Making Moves in a Core Watch Market
New York Times, Feb. 22, 2016
In early 2014, Swiss watch imports to the United Arab Emirates “were slated to hit close to a billion francs,” or slightly more than $1 billion, that year, said Nitin Nair, editor of WatchTime Middle East, the regional version of the American quarterly that debuted that March.
Two years later, however, the watch landscape has shifted.
In 2015, Switzerland exported $22.1 billion in timepieces globally, a decline of 3.3 percent from the previous year. Exports to the United Arab Emirates, Switzerland’s 10th-biggest watch market, declined 6.7 percent over the same period to reach $969.8 million.
Even though exports to Saudi Arabia grew by 11.2 percent, Qatar by 5.4 percent and Kuwait, 1.1 percent, the dip in the United Arab Emirates, the Middle East’s single biggest market, has cast a pall over the industry.
As the 13th edition of the Doha Jewellery and Watches Exhibition opens this week, Swiss watchmakers are hoping that volatile oil prices and regional instability will not further complicate an already challenging year for the luxury watch business.
“To grow in 2016 in the Middle East will require successful product introductions,” said Philippe Léopold-Metzger, chief executive of Piaget. “The Middle East customer is highly aware and educated about quality watches. The market for diamond watches remains very strong, in particular for ladies. Men are much keener on technical or sporty watches.”
Mr. Léopold-Metzger said Piaget would focus on promoting its new Limelight Gala Milanese ladies’ timepiece at its eight boutiques in the region, three in the United Arab Emirates and the rest in Saudi Arabia, Qatar, Kuwait and Bahrain.
Women’s watches also figure prominently in Roger Dubuis’s regional marketing strategy. The Geneva-based watchmaker will showcase its new Velvet Blossom Trilogy of ladies’ gem-set timepieces in Doha — not because the Middle East demands a disproportionate number of women’s watches, but because Velvet is the brand’s “big hero” collection of 2016, said its chief executive, Jean-Marc Pontroué.
Mr. Pontroué added that Roger Dubuis’s commitment to the Middle East was such that the brand recently opened two new regional boutiques: one in Riyadh, Saudi Arabia, in February 2015 and another in the Dubai Mall in November.
“Being in Dubai is very important if you want to show the visibility of the brand,” Mr. Pontroué said. “It’s like being in New York.”
That’s because the United Arab Emirates, unlike its neighbors, is a tourist hub for visitors from China and Russia and from other Arabian Gulf nations. “I remember walking into a Rolex showroom in Dubai Mall around the Chinese New Year a few years ago, only to find it overrun by Chinese tourists,” Mr. Nair recalled. “But over the past 15-odd months, the dwindling number of tourists has affected sales.”
Ahmed Seddiqi & Sons, a family-owned Swiss watch retailer with 65 outlets in the United Arab Emirates, has done its best to overcome the slowdown by courting collectors at face-to-face events. Last October, for example, the company took the lead in organizing the first Dubai Watch Week, a five-day educational and cultural gathering featuring exhibitions, forums and master classes.
“Our main objective for 2016 will be to focus on enhancing client experience,” Abdul Hamied Seddiqi, vice chairman of Seddiqi Holding, the retailing operation’s parent company, said in an email. “This is no longer just centered around ‘during and after’ sales service, but rather building an emotional connection with our clients that starts even before they step into our stores.
“Through events such as Dubai Watch Week and our strategic campaign, which will be activated in the second quarter of 2016,” he continued, “we hope to create a community of individuals that will appreciate fine craftsmanship and build a relationship with the horological world.”
In Qatar and Saudi Arabia, powerful retailers, such as the Doha-based Ali Bin Ali Group, control a large portion of the luxury watch business, and, by virtue of their prestige selection, are helping to educate consumers on the finer points of haute horlogerie.
Still, stereotypes linger. Local buyers “suffer from the stigma of what people mostly think of the Middle East customer: Rolexes with diamonds,” said Maximilian Büsser, founder of the Geneva-based independent watch brand MB&F, who now lives in Dubai.
The success of Dubai Watch Week, which is slated for a second edition this fall, helped chip away at that impression. The region may maintain a well-documented preference for diamond-studded timepieces, but many buyers favor as well traditional themes such as horses and falconry, especially when depicted in enamel.
Local collectors also are eager to purchase complicated watches, said Pascal Raffy, owner of Bovet 1822, which has its headquarters in Fleurier, Switzerland.
“When collectors come to the Doha fair, there is a beautiful exchange between collectors who truly know the craftsmanship of the house, complications and miniature paintings,” Mr. Raffy said. “Here you have very knowledgeable ladies and gentlemen.”
At Christie’s Middle East, the managing director, Michael Jeha, has seen the watch business grow steadily since October 2013, when the house began holding twice-yearly watch sales in Dubai.
“Almost every auction has an extremely high selling percentage; one was even 100 percent sold,” Mr. Jeha said, singling out Rolex, Patek Philippe and Audemars Piguet as sought-after brands.
The coming year, however, remains clouded by uncertainty. “We’ll put together very curated auctions, focusing on top quality and price,” he said. “That’s the answer. It’s not about volume.”