70 YEARS IN OPERATION

Veneto, Italy 2020 | SPORTS & TOURISM | VIP INTERVIEW

TBY talks to Enrico Moretti Polegato, President & CEO of Diadora, on the last decade of trading, the Chinese market, and combining tradition and innovation.

Diadora celebrated its 70th anniversary in 2018. How has the last decade been for the company?

It has been challenging, but interesting as well. After I took over Diadora in 2009-2010, we were asked to participate in the relaunch of this historic brand. We took the challenge for three main reasons. First, the reason why the brand lost its popularity was not because of the brand itself but because of issues within the company. Second, we realized how much the brand meant for the region and for the history of sports and Italian craftsmanship, and I did not want all this know-how and authenticity to be lost. Third, on a more personal note, I wanted to have my own business experience with my own team without being viewed as the son of the owner. After 10 years of facing numerous challenges, the dream of bringing new life to the brand has been realized, and the results so far have been positive.

In 2015, you embarked on a program to re-shore part of your production. What was the socio-economic impact of this strategy and what is the essence of the “Made in Italy” brand for Diadora?

The essence of “Made in Italy” is what Diadora is as a brand. The brand and consumer environment have been changing rapidly and I firmly believe that a brand is not identified by a logo anymore, but rather by the brand value the stakeholders can identify with. People are not just looking for a product, they are looking for an experience. Diadora's values are authenticity, sports, and Italian craftsmanship. Focusing on the Italian aspect first, Diadora has for long been the preferred choice of sportspeople around the world. When we took the brand over, we identified this Italian style as a key differentiating factor. We have Italian design in all our products and we decided to invest in this brand value by re-shoring part of our production. Our re-shoring project's main success is that it is considered as coherent and quintessential as Diadora.

Diadora exports its products to 68 countries. Part of your turnaround strategy was to focus on some key markets like the UK, US, Germany, and Japan. Where do you see the main opportunities to further increase your presence abroad?

Going international was our choice; we were not forced into it. Since we took over, the Italian market has been growing at the same pace as foreign markets. The big surprise has been the response in the US market, which we entered in 2017. The results have been great because the brand's authentic Italian image and concept have been recognized by the US market. Surprisingly, our most successful product lines have been our super-technical running shoes. This segment is one of the toughest to break into in the US, but we were able to succeed due to Diadora's clear identity and brand differentiation.

Diadora has been present in China since 2018 through Tmall's e-commerce platform. How are you working to improve Diadora's e-commerce offering?

We are constantly working to improve our websites' experience through collaboration with buyers and companies. We launched our Tmall e-shop during an event hosted together with Roberto Baggio, a long-standing friend and supporter of Diadora and a sporting icon. He is also considered an icon in Veneto because he is from Vicenza, but also in other parts of the world, such as Asia. Thus, he was able to promote our brand value in China.

Diadora is the perfect blend of tradition and innovation. How do you plan to apply this spirit of innovation moving forward?

Sometimes we get the meaning of innovation wrong. We tend to identify innovation with products, rather than with processes or simply as a way to be. We have some innovative products, but Diadora is also very innovative in the way we are leading the company. The mean age in the company is 38 years and we run the company as millennials, from our working schedule to how we share our spare time and interact with each other.

What are some of the latest technologies Diadora is implementing?

The most important one is called Blueshield, which is present in running shoes. Our innovation team created it as the first technology to adapt to the foot rather than the other way around. Some people have pronation and others supination depending on whether they run with the internal or external part of the foot. Generally, in the market you find shoes that either correct your posture as a pronator or as a supinator. With our Blueshield technology, the innersole has an internal foam nucleus that adapts to and corrects your posture regardless of whether you are a pronator or supinator because the nucleus adapts to you.

Diadora was awarded the EcoVadis Gold Medal in 2018. Can you elaborate on the company's sustainability efforts?

We have an internal sustainability department and everyone has been working with them on various projects, starting from the energy efficiency of our headquarters. At present, half of our energy is supplied by renewables, specifically solar power. All of our supply-chain is evaluated by EcoVadis and we and other players are setting a good example by acquiring gold certification from them.

How has Diadora's origins influenced the company's international profile and performance?

It is a matter of being in a territory where there is a certain huge know-how about our industry. At Diadora, we promote a sportswear environment that complements our international outlook on athletics.

What is your view on the challenges and opportunities the sportswear sector offers?

Competition is a challenge because we have to compete with other sportswear producers from other countries like the US and China. The other factor is that we have to compete or coexist with a consumer, business, and production environment that is rapidly changing. Under such circumstances, it's important for a company to stay true to its roots and leverage its strengths, especially in foreign markets, while maintaining a flexible mindset. We have to be able to resonate internationally, but we also have to remember that our background is our strength.

What are your expectations for Diadora in the short term?

We will go on investing in our brand values. We will continue to present our 71 years of history, while continuing to invest in new products and innovations with a fresh approach to the market.