Watching the Dragon at Baselworld

It takes less than ten minutes through quintessentially scenic European streets and over the river Rhine for the Number 2 tram to take you from Basel rail station to the Baselworld fair venue. And as you alight from it your eyes are scanning for a “fair”.

Instead what you find is a city!

Image Credit: Official Baselworld website
http://www.baselworld.com/en-US/OnlineCatalogue/HallFloorPlans.aspx

Occupying 160,000 square meters spread across floors and levels in six massive buildings, the fair is mind boggling in size. It brings together practically the who’s who of the watch and branded jewellery industry under one roof.

Inside each of these buildings brands set up their own halls, with the location, size and décor a good indication of how they fit into the pecking order of luxury. So the main hall has a mix of independent and Swatch-owned prestigious brands like Rolex, Patek Philippe, Corum, Movado, Breguet, Blancpain and Omega together with a few of the “affordable” ones like Tissot, Balmain, Frederique Constantin, Seiko and Rado.

The halls are all impeccably and ornately constructed, often with floor to ceiling glass walls, elegant lighting and fronted by beefy guards in sharp suits and Secret Service-style ear mikes. Entry is restricted to those who have appointments or are likely trade buyers.

Some of the notable halls include Breitling (with a massive aquarium bang and center), Ulysse Nardin (built like a ship), Patek Philippe (with a walk-around “museum” of its enduring watches and movements around the hall) and de GRISOGONO.

The number of well-known brands starts tapering off gradually as you move to other floors and sharply and you move to the other buildings. Over 100,000 people are estimated to attend this event over the 8 days that it is on.

Prestigious no doubt as Baselworld may be, there are a few blue blooded brands that feel it caters mostly to the hoi polloi. Since 1991 a few of the most exclusive brands have been organizing their own smaller, yet more exclusive fair at Geneva called the SIHH. Most of these now belong to the Swiss-based Richemont group, like Vacheron Constantin, Piaget, Montblanc, Cartier and Baume & Mercier.

The Outlook, and the Dragon in the Room
Unlike 2011 when the mood was apparently much more subdued, this time the fair opened to much more confident forecasts and larger crowds. Swiss watch exports grew 19 percent in 2011 to reach $21 billion, powered largely by China (up 48 percent) and Asia (both Hong Kong and Singapore up by 28 percent). Asia for the first time also accounted for over half the value of Swiss exports.  

The rise of a China as a market is evident across brands of all shapes and sizes. “My first floor is like Chinatown right now!” said the head of Marketing of a Swatch-owned brand as he took me through his latest watches inside a ground floor room in his hall.

At the luxury end there was Jaquet Droz has an entire collection named “Majestic Beijing” besides unveiling two dragon-themed watches, the Petite Heure Minute Dragon and the Petite Heure Minute Relief Dragon.

 

(Left) Jaquet Droz Petite Heure Minute Dragon ; (Right)  Jaquet Droz Petite Heure Minute Relief Dragon
The brand also heavily emphasizes the importance of China in its early history, when its products were one of the earliest to be imported and traded during the Qing dynasty during the 18th century.

Laurent Ferrier, a promising young brand all of two years old, unveiled the Galet Secret – an ingenious and beautiful watch with a patented complication that opens a “secret” dial by rotating two fan-like opaque sapphire crystals, thus revealing a painted dragon.

Why the dragon theme? Because according to the Chinese astrological calendar, 2012 is the Year of the Dragon!

With the Chinese market accounting for more and more of the sales for most watch brands, I suspect we’ll see many more dragons before the year is done.

Cracking the Chinese market is no piece of cake either, from what the CEO of a very exclusive and well known brand told me. Though they sell a lot of watches in China they don’t make much money because of a tax rate of nearly 25 percent. Yet they have continued investing in China, including in single-brand boutique stores in order to brand themselves in the eyes of rich Chinese globetrotters and diaspora.

The results of this strategy are sometimes visible very far away. Like one of the brands best performing stores in California, USA the majority customers of which are of Chinese-origin.