April 29 - Luxury watch sales slow as China's growth engine appears to be losing steam. Hayley Platt asks the CEO of Digital Luxury Group where market focus is moving.
They're the brands that make up the world's luxury watch market. Some costing much more than the average annual London salary. It's a multi-billion dollar industry that's enjoyed double digit growth. That is until last year when a slowdown in China's economy saw falling demand. Exports of luxury Swiss watches fell by a quarter in the first three months of the year. David Sadigh CEO of Digital Luxury Group has just returned from BaselWorld, one of the industries biggest get togethers. SOUNDBITE: David Sadigh, CEO Digital Luxury Group, saying (English): "We have been working in China for more than 10 years now and what we realise is that for the brands which really enjoy a strong brand image, a strong heritage they still have a tremendous potential ahead. But of course maybe the growth level won't be at the same level than in the previous year but we think that the global luxury industry opportunities remain really strong." But China's new government wants to move away from conspicuous spending. And it's pledged to get tough on so called gifting to government officials. SOUNDBITE: David Sadigh, CEO Digital Luxury Group, saying (English): "This new government will be much more careful when it comes to luxury products. I think they have made it clear they want people, especially the government officials to adopt a more low-key attitude when it comes to luxury products so probably some of the really high end brands will be impacted." Piaget, part of the Richemont group has 20 shops in China with more planned. But says it's now looking further afield for growth. Philippe Leopold-Metzger is the company's CEO. SOUNDBITE: Philippe Leopold-Metzger, CEO, Piaget, saying (English): "Today we are developing business in countries like Korea very fast. We are developing the business in southeast Asia also in Vietnam, Cambodia. We are looking at Thailand and we are looking closely at Indonesia which is going to be a huge market." SOUNDBITE: David Sadigh, CEO Digital Luxury Group, saying (English): "The biggest market at the moment in terms of focus is Brazil. We have seen a lot of clients, not only investing in Brazil but trying really to build their brand and trying to position their brand within the Brazilian market." China's appetite for luxury watches may be winding down. But it might just be a matter of time before new markets in countries like Brazil, Vietnam and Cambodia really take off.