'We are still at the beginning of expansion in India': Jean-Marc Pontroué, CEO of watch making giant Panerai

Panerai, the luxury watchmaker that blends Italian design with Swiss technology, recently opened its third and largest boutique in India, in Mumbai. Another one is likely to open in Bengaluru soon. Jean-Marc Pontroué, CEO of Panerai, in a free-flowing conversation with Business Today, talks about why Panerai will not manufacture diamond watches, how smartwatches are a disruptor but in a good way, and a lot more. Edited excerpts:

How important is India as a market for Panerai? 

For us it [India] is one of the fastest-growing markets. We are still at the beginning of expansion in India. It’s still a business that is polarised between Delhi and Mumbai. But over the next decade, it will be one of the most promising markets for the luxury industry in general, and for watches in particular. Panerai has been present in India for many years now. We started with a boutique in a hotel some 13 years ago. We will continue to expand our retail footprint in key cities in India in the future. 

 
Will you be looking at multi-brand outlets? 

Multi-brand is one of the potential facets of our expansion. It’s not like we are purely in a mono-brand development scenario. We, however, believe that it is in key cities like Delhi, Mumbai, and Bengaluru, that our customers can best experience the brand’s boutiques.

Going forward, in terms of strategy, will you continue to focus on the US and Europe or will Asia play a more important role?

The US remains the number one market for Panerai. But we have a good balance between Asia, Europe, and the Middle East. The brand has a strong position in some of these key markets. We are opening 45 new boutiques around the world this year. Our big flagship stores are called Casa Panerai. These are approximately 250 sq. m and spread over two floors. We are opening in New York, Milan, and Paris. We opened one in Sydney, another one in Amsterdam, and one in Taiwan. We will soon have another in Bengaluru. So it is not really that we are prioritising any one region. We are just tracking all these business opportunities geographically to make sure that Panerai is present wherever lovers of luxury watches are living or travelling to.

Do you feel that smartwatches are a disruptor for the luxury watch market?

Smartwatches are a great product and I’m not one of those in the watch industry who are afraid of such devices. Smartwatches are encouraging people to wear watches. Half of the people in the world don’t wear watches. So, first, it is telling people that wearing watches is natural. Second, it’s not the same business. It can have some influence on what we do for sure. Because you have only two wrists, you cannot wear hundreds of watches. I’m a big fan of it because it has been a disruptor in our industry. It has led the new generation to realise that wearing watches could be a good way to get information about your health, performance, news, etc. But that is a functional business, while ours is an aspirational business. Panerai is about passing on your watch to your kids. It’s an investment. A smartwatch lasts for two or three years and is then replaced. It’s a consumable, one that you use and throw. We are not in that business.

Do you feel that watches are still a sound investment?

We have 28 models with retail price higher than the original price. We developed a model for a charity auction where the estimated price was between 60,000 and 180,000 Swiss francs but was bought by a Taiwanese collector for 355,000 Swiss francs. For us, it was important because it shows the desirability of the brand.

Panerai has been traditionally about men’s watches but now there are a lot of unisex watches. Will we have a specific range for women? 

Men remain 75-80% of our customers, but we now see a growing number of women wearing big watches. The 38 mm dial in different colours and with coloured straps is a growing point of interest. Over the last few years, an increasing number of women are buying our watches, even though the brand is extremely ‘masculine’. We don’t want to change the positioning and the messaging of the brand. We will not make diamond watches. I know India is a big market for stone watches. But we won’t do so.   

Nearly all global luxury watch brands happen to be European. Would you expect any new watch brand to come up from any other parts of the world?

You know, I never say never, ever. Nobody would have expected that disruption would come from the US when it came to smartwatches. So, you never are protected from being sure that everything will continue to come from Switzerland. By the way, only 3% of watches come from Switzerland. 97% are of non-Swiss origin. The value is, however, 80% Swiss. Customers buy a slice of history. They have been buying our storytelling since the 1860s. It’s very hard to be taken seriously in the higher-end watch segment if you don’t have at least 100 years, 200 years, or 300 years of history. And that’s what is perhaps protecting our business from new arrivals compared 
to other fashion accessories. 
          
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