The Phnom Penh Post’s Ramady Moun recently caught up with Walter Von Kanel, the long-time president of Longines Watch, a member of Swiss Swatch Group, during the BaselWorld 2012 in Switzerland.

{jathumbnail}

Would you please give us a brief history of your company for readers in our region, especially in Cambodia where they don’t know much about Longines Watches?

This year will be our 180th anniversary. Auguste Agassiz started by making the watches himself. From 1867, we’ve made watches in a village called Saint-Imier and we are still there today. By far we are the biggest factory there. When I started in 1969, it was still a family business, and then it became a joint venture. Since 1984, we’ve been a proud member of SMH, which later became Swatch Group. We got big in the 1990s when there were not so many big companies in the market.

Last year, we became the number 4 or the number 5 Swiss Watch brand, bringing in close to US$1 billion.

Now for the luxury watch brands, where do you position Longines? Middle class? Top end or an average one?

For the watch industry, we think of a pyramid shape of prices versus volume. Breguet, Patek Phillippe are in the luxury segment, Longines and Rado are in the top range, Tissot is in the middle range and Swatch is an entry range price. OMEGA is almost a luxury segment.

Our company produces more than one million watches a year, between 6,000 to 7,000 pieces a day. From our experiences if things get tough like in 2008 and 2009, usually Longines and TISSOT suffer less because we have a very affordable price and we have a good ratio of price versus quality. We have the dominant position.

What do you foresee for product development in your company?

No major changes to the products. If you have a company with this kind of performance, with revenue close to US$1 billion, we don’t want to change our product policy. We will add the new models sometimes, like this year we have a new collection. We do not want to change our advertising campaign, but it is very important that we stay in our price segment. It is consistency, continuation and steady forecasting.

With the current economic crisis, how has the buying sentiment for luxury goods been affected?

There is no effect whatsoever right now on our sales. During 2008 and 2009, Longines moved forward in our price segment. According to our January and February 2012 figures, Greece sales are actually higher than 2011. The Swiss global export for January 2012 was 15 per cent higher than last year. We are in a very lucky brand, very lucky industry and very lucky group.

Where does the growth come from? EU?  North, South America? Africa or Asia?

We have 33 countries of own distributions. If we take last year’s figures, all countries contributed.

Remember that we sold our first watch in China in December 1867 and ... I myself went to China in 1971.

The greater China region [China, Hong Kong, Macau and Taiwan] combined made up over 50 per cent of total sales revenues. One third is EU, while North America is less than 10 per cent and the balance from rest of the world. South America is still very small percentage. Thank you, Far East!

You said over 50 per cent of the global sales are from the Far East. Are you concerned with copyright infringement in Asia?

Countries who have signed onto the World Trade Organisation have to respect its agreements. There are two battles here:

The first one is an abuse of the brand name – those who are putting Longines’ name on China-made watches. The second one is the copy of the design, as you can see in the Central Market in Cambodia. The whole industry, especially the brands under Swatch Group, is fighting very heavily.

The first battle is with the manufacturers, and we have caught someone every week. There are two big manufacturing countries – China and Thailand. The biggest one is in China and the second biggest is in Bangkok. In China, we have to find them, and then the police will come in.  

In Phnom Penh and Vietnam, shops are selling modified and fake watches. We have caught a few where we have sent our internal police there. And then we have to fight against the wholesalers who are going to Phnom Penh selling fake watches, and then we are fighting against the shops in the first and second floor of the Central Market.

Things are improving, but we have lots of battles here.

But remember that they only copy the successful brands; they will never copy unknown brands.