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The snob value of a Rolex, Rado or an Omega has never paled over time and even though the legacy lingers, uber luxury Swiss brands evade the Indian market
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Hindi movie playback singer Kumar Sanu once recounted in an interview that his last tributes to singing icon Kishore Kumar had been his wristwatch, which he let slip into the singer’s grave. The year was 1987 and digital watches were already flooding the market, but the timepiece was still a prized possession then, just as it has been in all cultures ever since the first pocket watch was invented somewhere in the 16th century or a little earlier.
The advent of the quartz watch and the omnipresence of the digital timekeeper everywhere — from the car dashboard to the computer screen — did somewhat begin to diminish the utility of the wristwatch by the 1970s and 1980s. The quartz crisis may just have been the mother of invention for haute horlogerie in the 1990s, which literally means “fine watchmaking”. The high-class, astronomically priced, mechanical watches that have been crafted since then are really more of a status symbol than a necessity.
The 1990s was also when India discarded the “Hindu rate of growth” to romp into the league of the emerging economies of Asia. By the end of the decade, luxury brands the world over, be it Louis Vuitton, Christian Dior or the Russian Swarovsky, had begun to test the waters of the Indian fashion retail districts, where a new and empowered segment of the Indian consumer were headed. The coveted Rolex, Omega and Rado made their retail presence felt in India too and no longer had to be purchased during trips abroad.
Swiss timepieces make up half the luxury watch market in the world, but dominate the Indian market and psyche because of a legacy that dates back to the days of the Raj. The ultra high-end luxury watch industry is dominated by the French LVMH, followed by Swiss watch makers like Richemont, Rolex, the Swatch group and Breitling. The British Burberry and the US Citizen Watch Company are also in the list, but like in many parts of the world, in India too, consumers looking for symbols of opulence in a timepiece have chosen Swiss brands. “Omega, Rolex and Rado are the top three luxury watch brands in India,” says Neelesh Hundekari, Partner & Head of Lifestyle Practice, Asia at AT Kearney, pointing out that the Indian luxury market is ruled by brands that are “well communicated”.
The haute horlogerie genre, though, continues to reinvent itself every year, acquiring new heights in craftsmanship in chronometers, chronograph or the other myriad “complications” that render mechanical timepieces into technological wonders. The 2018 range of the Rolex Oyster Perpetual Cosmograph Daytona, for instance, is in 18 carat Everose gold, paired with sapphires and diamonds.
While both Rolex and Omega continue to straddle the top rung of the luxury watch market worldwide, the Rado (a Swatch group brand like the Omega) is just a notch below the “prestige” league of luxury watch brands. The Swatch group brands that do reign over the high-end luxury range include the Breguet, Harry Winston Blaucpalm, Glashutte Original, Jaquet Droz Leon Hatot and of course, the Omega.
The ultra-high-end luxury H3 is a $2,90,000 mechanical beast, manufactured at a limited edition of 25 by HYT. HYT is a watch maker that has revolutionised haute horlogerie not only because its creations tell time with fluids, but also because it offers bespoke services for individuals. A. Lange & Söhne (a Richemont brand) comes in hand-finished versions with an automatic movement that needs to be adjusted just once in 2,100 years. This mechanical wizardry too carries a fantastic price tag of $3,50,000 (over Rs 3 crore). Neither the HYT H3 nor the A. Lange & Söhne have found a customer base strong enough to justify a retail presence within India.
These limited edition, niche brands are coming to roost in oriental destinations like China, Hong Kong or South Korea (see table, ‘Where ultra luxury brands are headed’) but seem beyond the imagination of the Indian clientele. Apparently these brands do not have a wide enough customer base in India to justify a retail presence. “As of now, I cannot share the plans of any brand to enter (the) Indian market,” says Jean-Daniel, President of the Federation of Swiss Watch Manufacturers (FH). Swiss watch industry data shows India at a modest 26th position in the FH list of export destinations, whereas China and Hong Kong lead the pack.
The luxury landscape in India, however, has begun to witness strong evolutionary undercurrents that include changing consumer profiles, government policy and the way luxury players operate. In the days of yore the Indian royalty set standards in luxurious living, a trend that changed post-Independence. In 2014, India’s urban youth comprised the indulgent spenders. The IOSR Journal of Business Management suggests that 44 per cent of India’s luxury goods and accessories shoppers now live beyond the mega cities, in the smaller industrial cities.
The twist in the tale here is India’s growing league of billionaires. A Swiss credit report has identified 2,100 ultra high networth individuals in India (worth more than $50 million) — which is the 11th highest among nations. The Credit Suisse Global Wealth Databook for 2016 and 2017 indicate a remarkable growth in wealth in India from $3,099 billion in 2016 to $4,987 billion in 2017. Yet India lags behind countries like Mexico and Thailand in importing ultra-luxury wristwatches.
Indians have over the last three years purchased $30 million worth of high-end Swiss timepieces. Hundekari suggests jovially that perhaps, all the wealthy billionaires in the country were shopping at the fashion districts of Paris or London, instead of on home ground.
Indian retailers and watch boutiques are able to deal in relatively low margins, which makes India a good buying destination for entry-level luxury watches. “I believe that the Indian luxury watch market has fallen in the last few years,” says Hundekari, adding that the market is worth between Rs 1,500 crore and Rs 2,000 crore. “What makes India still lucrative is the growth of 10-12 per cent per annum,” he says, “which is far better than that of the US, China or Japan.” The luxury watch market in India he concludes, is growing better than others, even if sales are only growing in the range of Rs 200 crore to Rs 250 crore annually.