Niche product: Pakistan important market for Ulysse Nardin, CEO

Hoffman says sophisticated clientele wants luxury timepieces, future lies in Asia.

KARACHI:

Who can forget the intense media frenzy that followed the newly elected Prime Minister Nawaz Sharif appearing in parliament in June last year while flashing his expensive, glitzy wristwatch?

Most pundits thought wearing a Louis Moinet, costing around $4.6 million, ill-behoved of a prime minister of a country whose per-capita GDP is only $1,257 (2012). After all, only a handful of Pakistanis could afford such a luxury, they contended.

Indeed, ultra-rich Pakistanis are a tiny minority. But evidence suggests they make a clientele that is sizeable enough to lure expensive Swiss watchmakers into Pakistan that is otherwise categorised as a lower middle income country by the World Bank.

According to the CEO of Ulysse Nardin – a Swiss brand that exports wristwatches to countries in all the continents of the world – the company is going to expand its presence in Pakistan because its timepieces have consistently sold in good quantities over the last six years.

“Even though Pakistan’s per-capita income is very low, there are still a lot of affluent watch connoisseurs here,” Ulysse Nardin CEO Patrik P Hoffmann told The Express Tribune during his recent visit to Pakistan.



Ulysse Nardin, which is one of the only four privately-held Swiss watchmakers, sells about 25,000 pieces worldwide every year. Going by Pakistani standards, Ulysse Nardin timepieces are arguably expensive. For example, the retail price of a Ulysse Nardin wristwatch currently on sale at an outlet located in the upscale Dolmen Mall in Clifton is Rs2.4 million.

According to the company’s local partner, the cheapest Ulysse Nardin wristwatch costs anything north of Rs200,000. There is no upper cap, they say, as the retail price of some of Ulysse Nardin timepieces can be extremely high.

“When we talk about expansion, we don’t mean thousands of pieces. We’re a niche brand. So our target market is restricted,” Hoffmann noted.

So what exactly is the Swiss watchmaker looking at in terms of annual number of units sold? Hoffmann says selling “a few hundred pieces” annually is a lot for a market like Pakistan given the price range of Ulysse Nardin.

“Pakistan is an important market for us. Pakistani clientele is sophisticated. They understand our timepiece is not just a fashion brand but also a niche brand. You need consumers who appreciate and enjoy what it takes to produce a timepiece like this,” Hoffmann says.

Ulysse Nardin timepieces sell at two outlets in Karachi and one outlet in Lahore and Islamabad each. Its collaboration with another Islamabad outlet is currently being planned.

According to official data released by the Swiss watch industry, total exports of timepieces to Asia during the January-March quarter increased 3.6% on a year-on-year basis. However, the increase was primarily driven by the surge in exports to the Middle Eastern (5.8%) and Far-Eastern (5.3%) countries.

Exports of Swiss watches to other Asian countries, including Pakistan, declined 7.6% over the same period, data shows.

“No doubt we have had a decline (in growth) in some Asian countries like everybody else,” he said, quickly adding that high-value customers from these markets, particularly mainland China, now prefer to go to Switzerland for such purchases. “What you don’t see in exports statistics is the growth that we have had within Switzerland, which is amazing,” he noted.

Hoffmann says sales of Ulysse Nardin are almost equally divided among four regions – the Americas, Europe and the Middle East, Russia and ex-Soviet states, and Asia, including Pakistan, each contribute 25% in the total sales of Ulysse Nardin.

“It shows the kind of potential Pakistan has. I see growth in Pakistan, India and China. The future is going to be in these markets,” he said.

Published in The Express Tribune, May 2^nd, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.