Rado: Still booming in India
Rado CEO Matthias Breschan speaks to Mint about the state of the business, key challenges, and the brand’s remarkable success in India
Rado CEO Matthias Breschan spoke to Mint about the state of the business, key challenges, and the brand’s remarkable success in India. Edited excerpts:
How has the fair been for you? It seems like times are difficult for the business?
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Much better than I thought. I thought that people would be more conservative. But I think we are beginning to see a change. You see 2016 was a difficult year. The first half was really not good. But already starting August last year I think things were looking good for us.
Rado is big in India...
It was an exceptional year for us in India. Because even 2016 for Rado in India was excellent. Despite being the number one brand in India we were still able to grow very strongly. All this in a very difficult environment.
Now I think everyone agrees that business is hard because several markets are doing badly. But are there structural problems in the sector? Problems that go beyond temporary issues of local demand trends?
I think one major problem has to be with many brands trying to reposition themselves. Many brands decided, and I think this was totally wrong, they wanted to become luxury brands. But what was the only thing they changed in their repositioning? Price. Of course you can reposition brands and products. That is fine. But you start doing something like that by first changing the substance of your product. You can’t just go to the consumer and say look we are now a luxury brand. And what have we changed? Just the price. This is cheating the consumer.
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And those brands are getting hit now?
They are getting penalized a lot. And I think also here when you look around. Some of those brands you don’t see them here anymore. For those brands that stayed within their price segment and tried to innovate... bringing state-of-the- art technology while staying within their price bands... I think they have managed to cope with the markets much better.
Has that been Rado’s case as well?
Let me explain our case in India first. We always had in India a very strong traditional loyal clientele. But now we have new products and novelties that also address a younger clientele in India. Also we grew in 2016. We got stronger in the market. I think consumers like that as well. They like brand that looks stable.
Younger clientele are both a challenge and an opportunity. First you have to convince them to wear a watch?
Yes. I think... you know the young consumer... you have to be careful. You are addressing a young consumer but still with a product that will last for a lifetime. It is not a fashion object that is outdated in six months. So that is a challenge. Also there is price. Here in Basel a watch that costs 1000 or 2000 dollars may not seem like a lot of money. I mean look at all the brands here. But this is a lot of money for the consumer. So we have to tell the consumer that our product that costs so much will last forever. Especially a Rado product will look the same on the first day as it will look five or ten or fifteen years later. This is a challenge to communicate but also an opportunity to stand apart for us.
In India, this was a huge advantage for us. Because of the gifting market, yes. But also because people want products that will last for years.
What will be the next step for you in India?
In India, we have to do a few things very carefully. First of all we have to keep our traditional loyal customers. But we also know that those customers are getting older, and that they are slowly being replaced by younger consumers. How do we address these younger clients? Not with a fashion item. We need to address them with something sustainable, durable, long-term value, and is lot more than just a tool to tell the time.
One of the aspects of this is educating the customer about ceramic. We produce watches with state-of-the-art ceramic materials. We have to tell consumers, especially younger ones, why our watches are made of the finest ceramic materials. Some of them will look at fashion brands and notice that their prices are lower. Why? Because there is good ceramic and bad ceramic. A low quality ceramic will change colour under UV light in the sun. But a Rado ceramic will never change colour.
But the good thing is that high-end brands have also started using ceramic. It has now become a noble material. This is good for us. But we have to keep communicating that our watches are full of high-tech.
So what do you think will become the key trends for 2017? How do you see the year panning out?
I think in the second half of 2017 you will see the market becoming more courageous. I think people will take more risk. There has been in the past years strong trend for basic three hand automatic watches. But I think later this year people will start going for larger, bolder, more innovative designs again. I think we may see a return to confidence.