The French luxury group LVMH (LVMH) announced on Friday that it will build a new luxury Maison Fenty with the pop-singer Rihanna. It will include ready-to-wear, shoes and accessories and the debut is during this spring-season in Paris.
Hublot CEO Ricardo Guadalupe says that he expects the company to grow double digit, that is about 10-11 %, this year, well above the average luxury watch industry. Speaking to ComteamPUB+ he says that this year also the Chinese consumers will be the first big customer segment for this Swiss Luxury Watchmaker.
– This year will be very unique for Hublot. Our growth estimate is double digit that is 10-11 %, which is well above the 5-6 % average growth rate in the luxury watch industry this year. This year is also the first year for Chinese consumers to be ranked the number one. Our biggest growth is coming from the Greater China area, he says to ComteamPUB+.
Hublot, part of the LVMH Group (MC:FP), is having 8 different brand stores in China and totally 18 in Greater China and the company is planning to open new stores globally so that the total stores would be around 100 in the next couple of years. This week the new opening is in Genf, Switzerland and in June they will open a new brand store in London, in the Old Bond Street.
-We want that our customers can experience the Hublot brand when they are travelling. So this is also important that the store locations are fitting our targets. We also want to demonstrate our strong brand, he explains.
Digital transformation in the focus
Digital transformation is in the focus of luxury watch industry nowadays. Companies are building different customer experiences in the internet with storytelling and strong social media channels. For example Hublot is having 2,9 million Instagram followers and in Facebook they are having 4,1 million followers.
-Digital transformation is shaping our industry. For example Hublot is having now 50 % of its advertising costs in digital channels compared to other media channels. And we are planning to build our own e-commerce platform in the couple of years. We want Hublot digital boutiques to offer a new Brand experience to our worldwide customers, he adds.
This e-commerce has been very difficult with the luxury watch industry because of the pricing and brand value. For example another Swiss luxury watch company, Richemont, has decided to buy back their luxury watches from external dealers. This has caused the company 200 million euros profit fall according to the Financial Times.
Mr Guadalupe sees the market differently and says that Hublot would not have to do the same thing than Richemond.
-We know our customers and we track the watches we sell. Hublot has no stock while our production is in line with the demand, he explains.
Hublot´s annual production is about 50.000 units, price range from 6000 – 50.000 euros each and the production site is in Nyon, Switzerland. The average price is 20 000 euros according to the company.
The first smartwatch, Hublot Big Bang Referee
During the BaselWorld2018 Hublot also launched its first smartwatch, operating with Android. This luxury smartwatch is part of the company partnerships with FIFA World Cup now in June in Russia.
-We are thrilled with the feedback from this watch, Hublot Big Bang Referee FIFA World Cup Russia 2018. This is really the first smartwatch for us and it is also seen as the first marketing tool for our FIFA partnership. We have invited about 1000 stakeholders in our FIFA events and we are looking forward for this big event, Mr Guadalupe comments.
The luxury smartwatch industry is very diversified. Apple Watch is the market dominant, but other luxury watchmakers like Louis Vuitton, Hermes and Tag Heuer are also in the markets with their smartwatches. In the LVMH Group, the development of the smartwatches, is being taken care of the internal development unit.This is also the way the Group can have efficient R&D expenditures.
It is estimated that the global smartwatch sales would exceed 141 million units this year, while the estimates for the last year were 75 million units. In 2016 the sales were 38 million units.
Hublot was the first luxury brand to invest in football and has partnered with football for over 10 years and the company has different brand ambassadors like Pele, Usain Bolt, Dwyane Wade, Justin Rose, Dustin Johnson and Lang Lang.
The company has worked with the luxury car manufacturer Ferrari for many years and according to Mr Guadalupe some kind of connected smartwatch with Ferrari might be one option in the future.. The autonomous, connected cars can have also new innovations for smartwatches.
-When we work with smartwatches, it is good to remember that it is totally different market compared to mechanical watches, which is our core business. But working with wearables we want to show the innovative, unique and piece of art work in our products, he says.
The launched Hublot Big Bang Referee smartwatch enable users to take part in the FIFA game by sending them notifications and live score updates.The company says they have produced 2000 units of this watch so far.
Hublot and sustainability
As part of the LVMH Group, Hublot has also developed tools to track for example the raw materials in the luxury watches. Sustainability is becoming more common and part of the luxury watch industry processes more.
-We use different raw materials like gold, diamonds and titanium in our products. Sustainability means for us that we track the sourcing of the materials as good as possible and want to expand that analysing and recycling also in the future, he explains.
Quality, passion and details
But what does the CEO do at home?
-I am a football fan and therefore it is a pleasure for me to work in collaboration with FIFA. This is a third World Cup for me. And when I am at home, I like to cook. Gastronomy is my hobby as well You know: it is like watch making: quality, passion and details, he says.
© Päivi Härkönen, ComteamPUB+