SIHH 2015: First information report4 min read . Updated: 30 Jan 2015, 08:46 AM IST
The year's first major watch fair offers great new references and design ideas, but leaves us wondering if we've gone back in time
Geneva: There was a strange feeling in the air at the 2015 edition of the Salon International de la Haute Horlogerie (SIHH) in Geneva. A feeling that seems to say: “We’ve been here before, but not quite like this."
The event, often called the Fashion Week of the watch industry, largely features high-end houses belonging to the Geneva-based Richemont Group of luxury brands, with a few other brands thrown in. This is by no means an exhaustive cross-section of the global watch business. Watches featured at the fair typically start at price points of €2,000.
But, always scheduled in January, SIHH typically provides a more than adequate bellwether for the next 12 months of business for the Swiss watch industry in particular, and the global luxury sector as a whole. It can tell you plenty about where the luxury business is headed, which markets are seeing investments, and where the sector’s major fears and hopes lie.
So what did we see when we gazed into the crystal ball that is SIHH 2015?
A year in transition
SIHH 2015 seems to follow on, in many ways, from the sobriety and cautious optimism that we saw in 2014. Last year, the fair was somewhat thin on eye-catching novelties, but offered many references with elegant, minimal designs, priced in what are low and mid ranges for this sector. Brands seemed content last year to tweak existing models and only experiment, if at all, with great restraint. This year, the tendency to try new things was even more muted. Indeed, SIHH 2015 actually seemed like another week of SIHH 2014 separated by a year-long lunch break in between.
What is less clear, though, is the precise reason for this continued caution. What are brands afraid of? Daniel Riedo, chief executive of Jaeger-LeCoultre, told Indulge that he’d be happy to see good single-digit growth this year. “We’ve seen many years of double-digit growth. Even after the economic downturn. That pace has slowed now," he said. But a year of single-digit growth would lay the foundation for more experimentation and excitement in 2016.
Why this cautious optimism? It is tough to put a finger on it. Watch brands are notoriously reticent about expressing business concerns. But I think this caution stems from uncertainty about growth—brands seem unsure where it will come from. China (see next point) is once again becoming a focus. And so is the US. But what watches will sell? At which price points? No one seems entirely sure.
Though there is a much simpler explanation in play here. In the post-Lehman era, perhaps brands have become much more cautious as institutions.
The dragon rumbles
China and the Asian markets are important again. In the recent past, there was a tendency to play down the dependence on China. Especially in the light of rampant fear-mongering that China was on the verge of a catastrophic economic slowdown. As this fear has subsided, brands feel more confident placing bets on that market. They are opening boutiques again, creating special products for that market and once again trying to engage deeply with Chinese consumers.
The phase of explosive Chinese growth is perhaps behind us. But it still remains the fountainhead of growth for the luxury market. In a sense, SIHH 2015 was much being at SIHH 2011, when everyone looked eastwards. Just that this time the dials are smaller and the models less opulent.
There has always been an unspoken rule in Switzerland when it comes to talking about the Indian market. Brands always spoke of the potential and the future. Never about the problems that they face with taxes, retail space shortages and operational challenges.
This year, honesty about India was no longer a taboo. More than one brand told us that they had reined back their expectations for the Indian market.
There seems to be two reasons for this. One, prolonged periods of investment and engagement simply hasn’t yielded returns. At a time when more brands are talking of efficiency and slower growth, focus seems to have shifted. Brands now want to spend and invest in markets that will yield immediate returns. India seems to have fallen out of that category.
The second reason is good for India but bad for the Indian market: the “wink-wink, nudge-nudge" market for “gifts and presents" everywhere, especially in Delhi, seems to have stalled. As they say, one man’s acche din is another man’s sales shortfall.
More than one fair
For all its glitz and glamour, SIHH is also a place where serious business gets done. Some brands book as much as 85% of the year’s sales during the fair. Perhaps this is also beginning to change. Several brands told us that they planned to launch more products through the year at other events and trade fairs. Richard Mille, for instance, only unveiled two new references in Geneva, an abnormally low number.
These products will no doubt be launched at events in Singapore, Hong Kong, Beijing, Abu Dhabi and elsewhere. Does this means SIHH is losing its mojo? Not really. The fair will remain important and central to the luxury business.
What is losing its primacy is the European market. Brands simply want to go where the customers are.
Wondrous women’s watches
Remember when we told you last year that there had rarely been a better time to buy women’s watches? That trend continues. This year, we’ve seen choices evolve into more complicated and sophisticated movements for ladies. Also, several popular models for men have seen wonderful new variants in smaller dial sizes that will appeal equally to both genders.
A truly wonderful time to be a woman with a taste in watches and a budget to match.
For more news, reviews and product profiles, wait for our SIHH 2015 special issue later this year.