“The real secret is consistency, continuation, focus and staying in the same price league. Be close to the market, and don’t try to do everything”
DA: Considering the slowdown in the market, what’s the secret behind that? WVK: Thanks to China. First of all, it’s because we are in the right price positioning. This price segment is not at all affected, or not so much affected by the anticorruption campaign. But the real secret is consistency, continuation, focus and staying in the same price league. Don’t do this yoyo business move, up and down, up and down. Be close to the market; listen to the market; have local people; be very close with the retailers; and never try to do everything.
While the result has clearly shown the strengths of our company in China, we have unfortunately lost a lot in Hong Kong. The Umbrella Revolution in 2014 where the protesters occupied Hong Kong’s tourist area made the government take a decision to drastically reduce group tourist visas. So, the Chinese tourists then shifted to Japan or to Thailand for their holidays. We could, luckily, compensate for the loss of sales in Hong Kong with that from Europe. Even last year with Korea suffering from the spread of MERS, we still managed to continue our crazy success story. DA: Speaking of success stories, is it true that the Swatch Group is going to create smartwatches? WVK: It’s not my problem. Within the Swatch Group, two brands have expressed their interest in this business, and you can ask those brands directly. The group has given us liberty for the direction of the company, and Longines will not go into this line of business at least for the time being.
If you ask me why, I’ll go back to the statement: consistency, continuation and staying in our league. I’m very pleased that Apple, Samsung and some of the Chinese companies do this because they have the expertise. They possess the rapidity to play around with such a product. We have also investigated the subject in our way. After the survey we did with the people who have smartwatches, the main purpose of this watch is not time. But, I believe that Apple, Samsung and other brands, will help us convert some of the people having this product on their left wrist to one day go into the traditional watch business.
As per my understanding for having been in the industry close to fifty years, a watch today is not only about time, but it is also a status symbol. Apple is not a status symbol. A watch is a branded, emotional consumer product.
I’d like to anticipate the next question: What do you think about Swiss traditional watch companies going into this business? We’ll see in one or two years, especially of the brands who want to do everything, from creating tourbillon, then cheap watches, to connected watches, glasses and so on. You know we’re in the