As India’s appetite for luxury watches grows—importing as many as ₹1,620 crore worth Swiss timepieces in the first eight months of the year—brands like Panerai are racing against time—quite literally—to tap into the market’s potential. But it’s not just about launching boutiques; it’s also about navigating taxes and finding suitable real estate. Jean-Marc Pontroué, chief executive officer (CEO) of Panerai, who is on a visit to India, spoke to Mint, and said he sees the country as a promising market for luxury timepieces, by 2030, making it to its top 10 countries or even top five, as trade agreements and luxury infrastructure evolve.
The recent India-European Free Trade Association (EFTA) agreement, signed in March 2024, aims to reduce taxes on luxury Swiss watches in India over the next eight years, possibly bringing them down to zero. “This will allow Indians to buy luxury watches domestically at more affordable prices,” Pontroué said. The current import tax, including a high “sin tax” GST, adds up to roughly 30%. To offset this burden, the company, he said, has already cut margins to maintain price parity with other markets.
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Since entering the Indian market in 2008, Panerai has had a measured growth with local partners owning its boutiques. The brand’s first store—through its partner—opened in Mumbai in 2012, followed by another one in Delhi in 2018 and, more recently, another boutique at Mumbai’s Jio World Plaza in 2023. With plans to launch a fourth in Bengaluru by October 2024. “We see double-digit growth from the India market and also the addition of new customers who are Indians around the world when they go shopping,” Pontroué said.
But he pointed out that the luxury shopping infrastructure and real estate options in India need to improve to support further growth and that may take some time.
‘Larger dials, not following the trend’
Panerai’s approach is divergent from general market trends, he said, and its watches sell for €10,000 (around ₹9.2 lakh) on an average. He’s dismissive of any big threat from digital watches, even though Apple sold about 38 million units of its watch as opposed to the 16 million the Swiss watch industry sold.
“The global trends favour digital and quartz watches. But we don’t follow trends. If the trend is digital or pink quartz watches, we won’t make them. We don’t follow the trends. We make larger dials and did so even when we first began,” he said. “In fact, digital watches are a complementary market that could one day convert a fraction of users to luxury timepieces. I’m happy digital watches are successful because they make people used to wearing something on their wrists. Perhaps one day, 0.001% of these people will wear our watches. Half the world doesn’t wear a watch, so this only grows the market,” he added.
The company has a history of watchmaking since 1860 for the Royal Italian Navy and started retailing in the 1930s.
Promising market in India
While India is not yet among Panerai’s top 10 markets, Pontroué is still optimistic. For years, luxury watch brands have eyed India as a promising market despite modest sales volumes compared to global figures. But as China’s luxury market, the largest in the world, experiences a downturn—leading to losses as high as $200 billion—India’s potential has risen.
The brand continues to expand its footprint with 10 points of sale and four boutique partners, including Ethos Ltd and Kapoor Watch Co. “In Richemont’s watch division, Panerai is number one in India. We are the leaders here, and the country has been growing in stable double digits for us for some years.”
Pontroué said the company’s focus on other major markets like the US, which makes up a significant share of its global business, will also help mitigate any global risks from geo-political events. “Very few brands are successful both in China and the US. We’ve never been strong in China, so the current crisis there hasn’t affected us much,” he said.
Richemont, which doesn’t give a company wise break up of its earnings, said for the quarter ended June 2024, “all regions delivered growth except for Asia Pacific where sales contracted by 18%, as higher sales in South Korea and Malaysia only partially mitigated a 27% decline in China, Hong Kong and Macau combined.” Specialty watches also saw a de-growth of 13% at €911 million versus the €1,061 million for the same period last year.
Three business areas
Richemont operates in three business areas: Jewellery, owning companies like Buccellati, Cartier and Van Cleef & Arpels. It has specialist watchmakers like A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget etc. It also has a Fashion & Accessories vertical, with brands like Chloé, Delvaux, Dunhill, etc.
“Japan’s noteworthy (watch) performance only partially offset lower sales in Europe and Asia Pacific, particularly in China, Hong Kong and Macau combined,” it added.
