How crowdfunding put a new face on Swiss watch brand Dubois et fils
Who could have imagined Switzerland's oldest watch factory attempting a novel and very modern method of raising capital? And yet the move was a hit.
When Swiss watch company DuBois et fils launched its first crowdfunding campaign in 2013, it appeared to be the most unlikely of matches. Who could have imagined Switzerland's oldest watch factory attempting a novel and very modern method of raising capital? And yet the move was a hit, gaining the heritage brand 600 investors from 21 countries in five months.
In June, DuBois made the same offer again, with 99 shares made publicly available to horology fans looking to take part in shaping the brand's future. The move was an unusual one in an industry often characterised by conservatism and heritage rather than modernity and new ideas.
DuBois et fils' success highlights the potential rewards that high-end labels can reap when balancing democratisation and exclusivity.
Crowdfunding is not a revolutionary concept. Yet the trend has had a tepid response in the luxury sphere, with many fearing the concept dilutes brand image and exclusivity.
For the many small and medium-sized labels looking to stand out in an increasingly competitive landscape, crowdfunding is an attractive option. Juggernaut labels have dominated the industry, but the proliferation of the internet is helping underdogs to level the playing field.
DuBois et fils was officially established in 1785, when Philippe Dubois asked his three sons to join the family's pocket watch business in the Swiss watchmaking municipality of Le Locle. In an effort to make the brand more relevant, the company underwent a profound restructuring before making its crowdfunding debut.
"Luxury means limited availability," says Thomas Steinemann, the company's CEO who was keen to restrict shares to a small number of investors. "This is why the opportunity of becoming a shareholder of the oldest Swiss watch factory is highly limited. It must remain something special."
As part of its expansion, DuBois et fils has also collaborated with Alta Classe Global, the Hong Kong corporation that will distribute the its watches in the Asia-Pacific region. "DuBois et fils' equity funding was a great success and is unique around the globe for three reasons," says Mahesh Harilela, CEO of Alta Classe Global. "First, you need to be ready to be very transparent. DuBois et fils is an open book in financials, project presentation and business projection.
"Second, you need a face. Investors want to see the person behind the equity funding; what his history is like and how personally involved he is financially. The third element is passion: people want to invest more in companies and brands where they can have a closer relationship. This way investors feel like a part of the DuBois et fils family."
Another key player that pursued the crowdfunding option is Swedish fashion label Carin Wester. Through online platform FundedByMe, the brand was able to raise €110,000 (HK$937,000) in seven hours. Like DuBois et fils, Carin Wester eschewed the traditional route of courting investors and venture capitalists in favour of a more democratic path.
"The secret of the crowdfunding campaign by Carin Wester lies in their perfect preparation," says Daniel Daboczy, CEO and co-founder of FundedByMe.
The brand treated its crowdfunding initiative as a marketing campaign, building tension in social media and generating hype to attract the capital they needed.
The appeal of this approach is obvious: the corporate transparency needed for crowdfunding campaigns appeals to customers who demand desirable goods and want companies to work in ethical and sustainable models. For a brand such as Carin Wester, the democratic ideals of crowdfunding fit seamlessly with Scandinavia's egalitarian values.
Investing also provides a deeper level of participation in a company. By supporting a brand not only as a loyal customer but also as an investor, you become part of a club united by a common goal.
"Consumers are changing their consumption habits and want a unique identity. We see maturity developing where the investor, partner and customer can simultaneously have a connection to history, take pride in ownership and feel part of a community," says Harilela.
Despite the early success of Carin Wester's campaign, it failed to secure the final target figure of €435,000.