The luxury watch market is as global and as luxurious as high-range fashion industries come.
Expensive timepieces not only do a great deal more than give the date and time, but are increasingly considered sound investments, often becoming heirlooms.
Unique one-off pieces, which can cost as much as a car, are frequently appearing in the Gulf, both in store windows and on the wrists of a select few.
With the region’s real estate market and car industry both back to pre-2008 levels, is it now turn for the luxury watch segment to make a second attempt to be a global leader?
“If you look at the Swiss Exportation figures to the Middle East, you will see that the figures are above those of 2008,” says Maxime Ferté, regional director of IWC Schaffhausen Middle East, North Africa, Turkey and India.
“But I would say that this is not because the market was or was not affected by the crisis, but rather more because countries of the Middle East have continued to grow and develop themselves since 2008, starting with Dubai.
“You can find the same phenomenon in other strong emerging regions like Asia and South America, with China and Brazil being their main actor.”
Jean-Marc Jacot, CEO of Parmigiani Fleurier, says the Swiss brand recovered to pre-crisis levels in the Middle East within three years.
“Since 2011 we recovered from this global financial crash and reached the same level of performance before 2008. This segment [Middle East] was less affected than the average watch segment and the recovery was faster as well.”
Yassin Tag, brand manager for Vacheron Constantin, Middle East and Sub-Continent, says the global downturn effect on the Middle East market lasted between six to 12 months, depending on the brand. Its quick recovery he says was thanks to ‘stable Gulf economies’.
“Despite regional political unrest, the Middle East watch market saw a steady and regular double digit growth again last year,” he says.
“The market is as confident now as before the financial crash, however, less extravagant and more cautious.”
Even with added caution the immediate future of the luxury watch market should tick along nicely, if the Salon International de la Haute Horlogerie (SIHH) in Geneva at the start of the year was anything to go by.
“There is definitely a lot of potential in terms of growth since the region is only starting to invest in its infrastructure. Dubai is the leader thanks to its mega malls,” says Ferté.
“Abu Dhabi is in its wake, with the development of Etihad, Sowwah Square and Yas Island, while Qatar, Kuwait and Saudi Arabia are just at the beginning of their plans.
“We will witness incredible changes in the future, and the luxury industry will be at the heart of all the projects. We just need to get ready for it.”
Ferté has good reason to feel bullish. IWC plan to open boutique stores in several regions across the Gulf this year, including Abu Dhabi, Qatar, Saudi Arabia, Kuwait, Bahrain, and further developments in Turkey, Lebanon, Jordan and Oman.
Ferté is not alone. Jacot reveals Parmigiani is also expecting to reap big dividends from further investment in the Middle East, including a subsidiary in Dubai this year.
“Currently this market, including UAE, Africa and India, represents five per cent of our global sales. We already expect 25 per cent growth this year and in the five coming years, this market should generate about 20 per cent of Parmigiani’s worldwide sales.”
Tag says he too is confident of Vacheron Constantin’s long-term prospects.
“We expect the growth in 2013 to be again double digit. Hopefully it will remain so in the next five years, even if it is hard to predict the future.”
What isn’t so hard to predict are the styles and designs of watches that will sell better in the Gulf this year than any other global market.
GCC residents have a penchant for the ‘bigger’ when it comes to possessions, and that truth is affirmed in the watch market.
“Middle East watch customers are big fans of ultra-exclusive timepieces such as limited editions and bespoke watches. It is true that they tend to like larger models, high complications and audacious designs,” Tag says.
Ferté explains customers in the Gulf have a penchant towards watches that are ‘complicated’, such as perpetual calendars.
“Customers from the region have an extremely refined taste and are always up-to-date with what is new,” explains Ferté.
“They look for limited edition pieces and appreciate being part of the first ones to have access. They really appreciate the understatement of timeless designs.”
Middle East Expansions
Several brands at SIHH announced a shift in strategy for their Middle East stores.
Piaget heralded the launch of the world’s thinnest minute repeater, set to go on sale in the Middle East from September.
The brand also said it would be using larger dials than normal as it targets the GCC region.
“Women in the Middle East like bigger watches, so we have launched the 32mm,” said a spokesman for the luxury watch and jewellery brand.
“We’re changing some stores in the Middle East, including the one in Dubai Mall with the new store to be 5,000 sq ft,” he added.
Parmgiani also announced a restructure to its Middle East direction, with the moving of its store in Dubai’s Wafi Mall to the Dubai Mall, and a new opening in Abu Dhabi in the second half of the year.