By Neil King
Swiss watches are a staple of the region’s luxury market, with millions of timepieces entering the Middle East every year. Hublot is one brand which is riding the crest of this wave in the GCC, having recently opened its second boutique in Dubai. Hublot’s chairman of the board, and legend of the watch world, Jean Claude Biver explains why Dubai is such a key market for the brand, and what traditional watch companies need to do in the wake of the smart watch boom.
The love affair between the GCC and Swiss watches is as intense as it has ever been.
It’s a relationship which has proved solid and long-lasting, and appears to be one that will stand the test not only of time, but of turbulence, with both sides staying loyal during the bad times of global recession and - more recently - tumbling oil prices.
The UAE continues to figure in the top 10 countries for importing Swiss watches, and in 2014 showed growth of 8.9 percent over the year before, with the value of imports exceeding $1.1 billion.
According to the Federation of the Swiss Watch Industry’s cumulative 2014 reports, Middle Eastern markets, including the UAE, Saudi Arabia, Qatar and Kuwait, account for 9.5 percent of the total value of imports, with 2,973,016 timepieces being exported to the region.
Luxury watches are a staple for businessmen and women throughout the GCC - a symbol of success and status, not to mention an indication of the wearer’s penchant for the finer things in life.
It came as no surprise when, in September last year, a Christie’s auction of 150 classic and collectable watches in Dubai raked in more than $2.2 million. And even less of a surprise that numerous manufacturers have signalled their intent to expand operations across the Gulf.
One such brand is Hublot which recently opened its second Dubai boutique to much fanfare.
The new store in Dubai Mall builds on the success of the debut store in Mall of the Emirates, and in keeping with the luxury nature of the watches, the launch party for the new outlet was full of glamour, including an appearance from timeless Arabic pop star Raghab Alama.
The man behind Hublot’s success - and the success of other watch brands including Tag Heuer, Blancpain and Omega - may not be a pop star but he is no less of a celebrity than Alama.
Jean Claude Biver, chairman of the board of Hublot, is a legend in the world of watches. His personal and professional biography makes for compelling reading, having dedicated his career to the art of watchmaking, and being credit by some as reviving the once beleaguered Swiss watch industry and “saving it from the quartz movement”.
Hublot, which was bought by French giant LVMH in 2008, remains a major success with boutiques around the world offering a limited supply of its highly sought-after timepieces.
Biver, incidentally, is also now the head of LVMH’s entire watches and jewellery division - a position which speaks volumes not only about his capabilities, but also the regard in which he is held.
This year Hublot is celebrating the 10th anniversary of its landmark Big Bang watch, and if the ample publicity surrounding this birthday isn’t enough, it was also one of boxer Floyd Mayweather’s main sponsors as he fought and beat Manny Pacquiao in the recent ‘fight of the century’.
The driving force behind all this is, of course, Biver. Sitting briefly with him it’s easy to sense the energy and acuity of the man - both vital requirements for somebody intent to keep a steer on his various roles.
And it’s with this energy that he extols the virtues of Hublot strengthening its position in Dubai.
“First of all, Dubai is one of the centres of the world,” he says.
“It’s certainly not the centre of the world but it’s one of the 10 major places in the world.
“Number two, Dubai is a country where Hublot has a big market share. It’s an important market for us, it’s also one of our five best markets in the world, and as such it made sense to have two or three or four boutiques.”
One of the important things for Biver is that Hublot’s watches are accessible not only to retail tourists, but also to people who live in the cities with boutiques.
“Dubai attracts more and more people coming from different countries, from Russia to China, and so on,” he continues.
“As such it’s important that when these people are travelling, when they come to Dubai for business for holidays, that they can also meet Hublot.
“But we actually sell more to residents than to tourists. Which tells us that the residents like our brand. Some other brands are selling much more to tourists than to residents – for us it’s the opposite.”
Revisiting the UAE’s impressive ranking for Swiss watch exports, and the success of the GCC in general, Biver adds: “I’m very happy with the development of the region. It’s one of the top 10 for sure and has become more and more important [for Swiss exports].
“The global market is still good – it’s still growing. By the end of March the Swiss watch industry is ahead of last year, which was a record year. And we are again I think with a growth of 2.8 or 3 percent, which is small but it’s still a growth.”
Small that growth may be, it’s easy to see that the timepieces are still in high demand, despite these being changing times for the industry. Luxury watches, and watches in general face a new, high-profile competitor to their customers - the smart watch.
The concept may not be new, with the first smart watch being released as far back as 1999, with Samsung’s SPH-WP10 watch-phone, and IBM’s first Linux wristwatch emerging a year later. But the boom in their development and popularity in recent months has certainly caused a stir in the industry.
The recently-launched Apple Watch is regarded by many to be a watershed moment in the industry, offering consumers the latest in wearable smart technology and enjoying an estimates one million pre-orders during the first six hours, and selling out soon afterwards.
But what does this mean for traditional watches? Biver is confident that there are more positives than negatives to be taken from the growth of the smart sector.
“The smart watch will certainly not kill the traditional luxury watch because both are not made for the same purpose,” he says.
“A traditional, luxury watch is a kind of eternity in a box. It’s like Big Ben. Big Ben is 150 years old but its watch is still working. It’s still accurate. Imagine, 150 years old and it’s still working. There are so few products that are still working after 150 years, and the smart watch for sure will not work after 150 years. It will not work in 10 years.
“So on one side you have technology that is due to become obsolete, and on the other hand you have art that is to stay eternal. So you cannot say that both are competing. In fact both are complementary. You can have both, you can buy both, you can even wear both on different occasions.”
Differences aside, Biver believes it is the common ground that will help traditional watches benefit from smart watches.
“The first thing to say is that the connected watch will definitely give incredible promotion to the idea of wearing something on your wrist. It will promote the wrist, no doubt, so we will have the biggest wrist promotion in our history.
“Never before did we have so much PR to wear a product on the wrist. And if you have a promotion for the wrist, indirectly you will have a promotion for the watch.
“The second thing we can say is that because of this promotion we might sell more watches than ever. Of course they will also sell connected watches, but the promotion is not stopping at the connected watch – the promotion is for the wrist, to wear something on the wrist.
“So we will definitely have a huge promotion for any watch, whether it is quartz watch, connected watch or a mechanical high quality watch.
“From that point of view, the connected watch is something very positive.”
The seasoned player is quick to temper any overexcitement with a strong dose reality, highlighting the downside for many companies in the industry.
“Now, where does it become negative, or where does it become a threat?” he continues.
“It becomes a threat probably for the brands that are today working in that price segment of the connected watches, which is a price segment between $200-800, and who are making very standard, normal quartz watches with batteries.
“People might prefer to buy a connected watch rather than a simple quartz watch, so here, in that price segment, with that type of watch, we have definitely a threat and certain brands will feel the threat.
“Many brands, however– 80 percent of the Swiss brands - will only get the opportunity because they are in another price segment.”
For that 20 percent that Biver predicts to be under threat, there are solutions. Adaption and collaboration being the main ones.
“If they can adapt then they have a huge opportunity. And the answer is easy. Take advantage of this technology and acquire this technology, or partner with some people from Silicon Valley who might have the technology.
“Buy the technology, partner with somebody, and then enter in that price segment with a connected watch and take advantage of the segment.”
For companies such as Hublot, and personalities such as Biver, there is much more to the coming years than keeping an eye on smart developments.
With the brand remaining strong throughout the region, I ask whether we’re likely to see any more boutiques opening in Dubai in the near future.
His answer is confident and committed, but he is honest in his assessment regarding time and place.
“I know Dubai is not going to stop and rest,” he says.
“When we had the first boutique we knew we would have a second one one day, but we couldn’t tell you where and when.
“When you have two you know you’re going to have a third one, but you don’t know when or where.
“So my experience tells me ‘don’t think now you are finished’. There will be another one. Certainly not tomorrow - I don’t know when - but it will come.”
The GCC may be a happy hunting ground for Hublot and other LVMH watch brands, but I query whether extra effort will be made in improving performance in other high-potential markets such as Russia and China.
He says: “Hublot is already very strong in Russia - we have already taken advantage of that market. We have two shops, which is not a lot, but nevertheless, and we have very good distribution, so we’re very pleased with our business in Russia.
“China is more difficult. The Chinese are less watch-conscious. There’s a long history in Russia with watches, but a little bit less in China. Hublot is a little bit weaker there, so we have work to do to promote our brand in China.”
Overall, however, it seems that the plan for Hublot is to continue along the current path, despite the curveballs thrown by technology and changing trends.
“For the time being there will not be a difference in what we do - there will be no interruption,” states Biver.
“There will be evolutions, of course, but for the time being I don’t see anything except what the connected watch will bring us. As I said, it’s an incredible promotion for us, and can bring new sales. Until today many people were not ready to wear a watch. People don’t wear watches these days, but that will change now.
“So that is probably what we will see in the future - a new push, a new trend for watches.”
The executive is unwilling to set in stone an opinion as to which direction the trend will end up going, but he does offer a few thoughts as to how things will change.
“I can only imagine things will go more and more in colour,” he says.
“People now are becoming more colour conscious. Black and white has more or less disappeared, except in art. People like 3D and colour.
“Colour technology, and working on screens, is giving you more and more colour precision. But it’s not just that. Colour is also life. Colour is hope. Flowers are hope, nature is hope. So I think that we might have more and more watches that are colourful.”
Colour, hope, flowers, nature: These are the flashes of artistic expression have punctuated Biver’s career constantly and regularly, and one of the reasons he has stood out not only as a success, but a legend of the industry.
Boiled down to one word, you could call it passion. And it’s this passion which will keep him in the watch business until time itself calls an end.
“Passion, normally, once you have one you will not lose it,” he enthuses.
“Passion is eternal. The passion of Mozart for music did not disappear until he died. The passion of Picasso for his painting did not disappear until he died. Passion cannot retire. Love cannot retire. The love you have for your partner, or the love you have for your parents is something that normally only disappears the day that you die.
“And passion is love. It’s an expression of love. And as such, passion doesn’t normally disappear.
“Therefore I am still enthusiastic to work, and I still feel that I’m privileged to have the right and the support, and to have my job.
“So I’m rather saying thank you than goodbye. Always.”