INSIGHT: No wind-down in regional watch market

When Swatch Group recently announced a 42 per cent leap in profits for 2010, the brand largely attributed the rise to its increasing sales across Asia, driven both by its Breguet and Omega watches, as well as its more affordable eponymous range. 

Just prior to this, the Federation of the Swiss Watch Industry stated that Asia accounted for more than half of Switzerland’s watch exports last year, and Hong Kong was the largest single market for the industry. “Asian consumers now have a vast choice of options, from specialist watchmakers with a heritage of craftsmanship, to new design-oriented specialists, to couture and fashion brands, to sports brands” says Guy Hearn, head of consumer insights and research APAC, Omnicom Media Group. 

With a number of brands in the sector jostling for consumer attention, cutting through and standing out in this marketplace can be a tall order, particularly when much of the advertising in the upper echelons of the sector is largely analogous. 

The luxury watch continues to be a status symbol for business-focused males across the region and the most aspirational brands, including the likes of Rolex, Omega, Vacheron Constantin, Longines and Cartier, continue to run press ads in upmarket titles and undertake poster activity, notably at airports, to attract their target market of wealthy businessmen. 

One feature of such advertising that shows no sign of abating is the use of high-profile endorsers. “It is always important to partner with a celebrity that reflects the brand values you are trying to communicate,” says Hearn. “Whether you are emphasising performance, or precision, or sophistication there are clearly a number of celebrities that might be just right for your brand.”

And it is not just the luxury brands turning to celebrities. In India, Sonata’s more affordable youth-focused range continues to be promoted by cricket superstar Mahendra Dhoni. Targeting the country’s college-going youngsters, the brand is looking beyond traditional advertising to drive sales of its range. 

Seth Grossman, managing director of Carat China says that watch brands should move more with the times and embrace non-traditional media. “Traditional formats will still have a critical role to play, but the question is how to extend that into video channels, online and offline editorial, branded content on television, or fan pages in social network sites - but always executed in a way that is up to the stature of the brand.”

One way to break out from the clutter, according to Dave McCaughan, regional strategic planning director, Asia-Pacific, McCann Worldgroup, is for brands to create more and more defined roles for a watch, such as the extreme sportsman, the gym watch and, of course, the business/luxury timepiece. “These are all specialist segments that watches have focused on and should develop on a deeper level in order to develop brand character, more innovation and uniqueness.”

Moving with the times could herald the era of the truly multi-functional watch. 

“There will be growth in marketers trying to add functions and create new stories about what else the watch can do,” continues McCaughan. “There will also be more attempts to follow the cellphone and iPod model and integrate watches with other products and services.”