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Sat 1 Dec 2018 04:42 PM

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Why Swiss watch giant Hublot is turning to Bitcoin

With the launch of its Big Bang Meca-10 P2P, Hublot has produced a cryptocurrency and watch industry first. Hublot CEO Ricardo Guadalupe and Wayne Trench, the CEO of digital asset brokerage OSL, tell Arabian Business about the collaboration

Why Swiss watch giant Hublot is turning to Bitcoin

Maverick Swiss luxury brand Hublot is already renowned for achieving a string of trend-bucking firsts throughout the industry, so it stands to reason that it has become the world’s first watch brand to be sold only by Bitcoin. In doing so, it has not only expanded its addressable market but has also found a way to be innovative in e-commerce.

“At the moment everyone is talking about online sales. Selling watches online is a challenge for any brand today and we thought that just to create an e-commerce site would not be enough, because we don’t want to be just like everybody else,” Ricardo Guadalupe tells Arabian Business from Hublot’s flagship boutique at Hong Kong’s slick Ocean Terminal. “I think the big deal is the type of operation we have created,” he adds.

Dedicated to the peer-to-peer payment system, also known as P2P, this new timepiece is available for purchase exclusively online with Bitcoin. Only 210 were launched – a nod to the fixed 21 million Bitcoins available in the world and coinciding with the currency’s 10th anniversary – although the wait list quickly extended to more than 600 people. Each watch costs 6,262.906652 USD/BTC, or around $25,000.

“We want to be unique and the first in everything that we do. So, in this case we created a very specific watch sold by Bitcoin. Every single watch is also unique in that each features the transaction number engraved on the edge of the bezel,” says Guadalupe proudly.

With the design of the watch inspired by the digital world – “We created the watch in blue because of the blue you can find on the web and the world of blockchain technology” – the technically progressive Big Bang Meca-10 P2P Limited Edition evokes elements of the digital age even though it is completely mechanical. Its 45mm case comes in microblasted high-tech black ceramic (zirconium dioxide) which is highly scratch resistant, while the watch comprises a skeletonised manufacture movement and a 10-day power reserve – another reference to Bitcoin’s number of years on the market. Then there’s the rather racy Blockchain inspired design of the blue calfskin leather strap which is lined with black rubber.

As with most things in life, timing was crucial. “It was really the right moment for us as a brand. I believe this technology has a future, not only in our business but in many other businesses,” says Guadalupe, who since joining in 2004 has witnessed Hublot enjoying a meteoric ascent from a timekeeping annotation to a principal powerhouse.

“When I started in 2004 with Mr Jean-Claude Biver who is our Chairman today [and recently stepped down as president of the LVMH Watch Division], it was like starting with a brand that was a sleeping princess that we managed to wake up. If I look back, Hublot has been one of the success stories of the beginning of the century,” says Guadalupe in a manner that is more matter-of-fact than cavalier.

Holding value

For decades, watches have been symbols of luxury, wealth and personal taste. But ascertaining their investment potential can be as byzantine as the intricate machinery that runs them. So, what happens when a volatile cryptocurrency like Bitcoin joins the equation?

“Every transaction is made the moment you do it – the currency is calculated at that exact time: the watch is $25,000 and the moment you sell the watch you fix the amount in Bitcoins.

At Hublot we don’t have these problems of volatility when selling the watches because we manage it. Talking about volatility, you can have wild swings in the Stock Exchange – look at what happened in 2008 – so this can happen in any market, even in different currencies. With the Swiss Franc and the Euro we had 20 percent volatility in one day, so this can happen anywhere. It’s all about managing it. We fix the price and when we get the currency, we exchange it, so you have a very small window of volatility.”

But what about for the consumer? Given its exclusivity and the fact that it sold out before it even came to market, it seems safe to assume that the 210 buyers – constituting a healthy mix of crypto fans and Hublot devotees – are sitting pretty.

Hublot Big Bang Meca-10 P2P is a rebel compared to the usual mass-produced pieces; as such the resale price is predicted to be high – or at least stable – because of the very limited quantity of watches in the market. It’s also worth considering that watches that are re-sold for enormous sums usually come with a story – a story that increases the value of already expensive watches accessible only to a happy few: ‘This watch was owned by Eric Clapton.’ ‘This was the first watch on Mars.’ ‘This was the first watch to have been sold by Bitcoin…’

What’s more, with its strict vetting process, achieving one of the coveted 210 spots was not a cakewalk. “We put all the prospective buyers – the interested parties – through an onboarding process to make sure we were comfortable from a Know Your Customer (KYC) and Anti-Money Laundering (AML) perspective,” Wayne Trench, the CEO of Asia’s leading digital asset brokerage, OSL tells us at the launch event that evening. “Yes, time was of the essence and we were very pleasantly surprised by the interest.”

A suitable launch

Taking place at Armani Privé 2/F, the hotel’s glamorous rooftop terrace, the who’s who of Hong Kong society along with crypto currency followers, Hublot enthusiasts and excited press are all present and accounted for and there is a tangible buzz in the air as Ricardo Guadalupe and then Wayne Trench take to the stage with none of the usual insouciance one has come to expect from the age of event fatigue. Because this, as Guadalupe told me earlier, is a big deal.

Somewhat surprisingly, given the idea was conceived in Hong Kong – “The team from Hong Kong came up with the concept. Here, of course it’s very advanced with this kind of technology” – less than 20 percent of these watches were actually sold to local buyers. “Even though OSL is based here, it’s totally international. We’ve had consumers from all over – America, Europe and The Middle East.”

Thriving on being a brand of firsts, the pioneering watch company was the first to integrate a luxury brand into the world of football as the official timekeeper of the 2008 Euro Championship and the official Fifa World Cup timekeeper at South Africa 2010, Brazil 2014 and Russia 2019. It has also established successful partnerships with nearly every other industry: motorsports, fashion, art, music, haute cuisine, hotels and resorts.

For Hublot, the seductive world of blockchain technology is both a natural progression and yet another way to be numero uno. “It’s a number of firsts,” reiterates Trench. “It’s Hublot’s first foray into e-commerce and they skipped fear and went straight to cryptocurrency. The delivery mechanism is a first for the watchmaker as well. For OSL, it’s the first big luxury brand that’s collaborated with us where we’ve taken part in such an exercise.”

And if those sales are anything to go by, the collaboration pves the way to many more innovative launches in future.

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