Vacheron Constantin expands production to meet Asia demand
Richemont's prestigious watchmaker will continue to widen its reach in China with new stores in both first- and second-tier cities
Luxury watchmaker Vacheron Constantin plans to increase manufacturing capacity at its plant in Geneva to meet demand spurred by growing affluence in Asia, according to the company's chief.
In an interview with the South China Morning Post, Juan-Carlos Torres, chief executive since 2005, said Vacheron would continue to expand on the mainland by opening new stores in both first- and second-tier cities, following the successful launch of the brand's Shanghai showroom in 2008. The boutique not only sells and displays products, but also stores and maintains timepieces for customers.
"We are going to double our workforce and increase production capacity at home [Geneva] from 20,000 [timepieces] a year to 30,000 by 2015," Torres said.
He added that the demand from customers in Asia had swiftly expanded on the back of the buoyant Asian economic outlook.
Torres acknowledged that the bold expansion in production would have to go hand in hand with improvements in technology and distribution, otherwise the 257-year-old watchmaker could struggle to uphold the high quality of its timepieces.
Vacheron, the oldest brand in the Richemont stable, plans to spend more than US$100 million from now until 2020, reflecting its commitment to maintaining quality and tradition.
"After conveying the core message to the Chinese customers, they become more educated and begin to value watchmaking in terms of art, craftsmanship and design," said Torres, who expressed interest in opening boutiques in second-tier cities after a runaway success in the Shanghai flagship store.
The watchmaker said it would continue to attract customers from other cities to Shanghai, which serves as the gateway to China, while growth in second-tier cities is expected to be robust.
"The appeal to Chinese customers comes from our heritage and classic image. Customers prefer a pragmatic style over a showy brand," Torres said. Men account for 75 per cent of mainland clientele.
Torres declined to comment on the expected number of outlets in China, but said mainland revenue-per-store was higher than in Hong Kong and Macau.
Torres described Hong Kong, as the "window of Asia", because he said distribution channels were better established than in cities such as Singapore.
"The boutique concept was first introduced to Hong Kong, which has been [a] blockbuster [success]," he said, adding a well-trained sales force can also better educate customers.
"Apart from better distribution, factors like more active connoisseurs and collectors helped Hong Kong surpass Singapore as the No1 destination in the region for our business," he added.
Time will tell in China.