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Piaget will never be anything other than exclusive
Economy

Piaget will never be anything other than exclusive

Thursday, 01 December 2011
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Anaïs Georges du Clos
Freelance journalist

“Nothing great has been accomplished in this world without passion.”

Georg Wilhelm Friedrich Hegel

“All thoughts are permitted; writing demands reflection.”

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4 min read

Philippe Léopold-Metzger, CEO of Piaget, explains why China remains Asia’s strongest market for watches and sets out his strategy for the next ten years: exclusivity, a stronger Jewellery business, and control of distribution. There can be no getting away from China, which is now the number-three destination for Swiss watch exports. But what about Asia overall? Philippe Léopold-Metzger, CEO of Piaget, gives his view.

Asia is a vast and complex market. What's your analysis?

I usually associate China with countries whose economy is dominated by the Chinese diaspora, namely Hong Kong, Macao and Taiwan in North Asia; Singapore, Malaysia and Indonesia in South-East Asia. While China is by far the biggest Asian market, Taiwan is the most sophisticated. For historical and cultural reasons, Taiwan paints a fairly accurate picture of what the Chinese market will be once it reaches maturity in five to ten years’ time. Japan and South Korea, the two main rivals, don’t come under the same influence from China and therefore have to be handled separately.

Many people see China as the new eldorado for Swiss watches. Do you?

Absolutely. We make almost 60% of our sales in Asia excluding Japan and South Korea. One in every two customers is from the People’s Republic of China. This should give you some idea how important this market is. The Chinese, who can pride themselves on being one of the most remarkable civilisations for art, are enlightened buyers with an eye for beauty. Businessmen, who make up most our of clientele, have taken the best from their ancient and recent history. They are proud to wear precious objects as a sign of their success.

How long do you expect this state of grace to last?

I think China has enough growth in reserve for several decades. I base this on a number of indicators, such as the expanding middle class, rising domestic demand which in the longer term should reduce China’s dependence on exports and hence its exposure to the global economy, and the fall in the savings rate. The Chinese have traditionally saved a large part of their income to compensate what has so far been an insufficient welfare system. However, times are changing and China’s pension system is making headway. As a result, the Chinese are more hedonistic. The spectre of a social revolution hasn’t gone away, but Europe is witnessing plenty of ups and downs too and I see no tangible cause for alarm. I’m confident for 2012.

Are there alternatives to China and if so, what are they?

I believe we shouldn’t spread ourselves thin but rather focus on China. Having said that, Singapore is a strategic market because, apart from local Chinese entrepreneurs, a lot of Indonesians go shopping there. I also like Thailand, where industry is developing fast and social standing is important. Thai women love jewellery. This is a very buoyant environment for us. Japan has stable growth and South Korea is on the rise. The Philippines are the one market which frankly I don’t understand. There are certain similarities with other countries in the region, in particular the influence of the Chinese diaspora, yet the market is still weak and distribution poor quality.

Leaving Asia aside, what about Latin America?

One hears a lot about Brazil, but prohibitively high customs duties continue to divert customers to Miami. My money would be more on Mexico or Argentina.

Do you adapt collections to local tastes?

No, because our customers want the authenticity of the brand. Our history and our universe are our greatest assets. In Asia, for example, the Altiplano is hugely successful because extra-thin watches, our speciality since 1957, are a definite statement of elegance. Of course, we may, exceptionally, launch a series inspired by local tradition such as the Dragon collection, which we will unveil in early December to celebrate the new year.

What is your strategy for this new eldorado?

A three-part one. First, keep control of our distribution in China from our subsidiary in Shanghai. We plan to open five or six boutiques a year, both wholly-owned and franchised. We also intend developing our retail network, ideally to around forty points of sale. Our second objective is to strengthen our Jewellery business, which has a comfortable margin for growth thanks to a high level of advertising investment. Thirdly, and more generally, we will continue to promote our image as a prestigious and creative brand that will never be anything other than exclusive.

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