Parmigiani Fleurier is well known for its haute horlogerie technical competency, the fine finishing and its extensive in-house manufacturing ability. For those who are more focused on the Parmigiani ultra complications, it is perhaps easy to overlook a new chronograph and a basic 3-handed watch. Yet, it will be a mistake to underestimate the significance of these two new models – i.e. the men’s Tonda Metrographe and the corresponding ladies’ Tonda Metropolitaine.
On the surface, the Tonda Metro range looks just like another set of stylishly designed high end automatic watches. However having sat through the eventful launch with Parmigiani talking more about the “Metrographe men” and the “Metropolitaine women” than the actual watches, one begins to realised that Parmigiani has embarked on a new strategy to expand its reach beyond the diehard technical watch enthusiasts. It is of no coincidence that the launch event targeted only bloggers devoid of the traditional watch specialists. The relatively affordable price range of CHF8, 000 to CHF17, 000 was also a dead giveaway.
No one from Parmigiani commented regarding this topic but part of the explanations for the new direction could be the follow-up to their big clean-up operation of the all-important Asian market.
Parmigiani Fleurier has earned its respect from the serious watch enthusiasts due to the pedigree of master watchmaker Michel Parmigiani and the strong commitments of Sandoz Family Foundation behind the vertically integrated Les Manufactures Horlogères de la Fondation (MHF) – consisting of Atokalpa and Elwin watch component maker, case manufacture Les Artisans Boitiers, dial maker Quadrance et Habillage and one of the most prolific independent high end movement maker Vaucher Manufacture Fleurier. Together, MHF not only is the backbone of Parmigiani Fleurier but also an important supplier of components and movements to the haute horlogerie industry. Yet despite all these, Parmigiani Fleurier has found it difficult to spread its mass appeal beyond the serious watch enthusiasts.
The annual production of Parmigiani Fleurier is only 5000 to 6000 watches a year and the lack of mass appeal could be a positive factor when Parmigiani was targeting an exclusive set of collectors, but a strong group like MHF is unlikely to be satisfied with its current niche appeal. The challenge is especially difficult in Asian market where most established retailers are only interested to distribute the top selling brands and have little patience for the less popular ones. As a result, Parmigiani tended to get the worst lot of distributors in the region, at least until they decided to clean up the Asian distribution and marketing in the last two years or so.
The radical move to take over the Asian distribution network was an extremely bold move and demonstrated the huge commitment of Parmigiani Fleurier. Fortunately, they managed to snatch the loyal service of Wei Shan as their Asia Pacific Managing Director to spearhead the operation. Wei Shan is a watch industry veteran and has worked for LVMH and was helming the regional communications for Vacheron Constantin during the brand’s most rapid ascent in China. Wei Shan is a fully committed worker – she is dynamic and possesses a unique understanding of the Chinese luxury segment in Asia. Her deep insight into the Hong Kong and China is particularly valuable for her challenging task.
In 2013, especially the last quarter of the year, the Asian luxury watch market saw the sharpest decline from its heyday, albeit from a very high base. It is estimated that even the most established brands saw sales drop of at least 30% within China (excluding Chinese purchase outside of China), and for some lesser brands, the drop could be as high as 70% – and yet, overall Chinese purchase remains the most important bulk of worldwide turnover in the haute horlogerie industry. In this aspect, Parmigiani’s timing to take over the Asian distribution might have been the worst, but holding on to rotting distributors and losing control of the regional brand management are not an option either.
Thanks to the foresight of Parmigiani CEO Jean-Marc Jacot, the relentless Wei Shan and the strong commitment of shareholders, Parmigiani successfully took over the Asian distribution with new boutiques and a new set of more reliable retailing partners. Coupled with the regional presence of new Parmigiani local offices, Parmigiani is now fully in charge of its own operation, including a much more visible marketing, communications and an immediate increase in store presence throughout Asia. Something the new experienced Asia Pacific leadership is totally comfortable with.
While Parmigiani Fleurier has performed respectably in a very challenging market, the brand also needs a more accessible range of products to expand beyond its niche market. The elegant classic types of watches like the Tonda Metrographe and Metropolitaine could be the perfect launch pad to take off in Asia. Come SIHH 2014 tomorrow, there will be other more impressive Parmigiani models to be launched, but strategically, the Tonda Metro collection will likely to be the most important.
Whether the rocket will successfully take off or not, it’s time to start the countdown!