Innovation was the key to Rado’s success in India in the past 50 years, believes Matthias Breschan, CEO, Rado. "We have to make sure that we also continue to innovate in order to stay strong for the coming 50 years," he adds.
He says the luxury watch brands that are suffering today were doing rather well quite a few years ago. But they increased their prices without having altered the substance, the value that is inside the product.
Also Read: Luxury brands step up battle for travelling shoppers
He doesn’t see the need to move Rado upstairs because it is positioned between Tissot and Omega. "We have a strong brand in each price segment, so our objective is clearly that we always try to bring best value for the price segment that we are strong in," Breschan told CNBC-TV18.
According to him, 2012 was a historic record year. He does not see why 2013 will not be another record year. He is also very optimistic about 2014.
Below is the verbatim transcript of Matthias Breschan's interview on CNBC-TV18
Q: I want to understand from you if you talk about Rado's global expansion plans and global expansion strategy, what are your plans in India going forward in terms of expansion, in terms of growth, what are you looking at right now?
A: What made us very strong in the past 50 years in India was that Rado was permanently innovating. We have to make sure that we also continue to innovate in order to stay strong for the coming 50 years.
Q: In terms of the consumer market as a whole in India, the consumer story has been growing despite challenges that are present in the Indian market, despite the slowdown that we have been seeing. Specifically talking about the luxury watch segment, it takes around 50 percent of the overall luxury product market as a whole. Do you see that segment growing in India?
A: The brands that are suffering today are those that were accelerating several years back when some brands increased prices drastically without having changed the substance, the value of the product and of course you can always reposition your brand back. You need to make sure that if you change the price, you need to change at the same time the substance, the value that is inside the product. If you only change the price and tell people from one day to the other that now you are good because the product is more expensive is somewhat cheating the consumer and those brands that stay disciplined, try to bring in best substance, value for money, even when the market is getting more difficult they turn out to be very successful.
Of course the Swatch Group, we have a big advantage because we have a leading brand in each of the price segment. We have no need to move Rado upstairs because Rado is positioned right between Tissot and Omega. We have a strong brand in each price segment, so our objective is clearly that we always try to bring best value for the price segment that we are strong in.
Q: Last two years have been fairly challenging for the consumer market, as well to an extent people are rethinking there are inflationary pressures, people are rethinking large scale purchases. Why it is still happening? I want to understand from you last two years how did you segment and position your pricing accordingly to meet those challenges?
A: I must say for Rado as well as for the Swatch Group, 2012 was a historic record year and there is no reason that 2013 will not be another record year and we also stay very optimistic for 2014. I think the reason for this success is first of all because the Swatch Group is present in all different price segments. Brands like Rado that were traditionally always very strong in the price segment of 1,000-4,000 Swiss franc always try to improve the substance, offer that we have in this price segment, but never changed or moved out of the segment that Rado was traditionally stronger in.
Q: In 2013-2014 you will continue with the current pricing strategy, but given the fact that there had been some challenges, any major changes or any major repositioning of your strategy that you may look at?
A: Of course. The strong depreciation of rupee hurts us like everybody else, but there is nothing we can change about this.
Q: Any kind of change in your pricing strategy? You will continue to have products across the globe, across price segments; that is what you are looking at?
A: Exactly. No changes.
Q: How different is the Indian consumer from the global consumer?
A: The Indian consumer definitely became very knowledgeable and demanding in the past 10-15 years in terms of watches, because of course not only the perception of watches changed a lot, the watches are not simply a tool anymore to tell the time, but it became an accessory that says something about your personality, your lifestyle, your preferences, your values and the consumer is more and more educated also about technical aspects in terms of materials on one side and movements on the other. That had changed the whole perception at the market in the past 10 years and that helps us to develop Rado so well in India.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
