Hublot Bats For India : The Ricardo Guadalupe interview
I had an opportunity to meet up with the CEO of Hublot during his visit to Mumbai to inaugurate, its first India flagship stores in association with Ethos. Following are the excerpts from the conversation that we had.
1.Hublot Sorai watch : (Save our Rhinos Africa and India) limited edition watch. The I in Sorai stands for India. Each watch is priced at USD 22000 to 23000. Only 100 pieces are available for sale. 10% of the sales proceeds will go towards the cause of protecting the Rhinos from becoming extinct. In addition, Hublot will create a big ad campaign to promote SORAI. Huge investment will involve hundreds of thousand global awareness initiatives.
2. Limited edition watches: The limited edition connected FIFA watch was sold in a few days of its announcement. For the brand image, the resale value of the limited edition watch needs to be high. If the price in the secondary market is low, it does not augur too well for the brand. To maintain a balance is a difficult and challenging task. I don’t consider myself to be a genius who knows everything. But deciding on the number of watches to be produced for a limited edition watch is tricky. To give you an example, the quantity of 100 pieces of Sorai watch is not sufficient. There is a demand for 1000 watches. Maybe we should have produced 500 watches instead of 100. In hindsight things always seem obvious. Based on my previous experience I can say that we are always intelligent after the event occurs than before.
The other option according to experts and luxury consultant is to keep the quantity low but increase the price. The experts always give their opinion after the event has taken place and not before. According to me it is better to be conservative and underestimate the demand rather than overestimate. In the latter case if we end up with unsold stocks, it would be embarrassing for the brand.
3. On standalone boutiques: We are doing standalone boutiques globally. The ownership may rest with the brand or with a local partner. In India our first boutique partner is Ethos. Wherever we have a strong partner, we go with him. When you are a strong brand, you are not selling just a watch but more than a watch, a philosophy. By creating an exclusive boutique, we create a brand universe and a unique consumer experience. In a multi brand environment, you are competing with 50 other brands for the consumer’s attention. It is difficult to express yourself in a multi brand store.
The future is standalone boutiques and multi brand stores with an exclusive corner with a dedicated space earmarked for Hublot.
The retailers who do not share our thinking will have to rethink their strategy.
4. E Commerce: Online business is like an offline multi brand store. You must have strong partners. In future we would like to work with strong online partners with credible platforms such as Mr. Porter for instance.
We need them to give the consumers a confidence that they are buying the right product at the right price. Product authenticity to us is of utmost importance. We will therefore create a strong online platform ourselves as well as partner with strong online players.
The watch business is a wholesale business. We have many retailers who have created an infrastructure by investing money. Brands like LV and Hermes are in the retail business with a B2C revenue model. The problem is pricing. B2C brands have a control on pricing to the end consumer. In wholesale business, a retailer can upset the apple cart by discounting. We have therefore decided to work with chosen partners who will respect the company’s pricing policy.
Discounts should be resorted to only in exceptional cases such as selling to friends or family. We have 800 points of sales. We have 100 boutiques today and these contribute 40% of our total business. The balance 700 contributes only 60%. The productivity is therefore very low. We therefore would like to reduce the number to 500 point of sales and eventually to 400.
5. Jewellery & watches : A retailer who sells jewellery & watches, the contribution from jewellery sales is 50%. The balance 50% comes from a number of brands. An interest of the jeweller is thus limited. He keeps watches to attract footfall and ultimately sell more jewellery where he earns more money.
Our focus is on retail partners who are committed to the brand, who have respect for the brand ( and don’t discount), believe in us and share our business philosophy.
6. The art of Fusion : Hublot specialises in the Art of Fusion. The brand has collaborated with celebrities from the field of sports, music, culinary arts and films. In China for example Hublot has appointed the famous pianist Lang Lang as their brand ambassador. In Europe they have worked with the pop group Depeche Mode and DJs. Music is a very good platform to communicate with our consumers. In the field of arts, tattoo artists and sculptors have had an association with Hublot. We have also collaborated with lifestyle brands such as Berluti. We are open to receiving proposals from Indian musicians for association.
7. Pre - owned watches is an interesting space. However, as a young brand Hublot is not in this space. Hublot was launched 40 years ago but has been active for the last 15 years. Pre owned watches is a specialized business. Specialized players such as Bucherer coming in this business in online space. We will work with strong, specialised and credible partners.
100th Hublot boutique will come up in Hong Kong in December 2019.
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