Within 45 days of opening its first boutique in India in Mumbai, Swiss luxury watchmaker Hublot managed to sell 10 pieces of its uber luxury watches, which can cost anything from ₹5 lakh to ₹16 lakh apiece.
Not a mean feat considering damp consumer sentiment in the country owing to an economic slowdown, along with the toll that steps like demonetisation have taken on the market for luxury goods in the country. Despite such hurdles, Ricardo Guadalupe, chief executive officer of Hublot, is bullish on the Indian market.
It helps that Hublot has decided to align itself with a sport like cricket, which attracts equal attention from masses as well as the elite. Hublot partners with the International Cricket Council for all its tournaments. It engages in marketing activities around events like the 2019 ICC cricket world cup, and even launched a special edition watch on the occasion of the tournament, which takes place once every four years. To connect with Indians, Hublot has also roped in star batsman Rohit Sharma as a brand ambassador in the country.
In an interview with Fortune India, the Spaniard who lives in Switzerland and is an industry veteran of three decades says that though Hublot’s sales in India have stayed stagnant for the last three-four years, he expects growth this year. He also explains why Hublot, unlike many of its Swiss peers, isn’t averse to riding the smartwatches wave.
You have recently opened your first boutique in India in Mumbai. Most of Hublot’s prospective buyers are well-travelled and often shop for luxury watches abroad. Then how does an exclusive store in India make sense?
You are right. We see a lot of Indians buying Hublot watches at our stores in London and other parts of Europe. That is the case for other nationalities like the Chinese as well. But we believe in being present in the home country of nationalities like Indians as that demonstrates our belief in that country and its customers.
When you open a standalone boutique in a country, it shows that the brand is investing in the country. And these investments often lead to results (purchase of Hublot watches) outside the country as well. When Indians see Hublot stores in India and the brand investing in events and partnerships with sports like cricket, it shows the brand’s involvement with India.
The luxury market in India, including that for high-end watches has suffered since the government decided to ban high-value transactions in cash. What has Hublot’s experience in this period been?
Yes, we have been hit by that as well. Our sales haven’t declined but been flat for the last three-four years. But we believe that if we continue to invest, we will witness growth. The Indian consumer likes luxury products in general and watches in particular. It is like a piece of jewellery for men and even women.
The philosophy of the consumer has changed. The world is changing and people know they have to adapt. They know they have to respect rules and pay by credit card and so on. It is obvious that the world is changing. The same thing is happening back in Switzerland. But we really think that this year should be much better than last year.
We are also devoting a lot of presence in building a digital presence for the brand and will probably launch an e-commerce offering next year since we are aware that Indians are increasingly buying things online.
How many stores do you have around the world and how many would you like to have in India?
We have 28 stores around the world and this (in Mumbai) is our first one in India. We would like to have between two and three stores in India. To open a store you need to have the right location and partner.
What is your view on the emergence of smartwatches as competition?
It is true that smartwatches have revolutionised a segment of the market that is between $300 to $600. There are some Swiss brands who play in that band and they are suffering. But the legacy of Swiss watches, in general, is centred around complex mechanical movements and innovation through design.
We are in a segment where we don’t really have too much competition from smartwatches. But we are an open brand. We brought out a smartwatch during the football world cup in Russia in 2018 and will be launching a new smartwatch next year during the Euro Cup. We believe Hublot has to invest in new technologies and that there is a space for luxury smartwatches. We won't produce smartwatches en masse like Apple but will do a select few and price them at a premium.
Some Swiss watch brands have said they won't look at smartwatches at all. Is the industry divided on their approach to smartwatches?
Yes, of course, they are divided. It is true that smartwatches have no connection with the traditional art of Swiss watchmaking, but many brands like Swatch and Tissot have made quartz movement watches and those are nothing by electronic watches like a smartwatch is. We have an open-minded approach to this.