‘Luxury purchasing power in India shot up after covid’

New Delhi: Swiss luxury watches have had a stellar run around the world since the pandemic outbreak. In India, imports of these watches in the first half of 2023 rose 21% from a year earlier, crossing 98.5 million Swiss francs, or ₹933 crore. One brand—Rado, owned by The Swatch Group—is looking to ride that wave. The company this week signed on brand ambassador Katrina Kaif to attract more women luxury buyers. Its revenue and presence are growing in India, with about 30 brand boutiques. While some European markets are heavily impacted by geopolitical issues, the company’s global CEO, Adrian Bosshard, said India is as important a market as the US is for it today. Edited excerpts from an interview:

Two years ago, you said that India was a No.3 priority market for you globally. Does that still hold true? Have you achieved what you had set out to do during the pandemic?

I must admit that even the most enthusiastic sales expectations at that time have been achieved and crossed in India. Despite the challenge of inflation, and partially being hit after the covid-19 pandemic, we were able to deliver to and attract newer Indian customers. We see a strong increase in local consumption despite all the economic challenges around the globe. We also see Indians are travelling again and again and buying around the globe across tourist destinations. India is a huge country with a lot of potential customers and also with a lot of new watch enthusiasts.

But India is for many luxury companies, still a two or three store market. Your comment?

Despite the fact that globally, in the luxury industry, India is still far behind China, US or also several countries in Europe, it’s growing and for us and it undoubtedly is one of the top three markets. China and UAE are leading and the US and India are neck and neck for us.

In what way has the Indian consumer changed since the pandemic?

We sell watches between $1,000-6,000, or about ₹85,000- ₹5.1 lakh here. In the past, we were very strong in the price segment of ₹85,000- ₹1.27 lakh. But we now see that the price point has shifted to increase to ₹1.8 lakh– ₹3.6 lakh here. The purchasing power is rising in India. This is the same revolution as what happened in China 20 years back. In the last two years, we already see more and more Indians participating in this luxury market. I definitely believe in the next five to 10 years this will heavily change. With the ambition and intelligence that the Indians have, greater participation in the luxury market will be an automatic consequence.

But aren’t Indians known to purchase a lot of their luxury abroad?

Yes, that is also true. I see that Indians are purchasing more and more around the globe and are becoming very important customers in tourist areas. The share of the Indian customers around the world is increasing.

Are Indian women buying watches as well? Is this an untapped market?

Yes, we have appointed Katrina Kaif as our new brand ambassador. She is a global face and she will be used for communications around the world. We feel that she is the right person to represent the brand and our new collection targeted at women buyers. At present, we are 50-50 in terms of women and men buyers globally, but we think we are under-proportionately selling to women here and we want to change that. The watch industry in the country is maturing to a level where now more and more women are wanting to buy into timepieces. We usually have our associations for a longer term. For instance, with Hrithik (Roshan) as well. It’s been over 12 years that he’s been endorsing the brand and we hope to have a similarly long term association with Katrina Kaif too.

Have your supply-related disruptions from the pandemic eased now?

We are producing everything in Switzerland in our own factories; so we haven’t had a huge problem on the supply side in our factories. Of course, when there are problems with raw material, steel or diamonds in the supply chain, some slowdown can happen. But on the production side, we were fine. We did have a challenge with China last year. But today, we are back to the normal with supply, logistics and all these things.

From a geopolitical standpoint, China impacted you. Did the Russia-Ukraine war, and now the Israel-Hamas conflict, disrupt business?

Russia was a very important country for us in the past. Now, since over one year, no business has been done there. With the actual situation, especially no business in Russia, also in the Middle East, there are some challenges, so there are individual countries where we are under the target. But globally, we are fully on track and in the markets where there are no geopolitical conflicts, the business is running fully on our expectations, like in India.

Globally, are gen-z shoppers shopping any differently from their millennial counterparts?

Those that have started to earn money, while they spend fewer times and prefer to buy less, they buy real value. This plays right into our hands because we are producing luxury goods which last for decades. A lot of customers also want ‘quiet luxury’ or become more discreet without large brandings or signages, without showing to the world that they are evolved.

Some large luxury watch companies have created an artificial shortage for some of the special edition watches in the last few years. While people are willing to buy, brands are not releasing these products. Why do you think it happens?

We are not, for sure. We are a brand that has a huge demand globally and production to meet the capacity. But yes, there are limited edition watches sold around the world which may have just 500 or 1,000 pieces globally, so that is more of a “communicated” shortness rather than a “forced” shortness of supply.