CEO Corner: Aldo Magada, CEO of Zenith Watches, on Courting China’s Swiss Watch Connoisseurs

By all accounts, Swiss luxury watch brand Zenith and its professorial-yet-jovial CEO, Aldo Magada, have had a remarkable year, punctuated by two extraordinary global partnerships: one with the Habanos flagship ultra-premium cigar brand Cohiba, another with Range Rover, the luxury SUV line.

Like many Swiss watch brands, Zenith was founded in the latter half of the nineteenth century: 1865, in its case. The Manufacture Zenith swiftly gained recognition for the precision of its chronometers, which have won 2,333 chronometry awards over the decades. Zenith debuted its fabled El Primero chronograph calibre in 1969, and today it remains one of a select group of traditional luxury watch brands that produce all their movements in-house. It even sells movements to other manufactures—Rolex, for example, for the Daytona, which from 1988 to 2000 was powered by the Rolex calibre 4030, an El Primero–based movement. Acquired by LVMH in 1999, Zenith is one of LVMH Watch Division’s three global brands along with TAG Heuer and Hublot.

Magada arrived at Zenith in 2014. Before that, beginning in the mid-1980s, he was at the Swatch Group for a decade and a half with the Piaget and Omega brands. (Four of those years he spent at the side of Jean-Claude Biver, who eventually brought him to Zenith.) Magada has also been president of Gucci Timepieces, leaving after two years for a successful stewardship of Technomarine and Badollet. He then joined Breitling as international director of sales and business development, the position he held immediately preceding his arrival at Zenith.

Predictably, Zenith under Magada has tapped into the marketing strategies laid out by Biver at both Hublot and TAG Heuer: First came Zenith’s foray into the vintage racing circuit as the official timekeeper for five races organized by Peter Auto, a motorsport event production company known for classic car rallies and concours. Then came news of the partnership with Cohiba, a name known to cigar aficionados worldwide and synonymous with the epicurean good life. That collaboration yielded the new, sold-out El Primero Chronomaster Cohiba Edition; a second watch in the series is on its way in 2017.

The Zenith El Primero Chronomaster Cohiba Edition. (Courtesy Photo)

The Zenith El Primero Chronomaster Cohiba Edition. (Courtesy Photo)

Via events in Paris and New York, Zenith has also just launched its partnership with Range Rover, one of the few remaining luxury automotive brands without a fine watch partner. The resulting limited-production Zenith El Primero Range Rover Special Edition, with an aluminum ceramic case, garnered rave reviews and is now available worldwide.

The brand has also recently been active with promotions in China. On October 19, it hosted a celebration at the Great Wall of China to announce that snooker champion Ding Junhui is a new global brand ambassador.

On an unseasonably warm day this autumn, Magada sat down with Jing Daily at the terminally hip Mercer Hotel in Manhattan’s SoHo to take stock of the past year, discuss Zenith’s grand China plans, and assess what the future might hold.

Tell us about your new partnership with Range Rover and what it means for the China market, where Jaguar Land Rover sales in September were up 28 percent over a year earlier.

Range Rover is a global partnership, and the Chinese success of RR is huge. Despite the economic slowdown in China, [the country is] recovering now. It’s an important luxury market, and for us, this partnership is both global and a means to make sure the Chinese understand our brand—a non-verbal way to introduce ourselves.

Zenith currently has six boutiques in mainland China. Are there any current plans to expand?

Yes. It’s important for us to have the right partner—particularly in Shanghai, but also in Beijing—and the mix with local retailers gives us a strong way to market the product. Even though we’re very familiar with the market, Chinese people know it better than us.

The brand emphasizes that its heritage dates to 1865 and its movements are made in-house. How important are craftsmanship and brand history to Chinese watch consumers? Do you see their priorities changing?

In the beginning, Chinese were suspicious about certain fancy brands that appeared within [the last] two to five years—however, history makes people confident. The key is to explain that not only do you have strong roots, but you have to make sure you’re sticking to innovation, which [has been the brand’s] engine for more than a century. Chinese customers are sensitive to [watch] movements. They have a sense of keeping value. We have to explain the brand’s strong DNA.

During China’s recent Golden Week travel period, many Chinese opted to go abroad, where luxury shopping is a major activity for them. How important are Chinese outside China to Zenith’s global business?

They’re important for everyone, including Zenith. We have to be better-known so that people look for us when traveling. We’re selling quite well, both ladies’ and men’s watches. It’s important for us to make sure that people have the impression to make a good purchase. Even with all the taxes in China, global price continuity is key. It’s also important that consumers feel like they get the service done by us so we have direct contact with the consumer.

A Zenith promotional event at the Great Wall of China on October 19, 2016 featuring brand ambassador and snooker champion Ding Junhui. (Courtesy Photo)

A Zenith promotional event at the Great Wall of China on October 19, 2016 featuring brand ambassador and snooker champion Ding Junhui. (Courtesy Photo)

What portion of your sales currently come from China? Is this likely to change in the future?

The Chinese represent about 50 percent of our business globally, which is of course both inside and outside the mainland. Our future is based on increasing [sales] inside the mainland.

As the luxury watch market has slowed in Hong Kong and Macau, many brands have been renegotiating retail rents, or closing stores. What is Zenith’s strategy?

Not that long ago, we drastically repositioned our prices internationally. The Chinese are very sensitive to prices—consumers look on their mobile phones and compare prices, even between currencies. We are careful that the Swiss price, U.S. price, Hong Kong price, and mainland China price [at authorized retailers] are as equal as possible.

Jean-Claude Biver recently told Jing Daily that Zenith was the LVMH brand most affected by the Chinese government’s anti-corruption campaign. How so?

The solid-gold watch segment has more or less disappeared. There has not been not a huge drop in steel watches.

In a new austerity era in China, what are the best ways to market to an elite clientele?

In China, the best recipe is PR and events. We emphasize this, as it is the only way to have face-to-face time. Our brand is not known enough just to be bought. It has to be sold. It’s fascinating when people discover the brand, history, and stories—they say they never expected it from a brand like Zenith. This is not someone’s first watch; it’s their second or third.

As top luxury brands consider whether to embrace e-commerce in China—including selling on platforms including Tmall and WeChat—what is Zenith’s approach?

It’s a question of the maturity of the brand. E-commerce makes total sense if it’s mature. What is important on the internet is to [sell] through retailers that give you a regular price but also good service. On the internet, you have no service. At the shop, the experience is in front of a specialist, [where you] learn the ins and outs of the brand to make your own choice.

Categories

Industry Sectors, Watches & Jewelry