Swiss Luxury Watchmaker Exports 40 Percent Of Products To China
In the face of lackluster global economy, Swiss luxury watchmaker Hublot is sticking to its notoriously upbeat business philosophy more than ever: Spend more. Make more noise. With China’s economic growth decreasing to 7.6 percent in the second quarter of 2012 from a year earlier – the slowest pace in three years — many are taking the fall as a ticket confirmation of China’s deceleration following several years of breakneck growth.
For Hublot, which currently exports 40 percent of its products to China, this dip, and tighter spending from Chinese luxury consumers could dampen CEO Jean-Claude Biver’s hopes of a “hundred years of growth” in “watch-conscious” China. However, the ever animated and enthusiastic Biver remains optimistic, treating the recent financial slowdown as fuel for his ambition and an incentive to further his company’s reputation in East Asia. Speaking to CNBC this week, Biver said, “There is only one way to catch up, that is to make more noise than others. To make more noise, you need more investment.” Here, Biver speaks of a very specific type of investment — investment in innovation. Added Biver:
“When there is no innovation, there is no future. When the future is not clear, you must invest in innovation. The research and development (sic) is the only way to master the future. The more you innovate, the more the future will be your friend.”
Showing prescience on the trajectory of the luxury industry in 2012, Biver told Bloomberg last year that he believed innovation arises “either from technology or material.” In this sense, Hublot has kept up with its competitors, patenting “Magic Gold,” a scratch-resistant gold for its watches, and paying close attention to emerging trends in each of its global markets. In a chat with Jing Daily last year, Biver anticipated trends toward ultra-lightweight watches in China and riffed on vibrant, colorful gold watches that would outrun their conventional yellow- and white-gold predecessors. Biver assures us that “in a time of crisis, this type of product is so much different, so revolutionary and so unique that people, if they buy a gold watch, they will come and buy our gold watch. As soon as you are in crisis, innovation is key.”
One way Hublot has kept a leg up on its Swiss competition in China is by courting a specific male consumer, teaming up with brand ambassadors from the sports world as well as Chinese superstars. Benefiting from the massive popularity of basketball, soccer and auto racing in China, Hublot — in addition to partnering with the NBA’s Miami Heat and Dwayne Wade — acts as the official timekeeper of the World Cup, UEFA Euro 2012, and Manchester United, and is the official watch of Formula 1. In 2010, Hublot named Jet Li their first Asian brand ambassador, and since that time the brand has partnered with provocatively popular blogger Han Han, most recently on a limited-edition watch and charity project.
As a relatively new entrant to the Chinese market, competing in the market for a little over two years, Biver has faith that Hublot’s smaller market share in China, and any general sales slowdown the brand experiences in China, will be compensated by a pick-up in Japan, the US, and Hublot’s European home base. That is to say, Hublot’s lower dependence on the China market and smaller retail footprint leaves it less susceptible to consumer fluctuations than the likes of Burberry, Cartier and Louis Vuitton, which have a massive retail presence in the country.
That said, Jean-Claude Biver reiterated this week that he fully intends to continue Hublot’s China expansion efforts in 2012, with plans to open nine more stores by year’s end, growing the company’s China locations from five to 14 nationwide.