For LVMH, being a global leader implies leading in India & China

French luxury maker LVMH’s (Moet Hennessy Louis Vuitton) watch and jewellery business in India is witnessing a double-digit growth, aided by brands like Tag Heuer, Dior and Zenith. Franck Dardenne, general manager, LVMH Watch & Jewellery for Indian Subcontinent (Pakistan, Bangladesh and Sri Lanka), in an interview with Shailaja Sharma says the company is looking for leadership position in India and China over the next decade. Excerpts:

Can you give us an overview of the performance of LVMH Watch & Jewellery business in India, especially since consumers are now exposed to numerous newer brands, in both fashion and luxury watch segments.
LVMH Watch & Jewellery has registered a more than steady double-digit growth. Dior watches has proved that it is definitively the reference in the luxury fashion watch industry. Since Zenith’s launch in India in 2009, the brand has multiplied its sales several times last year compared to the previous year; moreover, its desirability has increased significantly. On Tag Heuer, the growth has been much bigger than the market. Tag Heuer’s marketshare gain makes that possible. From being the third player within luxury watch brands, Tag Heuer is on the way to become the second, and it is the first in terms of appeal among young affluent men.

What price point works best for you in India? Also, which is the best performing watch brand in your portfolio currently?
Statistically speaking, Swiss watch brands are very well balanced; in value, 28% of the market is below `0.7 lakh, 34% between `0.7 lakh and 7 lakh, and 38% above that. In the case of Tag Heuer, the strong imagery of the brand enables it to be selling from `5,000 lakh to `50 lakh. But best price point is between `2.5-3 lakh. The best-selling watches are the Tag Heuer Carrera Day Date Chronograph, even more the Tag Heuer Carrera Chronograph Calibre 1887, and steel and gold watches. Zenith watches on an average sell for around `5 lakh, and Dior watches for around `3- 4 lakh.

What is the ambition of the group with jewellery in India? How much opportunity do you see there?
Things are under study. For long, the Indian jewellery market was not a branded one, then the local brands developed. Customers are becoming more and more global; Indians travel a lot and know precisely what is appealing abroad. Now, the demand is higher for major jewellery brands, of which comes first an LVMH brand like Bulgari. For the moment, let the desirability keep on increasing.

What do you think of the Indian consumer? How much does he understand luxury and how much is he willing to spend on a watch, piece of designer jewellery?
Indian consumers have the double aspect of a strong luxury culture and a strong sensitivity to prices. An age-old taste for luxury, a love for life, a strong culture of beautiful things makes the customers demanding; they want to receive an object which is worth the price. This is also a chance for us. Zenith offers watches of a genuine manufacture at an incomparable good price. Tag Heuer’s timepieces are defined by having the best value for money, even on some products for which prices are very high. Dior watches illustrate more of a fashion trend to shine, with best-selling products recently being the most expensive.

Since you also cover Bangladesh, Pakistan and Sri Lanka, can you tell us how is the demand or growth potential there for your company? Any differences in the consumer behaviour in these markets?
Strangely, successful products are almost the same all over the world, and are the same from Sri Lanka to Pakistan. The main exception I can think of, in the case of Tag Heuer, is that the Link series is more niche here than in some other countries like the UK or Japan. I don’t think customers don’t like it; Shah Rukh Khan, for example, had chosen it when he was a teenager, before the launch of Tag Heuer in India! But there is a lack of awareness; we probably did not have time to make it known.

What expectations does the parent company have from your division in India, how much can you grow the business here?
Our brands expect a lot from the Indian market; we are global leaders and want to remain such. Being a global leader tomorrow, in 10 years, will imply being a leader in India and in China. That is why India is a strategic priority for us. But it will remain such if here, in India, we go on proving that we deliver and maintain multiplying the sales over the next 3 years.

Do you feel the need for additional brands in your watches portfolio here?
We cover the whole spectrum of the luxury market; our 3 brands, with their very clear territory, register a strong growth, and a growth bigger than the market. The demand is also increasing a lot for Bulgari, for Hublot. But our discipline is to make sure to strengthen first at comparable perimeter, to grow steadily but organically.