistry and mathematics in school. Unfortunately, this dream was not to come true because the Indian Air Force requires pilots to be a certain height and I wasn’t tall enough. With my school grades I decided to study IT Management in Delhi, which was 500 km from my hometown.

Isn’t it pretty unusual for an Indian girl to move all alone to another city?

Yes, it is extremely uncommon, but I’ve always been ambitious. I am an only child and my parents always wanted me to become independent. Education is the best way to do this. That’s why I studied in Delhi and got a double bachelor’s degree in IT Management and Computer Aided Management. After graduating, I decided to do my Master’s in Luxury and Fashion Management in Nice.

That’s a completely different direction: Why did you shift your interest from IT to fashion?

I wanted to do a specialization that doesn’t exist in India. In addition, my parents were willing to send me for this course because it is a niche specialization that offers more opportunities than if I were just doing a Master’s in International Business. I also wanted to gain practical knowledge, to understand how the market works. My father is an entrepreneur and the whole family is involved in small businesses, so I grew up hearing about FMCG products and business strategies.

There is a saying: Jack of all trades, master of none. I have always said to myself that I have to be an all-rounder, but also be the master of something.

How hard was it to enroll in a luxury fashion program after a bachelor’s degree in IT management?

Enrolment wasn’t a problem – I had good grades in my bachelor’s so I was  accepted for the course. The specialisation, on the other hand, was completely new for me. My friends in class would laugh at me saying: “Unbelievable, you don’t even know THIS brand?” I would answer: “Yes, I didn’t, but now I know. And one day I am going to know them all”. So everything was new and I was very focused on my studies; I wanted to learn as much as possible.

Was it then that you decided that your future should be connected with fashion, not IT?

In fact, I still use the IT-skills I acquired through my first studies. For example, I made my brand’s website by myself. However, there is a saying: Jack of all trades, master of none. I have always said to myself that I have to be an all-rounder, but also be the master of something. If I continued my way in IT back then, I would have been stuck in it for my whole life. So I had to make a change to broaden my horizons, while at the same time concentrating on something specific. If you make a transition at the right time, you will see how life unfolds.

How did this transition work out for you after graduation?

After the Master’s I did an internship in Milan for 6 months. There I worked for a cosmetics distribution company and gained experience in B2B sales, branding and communication. At the same time, I continued along my academic path. My professors were impressed with my master’s thesis, which was about the asymmetry of multicultural luxury communication, and suggested that I publish it as a journal paper. Then they asked me to write a chapter for the book and also to give a lecture at their business school.

It was 2011, the year I graduated. I was only 22 and had been offered the chance to give my very first lecture! I was very happy and afterwards I realized that I would like to teach. That was when I started thinking about doing a PhD. But it didn’t happen immediately. First of all I went to Dubai and worked for my cousin’s tourism company for a few months. Then I returned to India and applied for several European doctoral programs. Fortunately, I got the scholarship in France, exactly where I wanted, and in November 2012 I started my PhD there.

What was your specialization during the PhD?

My specialization is in embodied cognition and consumer behavior. It is similar to the field of sensory marketing: How your body movement and your senses affect you as a consumer. For example, how your posture can influence your buying behavior, how the retail showroom can increase your loyalty, or even whether you buy more when you stand or sit.

During my studies I did research on the communication of fashion brands and found out that there was a big gap between their marketing messages and their practices.

That’s very interesting. So how is customer behavior affected by his sitting or standing?

When you’re standing you need more effort to maintain that posture. When you’re sitting you’re more relaxed. There are, of course, differences according to your intentions as a customer. For example, sitting can increase store loyalty and standing can make you more focus on your decision making.

There’s also some interesting research that’s been done in the past on negotiation. If you offer a person a hard seat, he will feel less comfortable and will want to finish a meeting earlier. In this way, you can avoid endless negotiations.

These are some really helpful tips, thank you! Is that what you teach in Zurich? And by the way, how did it happen that you moved here?

A couple of years ago I got married and moved to Switzerland with my husband. I was still enrolled on the PhD course, but the scholarship had already been completed, so I could continue doing my research distantly. Here I was looking for a part-time job and was very happy to get the offer from UIBS in Zurich where I continued my teaching. I currently teach marketing and digital communication subjects to bachelor students and product launch for MBA students.

The teaching process is a very interesting experience. You interact with each class and exchange ideas. Not only do the students learn from you, but you also learn a lot from them: What is the way of thinking of the new generation? What are their expectations?

However, the teaching was not enough for you: In 2017 you founded a consulting company and at the same time the brand MORALTIVE. How did it happen?

Consulting started organically. From time to time during my life in Europe, I did independent consulting work. Mostly it was for contacts of friends or family members who needed help with their business in Europe. For example, they wanted to find trade fairs at which to present their companies, or they had to create a website for a local market. In 2017 I registered it as a business and also formed MORALTIVE, which officially belongs to the same company.

Photo: @moraltive

Tell a little more about MORALTIVE: What was the idea behind this brand and what inspired you to create it?

During my studies I did research on the communication of fashion brands and found out that there was a big gap between their marketing messages and their practices. Many companies greenwash customers in the name of sustainability without actually practising it. I also noticed that there were basically only two options for sustainable fashion: either luxury and extremely expensive, or something that looks totally cheap and worn-out. There was nothing in between. I thought it would be great to start a company that would fill that gap and offer a truly sustainable product in the fashion industry.

Why did you decide to produce exactly bags?

My wish was to promote slow fashion and create a timeless product. I wanted it to be holistically sustainable and at the same time of high quality. On the other hand, I didn’t want any restrictions on size and trendy colors, so I knew I couldn’t make clothes or shoes. Finally, I wanted to offer an affordable product without having to compromise on functionality or elegance. Bags and backpacks met these requirements perfectly.

It is sometimes difficult to do business with Indian companies, they often try to exaggerate their skills and you can never be sure if you will get the results they promise.

How long did it take to launch the brand?

All in all, it took about 9 months. I started to prepare in 2016, visited numerous trade fairs and observed existing brands. I tried to understand which materials are commonly used, what eco-friendly production methods exist, which types of leather are the least harmful to the environment. Thus, we use leather that is a by-product of the food consumption sector.

Your production is in India. Is this in your hometown?

My home city Kanpur is famous for leather exports, but unfortunately the production there is not eco-friendly, as well as some dealings in the cow leather sector are illegal. That’s not what I wanted for my brand, so I work with a manufacturer from another city – Kolkatta. It is a small, family-run factory with about 25 employees. I am very satisfied with the quality of their work and I am just lucky to have found them.

How did you find this factory? And why do you say ‘lucky’? Aren’t there plenty of producers to choose from?

I met them at a fair in Milan and they had one of the smallest stands there. We were very impressed by the interaction we had with them. In fact, it is sometimes difficult to do business with Indian companies, they often try to exaggerate their skills and you can never be sure if you will get the results they promise. The factory I work with is different.

Photo: @moraltive

Did you have any bad production experiences before the launch of MORALTIVE?

Unfortunately, yes. The very first collection wasn’t even on my website because it was a total disaster from other manufacturers. We found them during a visit to India and checking different factories. I’m pretty sad to say that, but some suppliers can trick you. One has to be very careful in selecting the suppliers. They give a certain quality when they produce a sample, but when the whole order arrives afterwards, you see a completely different result. That was exactly what happened to us, and it was quite a loss for us – we ordered 300 bags of different sizes and types, and when they were delivered to Switzerland, I saw the absolutely terrible quality that I didn’t want people to associate with my brand.

What happened to this poor-quality collection?

Of course it never got to the customers. We still have it in our storage unit and are trying to figure out how we can probably reuse these materials so that they are not just waste. After such an experience, we are particularly happy to have our current production. Their handiwork is exceptional, and this level of quality is our standard now.

You always have a decision to make: going to a retailer and give them 60-70% margin versus of going directly to the customers and probably offering them 30-40% Christmas discount.

Did you launch the brand right away after receiving the quality you wanted?

To tell you the truth, even when the new collection was ready, I delayed the launch. I think I was waiting for the perfect moment and thought that some things like the digital presentation could be done better. Finally, my mother pushed me and said, “You have to start somewhere and then develop. If you keep waiting for perfect pictures or other things, it will just take too long.” My husband shared this approach and motivated me to start. So I created the website and all the pictures with my husband’s help to finally launch the brand website in 2018.

Who were your first customers and how did you promote the brand after the launch?

Our first customers were of course our friends and family. But from the beginning I also contacted several shops in Switzerland and asked if they would like to include my products in their assortment. Currently MORALTIVE is represented in two stores and I am in a negotiation with another possible partner. In general, it is a big challenge for a small unknown brand to be bought in by the stores here. It can also be very expensive. You always have a decision to make: going to a retailer and give them 60-70% margin versus of going directly to the customers and probably offering them 30-40% Christmas discount.

Photo: @moraltive

Therefore, you also sell your products directly. What channels do you use?

First of all, any product can be purchased through my website, so I actively use digital marketing to promote my brand. And we also go to B2C fairs. We won a stand in St. Gallen and got the space for free, which I was very happy about. We also represented the brand in Hamburg, but unfortunately that was quite a loss for us. This fair was far less visited than the organizers had expected and the number of products we brought with us appeared to be too high. It cost us a lot because we had to pay VAT and taxes on delivery in Germany and then additional VAT to return the rest of the products to Switzerland. It cost us a lot, but you learn from such experiences.

What exactly did you learn from this experience?

A little later after the fair, a customer from Hamburg contacted us and wanted to order a laptop bag for her son. We had never delivered abroad before, and with this order we became acquainted with the delivery prices. For individual shipments they are extremely high: the delivery to Hamburg cost even more than the product itself. Now this question has become one of our priorities; we are looking for solutions to enable shipping throughout Europe, which can become possible by opening distribution centers.

You always have to think of your customers first. It is even more important than your financial model, because if your customer is happy, you have someone for your lifetime.

Yet it sounds great that your products are in demand abroad. What statement from MORALTIVE attracts customers?

The name MORALTIVE is a fusion of two words: morally positive. And that is the statement supported in our products. It is not only about the materials used, but also about how the bags are manufactured, transported and stored. For example, we do not offer free return transportation (unless if the product has an issue), while such a system is not sustainable and it leads to a lot of waste of resources and a higher carbon footprint. On the other hand, we promote slow fashion. Therefore, the quality of the products is very high, the design elegant and timeless.

You say ‘we’. Who are the people who support you?

My husband is actively involved in the development of the brand – from the design creation to being with me on trade fairs. Then of course my mother, who helps me a lot by carrying out spontaneous quality inspections and managing production in India. My father, who supports the whole project. And very importantly, the factory team; they support us with the exceptional quality of their work.

It seems that this support is extremely valuable for you, as you have managed to rapidly develop a new fashion brand within just 2 years. What else is important for a small business, what advice can you give to budding entrepreneurs?

You always have to think of your customers first. It is even more important than your financial model, because if your customer is happy, you have someone for your lifetime. Second, be careful not to get lost in the brand cloud. Today people are very overwhelmed by information and they can quickly define you as one of the brands that do ‘so and so’. In such a scenario, your only advantage could be the price, otherwise you will be lost to larger companies. To come out of that you have to look for different touch points so that the customers can remember you.

It’s no secret that it is also very important for entrepreneurs in Switzerland to have connections. But if you don’t have connections, never hesitate to try to make a new one. Be honest, be transparent and the right people will connect. And finally, never sell yourself short. As an entrepreneur you invest a lot of energy and effort into the development of your project, so be proud of your work.

Are there people or personalities you see as role models? Who inspires you?

I don’t have a particular role model, because I think that every person has their own start, which influences the paths they can take. But I admire people who do whatever they can to achieve their goals. I like Stella McCartney and the revolution she caused in sustainable fashion; I’m impressed by Richard Branson whose health problems didn’t prevent him from building an amazing business empire; and I’m inspired by my friends and family who, despite struggling, consistently pursue their dreams.

It’s not about who you are, but about where you’re at. My favorite author Robert Frost wrote, “Two roads diverged in a wood, and I took the one less traveled by. And that has made all the difference” Those are the words I live by.

Thank you very much for this interesting conversation and useful tips! We wish you all the success with your projects!

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