To combat the problem of counterfeiting and the loss of market share to the producers of fake watches, Rado of Switzerland has come up with a system where consumers can log on to the internet, enter their watch's serial number and reference number and learn whether the watch is real or a fake.
Roland Streule, president and CEO of Rado, spoke exclusively to Emirates Business about the new system during the Dubai launch of Rado's latest timepiece. It has been introduced to mark the company's 50th anniversary as it was in 1957 that Rado offered its first collection to the public.
The guarantee of authenticity system will be up and running in two to three months time and will be the first system to be offered by a luxury watch maker.
Streule also spoke about the state of the industry and the market for luxury watches in the GCC.
Saudi Arabia and the UAE continue to hold their positions at the top destinations in the region for sales, but Streule noted that the global appetite for the timepieces is growing steadily.
How was your performance in 2007 and the first quarter of 2008?
We had an excellent year in 2007 considering the growth would have been better if we were able to meet the demand. Demand has been much higher than the supply to the market. There was general shortage in the Swiss watches industry due to high demand in the past few years. We had an excellent start and April, in particular, was tremendous. All our new products have found keen interest at the Basel Fair in April, and this is a good sign for the rest of the year.
How would you describe competition within the Swiss watches industry?
In the Swiss watches industry, as far as Rado is concerned, we have competition in the price category. There are brands that are competing in the same price category. But if we talk about the image of the brand, the product, the communication, the materials we are using, I think we are unique even if some other brands are using the same materials such as high-tech ceramic. We are the only brand exclusively concentrating on this, thus we are a global brand.
What about competition from other watch manufacturers in the United States, Europe and India?
Well, there are watch manufactures in Korea, China, Japan, India and some in France. But in our price segment and above, it is the Swiss watches industry that is dominating the market. The consumers want the prestige of a Swiss-made watch. It is more or the same like a car.
If you want a luxury car, the majority of them come from Germany.
Where does Rado rank in the global watches industry?
In our price category, we are certainly among the top five.
What is the range of your prices?
We start at about $600 (Dh2,202) and go up to $80,000. But our core range is somewhere between $1,500 and $3,500.
What is your market share in the global watch industry? And how many units do you produce?
There are no clear figures as most of the brands are close in term of figures, but there is no comprehensive information on the market share of watch manufacturers. However, we produce 500,000 pieces of Rado watches every year. We are in the segment of design pieces and we are the global leaders. The specialty of Rado is high-tech ceramic.
How much of the market for luxury watches is lost to counterfeit watches?
Counterfeit watches are like a disease. We are trying everything and making huge efforts on the level of the Swiss watches industry. We have had certain success, however, in many countries and especially the country of the origin of these watches – which is China – unfortunately the government has not taken efforts to stop counterfeiting. Dubai is very active in this regard and making efforts to solve this problem and we are thankful to the government for its help in fighting this problem.
What would you estimate is the quantitative damage caused by counterfeit watches to the watch industry?
We don't know how many pieces of counterfeit watches are produced, thus we don't know the damage it causes.
Who do you think are the consumers of counterfeit watches?
There are three categories of consumers of counterfeits. The first group buy counterfeit watches for fun, and this is wrong as they encourage the counterfeit business. The second are those who cannot afford buying the genuine watch, and buy the counterfeit watch with the hope that one day they will be able to buy the real one. And finally, the third category are those who buy the counterfeit without realising that it is fake. These consumers assume they bought the genuine watch, and this is the most dangerous one.
How is the market presence in the GCC for Rado?
We traditionally have a strong market presence in the GCC. Rado has been here for very long time and we are still very successful. The main reason for our success here is the after-sale service that we provide. It is very good here and is also very important.
In which countries in the region your sales are the highest?
Saudi Arabia and Dubai are the two strongest markets in the GCC.
And what are the new markets you are targeting in the future?
Globally, there are no new markets to target. However, we have tremendous growth in China, India, Brazil, Argentina, Russia, Azerbaijan and Vietnam. We are also re-targeting Indonesia as the population is increasing tremendously.
Profile: Roland Streule, President and Chief Executive of Rado
Streule joined Rado Company Limited about 30 years ago in 1978 as the regional marketing and sales manager for Middle East, Indian Subcontinent and Africa. He was promoted as president of Rado in 1989. Before joining Rado, he worked for a private label watch company.