Adrian Bosshard, who took over as CEO of Swiss watch company Rado last year, says that the Indian market is performing better than it ever has in its entire history, that smartwatches are good for the mechanical time-piece industry and that the company is on the lookout for brand new materials to use for future issues. Edited excerpts:
Watches seem to have gotten very expensive across the board in the last two years, so how has that affected your middle-of-the-road positioning?
The entry price segment is around Rs60,000, which is around 800 Swiss francs, and we have a few models which are a little bit below. But mainly, the biggest part of the collection is starting at that point, and we move up to around 4,000 Swiss francs, which is around Rs3 lakh, in the upper price segment. We are not the top luxury segment, but we are premium, and we are really in the field of achievable luxury products. Therefore, of course, we serve a large audience.
So what is your biggest challenge now as a retailer?
October was the best month we ever had in our history in India. The biggest challenge now, especially for the upcoming months, is to absorb the amazing rebound which has happened. But the rebound is higher than we have estimated. You know, people were at home, they were not able to move out or travel. So a lot of free capital was available. And when you cannot go on vacation, and you have saved money because the restaurant was closed, a watch is one of the best elements to give as a gift. It's also one of the only, let's say, jewellery-like pieces for a man, I'm not just wearing my wedding ring, but also the watch. Today our stocks are on the limit. The shipment time to the markets, of course, is also a challenge because, you know, the logistic challenge. The biggest challenge is to supply the demand within the next few months..
The retail presence of the whole world of watches is now changing with direct-to-consumer (D2C) and online selling influencers. Your future plans?
In India, we have 27 owned boutique franchise boutiques with strong partners from us, and have a total of around 210 points of sales. But in terms of sales, we are doing close to 50% of the sales in the franchisee boutiques and the reason is the customer who is purchasing luxury goods likes to feel the product, put the watch on the wrist. This brick-mortar distribution will definitely - in the future - be an important element for our strategy. We will strengthen the boutique experience in India probably in one or two years. We are heavily investing all over the world in the brick-and-mortar distribution. In parallel, we see that e-commerce is slowly growing and a big part of some countries' important sales but India is still bricks and mortar.
Yet, with what's happening today, with inflationary pressures, supply chain constraints, and the new ESG environment, how will price play out in the future?
We stay connected closely to the market, and in the portfolio of the Swatch Group, we are clearly below Omega and are definitely not doing the mistake of trying to move up to be too high in price. The main reason that you would see prices become higher is definitely also the exchange rate. Unfortunately, this is the big weakness which the Swiss economy has in our trade because our currency is tremendously strong. That means the Swiss Franc is rising permanently against all the currencies.
As far as the movements in your watches go, is it a highly modified ETA or is it an in-house movement that you share with some other product families in the Swatch Group?
You know, due to the fact that ETA’s offices are very close to us, we have very close cooperation with them and are working very closely. And when we have a good ETA movement, it makes no sense to totally reinvent the wheel, so we take an existing solid watch base and we are doing our modification on it which is highly modified but with individual rotors and of course individual design.
So what percentage of your global sales does India account for approximately?
I can say that India is in the top three countries worldwide. In terms of market share in the US, we are top of the top and the last two months what was happening in India was really amazing. And if we keep this trend up, we could soon see India fight for the number two position in terms of worldwide ranking of countries by Rado. This is of course for a market like India, where of course the luxury industry is not established like in a country like the USA or China. It's really a very well performing market.
By volume how much of the Swatch Group's watches does Rado account for?
Rado is one of the big brands of this watch group. And that will mean we have brands that have no competition with each other, and every brand has his price range and every brand has its own positioning. That being said, we are one of the big brands in terms of sales volumes.
The Rado True Square Tej Chauhan, which won a Red Dot design award in April 2021, uses high-tech ceramic.
Where do you see the future of watches going, given the impact of smartwatches?
We have clear statistics about the evolution of the watch industry in the different countries...while there are definitely challenges, we see that the value of the Swiss Watch Industry has increased. When we see, for instance, the industry of the Apple Watch and the smartwatch generally, it's finally a business where the people are wearing devices on the wrist and computers on the wrist. It's not comparable with a luxury product.
When I'm wearing this watch, this watch, you know, is an emotional consumption, it is a product which will stay 10 years, 20 years, 30 years, 40 years or for my whole life. It's something which is reliable for the long term. It's an artwork of the Swiss Watch Industry. It's something which I will never throw away for certain periods.
Today we see the trend of smartwatches as an opportunity for us. For the young generation to be used to wearing a watch. I prefer when somebody is wearing a smartwatch to no watch, because when he will wear a smartwatch a couple of years later, he will for sure start to get aspirational for the Swiss Watch Industry, and that’s when we make a start.
Are you going to innovate or use any new space age or futuristic materials in the future for any of your watches?
You know, when you are known as the master of material, it's clear you cannot just rest on your achievements, you need to always innovate. We have innovated during the last two years with coloured ceramic also, always with an improvement and adaptations of the different setup of the ceramic. These will not stop.
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