‘India, market of the future’
Jean Claude Biver, CEO of TAG Heuer and Head of Watch Division, LVMH on plans for TAG Heuer, its ambassadors and why steel is material of the past in a chat with Mitrajit Bhattacharya
I met you in 2005 in the new Hublot office when you spoke about what Hublot stood for, fusion and stuff like that. We know what you did for Hublot. I just want to understand what does TAG Heuer stand for you and how do you see it five years down the line?
TAG Heuer has a very long history. Our statement is “Swiss avant-garde since 1860”. Fortunately or unfortunately, I cannot change this because when something that is 150 years old who am I, who will die, maybe in the coming 20 years to change the legacy of 150 years. I have no right to do that. We must reconnect TAG Heuer to its past, to its values. TAG Heuer has been a pioneer in time keeping. Invention of the one-hundredth of a second chronograph, invention of the one-thousandth, Olympic timekeeper 1932, Olympic timekeeper 1936, the first watch worn by the first American astronaut John Glenn, pioneer in Formula 1, first brand to invest and to become sponsor of the Formula 1 Ferrari, pilots wearing TAG Heuer and all that.
TAG Heuer was in skiing, in cycling and is connected to sports too. These are basic values that I have to respect and if some of these values have been undermined in the last 10 years, I need to bring them back. We need to add to these values elements that belong to the future. Like what? To take the simplest answer: the connected watch.
The connected watch is considered as avant-garde. Maybe in the coming 10 years it will not be so. You cannot claim to be an avant-garde and not have a connected watch. I must bring my contribution not just to protect these values but add to them too. I have added to this a new pillar, lifestyle. Because sports and lifestyle often match. People with lifestyle visit the Miami Basel Art. They like contemporary art, thy like music. Our next pillar is art. Then we can have sculpture. TAG Heuer has four pillars. We have sports, we have a lifestyle, we have art, and we have Swissness! We will have events, sponsorships, ambassadors or friend of the brands for each of these four pillars.
I want people to look for tomorrow. The people looking for tomorrow is the young generation. Meaning I have to rethink my events, my sponsorships because I am talking to a new generation. And importantly I also have to adapt the product. We are accessible, fashionable, and successful and have desirability. We sell our connected watch at $1500 and everybody wants to buy it. Nobody can get enough of it. That is what I call accessible luxury. We need to have products that are priced quite aggressively. That somebody cannot buy a watch that costs $1 million is normal. But when you cannot get a watch when you have the money, then you do get crazy. You say, I could have bought it but could not get it. That’s the concept of TAG Heuer.
Are you satisfied with what you have put in on the brand in the last one year?
I am more than satisfied. In fact, I am amazed as to how quickly my strategy has been implemented and how quickly the results are coming out. We have finished the year doing 2.5% better than last year. The Swiss exports have lost only 3% but have lost 3% compared to 2014, which is not a lot nevertheless it’s minus 3, and I am plus 2.5. So when you are minus 3 and you do plus 2.5, the difference is 5.5.
Just for the sake of my readers if you could categorize TAG Heuer, the category you fall in?
In Swiss export, we fall in the category of $1200 to $5000. This is our core business. This is where we want to be. Its leader, the market share leader. In certain points like $1200 to $2000, we even have 35% or 39% of the market.
You handled Hublot before TAG Heuer and have done which ideally would have suited TAG Heuer, more than Hublot, like going to soccer. Has Biver already beaten Biver?
I couldn’t agree more. The performance of a sportsman is to beat what he achieved last. If he doesn’t, then he goes down. Why is it so easy for me to handle TAG Heuer? Because it’ so close to Hublot. The past of Hublot and its success has guided and helped me a lot to improve and develop TAG Heuer. This is also why Valerie Servageon Grande, who was earlier Hublot’s marketing director is now the marketing manager of the watch division, She manages the whole thing and also helps me every day at TAG Heuer. Ricardo Guadalupe, CEO of Hublot, is in the product committee of TAG Heuer. He helps in the development of new materials for TAG Heuer, the new shapes and designs for TAG Heuer. If TAG Heuer wants to be avant-garde, it needs new materials. How can it continue to be avant-garde if it uses steel? Steel is from the time of Eiffel Tower, built in 1875. It’s a very old material. Somehow TAG should never do a steel watch because steel is lousy, stupid. It’s a metal of the last century – oh no, two centuries back. Now it’s titanium, ceramic and carbon.
How has been your experience working with the kind of new ambassadors who have joined in the past two years, like David Guetta?
Yes, very good. I believe that the ambassador must initially suit me and I must suit him too. There must be a chemical reaction between us. If we don’t have that we don’t go further. Secondly, the ambassador must be convinced that what he is going to represent belongs a little bit to him, both philosophically and at the product level. If he doesn’t like your watch, he will never wear it in private. He will only wear it when he is in business. Thirdly, he must be ready to involve himself as a real ambassador which means travelling with us business class and going to events. If he fulfils or agrees on these three conditions, then we start the contract. If you do that with every ambassador, you will never get the wrong one. David Guetta is fulfilling all the three conditions.
Being the most important watch CEOs in Switzerland I also see you as a representative of the watch industry worldwide. The world is really not going through the right time because you have a healing Chinese market, the oil prices are at all-time low, terrorist strikes are affecting major parts of Europe and other markets. Even the US and Japan are not really booming. What is your take for the luxury watch industry?
When the markets get difficult, some people will die in the difficulty. Some will disappear. Some will be bought over. When the market is difficult, the weak will suffer more than the strong. So if you belong to the strong, don’t be afraid of a weak market. It’s a great opportunity. Why? Because as I said before, when the market goes minus 3 and you grow plus 3, what’s the difference when you grow plus 3 and the market goes minus 3? The difference is 6. It’s the only time in your lifetime when 3 can be 6. So it’s an extraordinary opportunity and one needs to take advantage of that. Whoever is afraid, whoever doesn’t feel comfortable should leave. It’s a great opportunity to transform 3 into 6 or even worse. If the market goes minus 5 and you go plus 1, 1 becomes 6. I am hoping the market goes minus 5 for me. And the last element, when the mood is bad, when people are not ready to buy, what makes them buy? Innovation and creativity! Innovation and creativity will bring people and they will say: “Oh s**t, I saw this, wow. It’s great! I don’t want to spend money but this one I want to buy because that’s my first choice.” Innovation and creativity is the only way to go further,
What are your plans for India? How do you see the Indian market grow?
India is the future as we have always said. Is it a short-term future or is it a medium-term future or is it a long-term future? I believe it’s long-term. I don’t see a big difference in India but the medium term which is within 5 years India will be one of the most important countries for Swiss export. Because Indians have a culture, they have good taste, they love luxury, they love gold, they love jewellery, and they are educated. That’s exactly what you need in order to buy a Swiss luxury watch. If you have no education if you have no special taste, why should you buy a Swiss luxury watch? The Indian market is a perfect market for us, a market of the future.
