In an interview held in Tokyo Norio Takeuchi, Managing Director, Citizen Watches, tells Mitrajt Bhattacharya about hundred years of Citizen, focussing on luxury mechanical watches and future of smartwatches.
Being a multi-brand organisation with Citizen, Bulova, Frederique Constant, Alpina, Arnold & Son and Campanola, what strategy do you follow in portfolio management? Is it akin to the Swatch group or Richemont?
We are a bit more like Swatch. However, the way Swatch pursues synergy is different from how we do it. We are obviously looking at optimisation of all brands across the board; in the way that we think is fit. We pursue the synergy in our own Citizen style.
You have been in the mid-priced market of $300 to $1200 but since 2012 you have started incorporating luxury mechanical watches in your collection. So, now you are doing watches from $200 to $4000. How do you see that perception changing among your clients across the globe, including the newer ones?
We are a multi-brand company and believe that it’s about respecting individual unique qualities that each brand offers. We are now within $200 to $4000 but the brands continue to maintain their identity and operate within their price range. In simple words, Citizen will continue to operate in a similar price bracket. We do have a big price range to cover and believe that different brands satisfy the needs of different segments.
Citizen has introduced new timepieces to mark its 100-year milestone. Can we look forward to you recreating some important historical watches?
We do have some 100th-year models to celebrate our 100th anniversary. Although we are proud of the legacy we have created over the years, we are not looking back. As you are aware we have announced some 100th anniversary watches but that wouldn’t be the only main products that we would be featuring. Unlike the Swiss brands that attach great value to the past, we are about the future.
As you celebrate 100 years we would like to know your plans for the next 10 years.
Fast-paced changes are happening all around the world. Technology is undergoing change, people are changing, and so are their lifestyles. We are unable to project what is likely to happen. But we can confidently say that in 10 years watches will be more attractive, more appealing. And, with the introduction of the 0100 calibre this year it’s about finding the new frontier of watchmaking with the annual accuracy of plus or minus 1 second. That’s the new door we have opened now and we will be opening many such doors over the next 10 years.
What would be the strategies of integration with brands like Bulova, Frederique Constant, Alpina, Arnold & Son, both at the manufacturing level and the distribution level?
We have started integrating distribution first where we actually combine the areas to optimise because each brand has its strengths and weaknesses in different markets and consumer segments. We can optimise by combining these areas as a whole. One success story that we have already achieved is in the United States where we joined up with Bulova. We were always strong as a mid-range product and by joining up with Bulova we have made it even stronger.
Can you elaborate on what you have done in the United States with Bulova?
Citizen has a certain relationship with the distributors in the United States where Bulova didn’t exist. We used our relationship with our distributors and introduced the Bulova products in a sort of test market. They sold very well and as a result, competitors of Bulova were moved out of that distribution. Then there was the reverse case where Bulova was quite strong in luxury department stores where Citizen didn’t have a presence. Based on that relationship we were able to enter that area as well.
It’s not so much about manufacturing synergies but I think its more to do with technical development. Starting from day 1 of the acquisition we have always talked about technical exchanges, integration and sharing of best practices. We have engineers going across to different markets to learn from each other. Some new products that will be coming from Bulova will be based on the Citizen technology. The Citizen movements have been introduced allowing them to create new products. It’s a very positive sign.
How do you see the Citizen Watch Company growing within the larger group?
I think the watch being the core part of our business we do have a view to grow our other business segments as well. For example, our business of machines- which actually create the watches- is showing a great growth as well. That’s actually coming from our watchmaking technologies that we have developed over the years. We will do the same with other segments as well.
What are your views about smartwatch technology?
Smartwatches have brought back the trend of people putting something on their wrist. There were people who weren’t wearing wrist watches at all. As a traditional watch manufacturer, we think this is a business opportunity, a positive trend. Apple watch is the common thing and many young people wear Apple watches today but they all look the same. Apple watches have the exact same face. I think there will be a trend where people will start to look for other options of what smartwatches can be. That is an opportunity for us to showcase our watches as well as the Citizen smartwatches that we have.
With the share of smartwatches increasing in the coming five years what do you foresee for the traditional watchmakers? What strategies do you plan to counter the technological shift?
I think the traditional watchmakers have their own strategies that they will pursue. With the introduction of the 0100 calibre this year at Baselworld, we have showcased our commitment to traditional watchmaking values. In other words, it’s about mechanical watches. I think we will continue to pursue that but at the same time we do have our smartwatches. It has the capability and functionalities of smartwatch but with the beauty of an analogue watch. That’s the key feature we are showcasing and we will evolve this concept going forward.
Brands like Tissot, Longines, Omega, TAG Heuer, the ones which are closer to Citizen in terms of brand personalities are very active in the area of timekeeping and sponsorships. Do we see Citizen increase their involvement in sponsorships and timekeeping beyond the US Open in the near future?
Yes, we do understand timekeeping in sports. It’s sort of an integrated relationship that we have. But I won’t be able to say that we are going to be more active in the future in this space. We already have quite an extensive range of sponsorship relationships starting with the US Open that you mentioned but also figure skating, marathon, and rugby in Japan. However, if an attractive opportunity presents itself we will consider that keenly.
Citizen is more and more focusing on Eco-Drive movements than quartz where actually the volumes are lower compared to the quartz market. What is the reason for doing so?
Eco-Drive is officially and as a matter of fact a core part of our offering and a key part of our technology. It is also a great source of profit and that’s why it makes sense for us to focus on the Eco-Drive.