For quite some time, the Swiss luxury watch brand Breitling was relatively unknown to Chinese consumers. However, in Western markets, Breitling, founded in 1884, stands shoulder to shoulder with well-known brands like Rolex, Panerai, and Vacheron Constantin, capturing the attention of Chinese connoisseurs. Not only did Breitling pioneer modern chronographs, but it's also one of the few watchmakers globally capable of independently researching and producing watch movements. Its stringent and precision-focused craftsmanship results in every piece bearing the official Swiss Observatory certification.
According to Morgan Stanley's 2023 Swiss Watch Brand Research Analysis report, Breitling witnessed a remarkable sales growth of approximately 25% in 2022, reaching a staggering 860 million Swiss Francs. This marks the brand's continuous ascent in industry rankings for the past five years. By revenue, Breitling currently holds the ninth position in the industry.
In stark contrast to its high visibility and market share in Western markets, Breitling has long maintained a relatively low profile in the Chinese market. The report by Morgan Stanley also highlights that Chinese consumers accounted for over 30% of total Swiss watch sales in 2022, yet Breitling's sales figures suggest only less than 10% is of China sales.
The situation facing Breitling is abundantly clear: the relatively untapped Chinese market, with its smaller market share, presents the brand with new opportunities. In response, Breitling has decided to boost its market exposure by enlisting the help of celebrity endorsements.
On June 15th, Breitling, the Swiss luxury watch brand, hosted a launch event in Shanghai called “Let the Show Begin”, during which the brand proudly announced Chinese actors Huang Jingyu and Angelababy as the new faces to be part of the “Breitling Squad”.
Georges Kern, the CEO of Breitling remarked, "Announcing these two new Squad members is a crucial step in our plans for this year. These new Squad members perfectly embody our brand spirit through their personal styles and positive attitudes. We hope that through their involvement, we can convey Breitling's unique brand positioning, style, and spirit to Chinese consumers more broadly, which is a goal we will continue to strive for."
Before the event, ConCall had an exclusive interview with Georges Kern, delving into the brand's development and expectations for the Chinese market.
ConCall: It's undeniable that, compared to its high profile in Western markets, Breitling is still a relatively niche brand in the Chinese market. So, where does Breitling see its growth opportunities in China?
Georges Kern: Since I joined the brand, we've accelerated our expansion in China market, with more stores and new local brand ambassadors. Currently, the Chinese market accounts for around 5% of our overall revenue. Compared to other Swiss watch brands, this figure is still relatively low. However, it clearly indicates that there is significant room for growth in this market. I'm not concerned at all about the brand's development in China because Chinese consumers have a global perspective. They won't purchase brands that perform poorly in Western markets. So, as global travel resumes, our excellent performance in the west will become more visible to Chinese consumers. Domestically, we will continue to invest in China to accelerate Breitling's growth.
ConCall: How would you assess the brand's current performance in China market?
Georges Kern: In terms of our current level of development and market position, we've been doing quite well in the Chinese market. However, to elevate our sales figures in China further, we need to accelerate the pace of our store expansion. We've already achieved strong market performance in Japan, Korea, and Southeast Asian markets. We're confident in our business and it's only a matter of time before the brand's sales in China reach higher levels.
ConCall: With the reopening of global travel, many Chinese consumers are returning to Western markets to purchase high-end watches. How do you view this trend? Will Breitling take measures to stabilize its sales and growth in China market?
Georges Kern: We can't stop consumers from buying watches abroad. On the contrary, due to our high visibility abroad, Chinese consumers traveling to Europe and North America will gain a better understanding of Breitling's expertise and exposure of brand image. For the brand, expanding our sales network is key to maintaining growth in the Chinese market. We not only want to increase our visibility in first-tier cities but also in second and third-tier cities. To achieve this goal, we need more stores. Our aim is to open more than 20 stores in China this year. While steadily expanding our sales network, we will continue to raise our visibility and market share in China through celebrity endorsements and marketing efforts.
ConCall: Female watch category is a key focus of Breitling's development strategy. How is the brand currently performing in the women's watch? In this highly competitive market, how does Breitling plan to increase its visibility among female consumers?
Georges Kern: Facing an equally numerous and powerful audience as female consumers who share a passion for luxury watches, we consider female consumers a crucial strategic focus. Breitling already has many women's watch offerings, but compared to other brands our female product business is not particularly prominent. Therefore, we plan to introduce more women's products in the future, providing a broader range of services to female consumers. In terms of style, Breitling doesn't conform to the typical femininity, instead we aim our offering products to be classy elegant, relaxed, even with a bit of edginess. In China market, our collaboration with the new brand ambassador Angelababy and her massive fan base on social media will help younger female consumers discover the uniqueness of our products.
ConCall: Therefore, should we conclude that celebrity endorsements is deemed as a key strategy for Breitling's continued expansion in China market?
Georges Kern: The unique nature of China market necessitates the use of celebrities or public figures to boost the brand's market presence. Our partnership with international stars like Charlize Theron has proven the effectiveness of this strategy. Thus, Breitling also needs Chinese celebrities to help strengthen our connection with the Chinese market. As with the recent announcement of Huang Jingyu and Angelababy, I believe their immense popularity will introduce Breitling to younger audiences and prompt them to explore our brand history, products, and capabilities.
ConCall: In recent times Breitling seems to have maintained a relatively low profile in China market. Any particular reason for that? What are your expectations for brand’s future development?
Georges Kern: With our rapid growth in other markets, this strategic approach has already begun to impact the Chinese market. We've recognized that Breitling's products have a strong appeal to Chinese consumers. It's just a matter of time, and we need time to establish the brand's unique image and value which help stimulate desire from our consumers. Chinese tourists are gradually back in global travel, they will witness the brand's impactful image outside of China. Combined with our investments in the digital space, Breitling is bound to become more visible to consumers. All these factors will enable Breitling to accelerate its growth in this market. We’re expecting Breitling's market share in China to reach the level we have in European and American countries within the next two to three years.
In April 2017, corporate venture capital company CVC acquired 80% of Breitling’s shares, which was later on increased to 100% in 2018. At the time, Bloomberg estimated Breitling's market value in this transaction to exceed 800 million euros. In 2021, Swiss private equity firm Partners Group acquired 25% of Breitling from CVC, and in 2022, Partners Group raised its holdings to over 50%, while CVC's ownership decreased to around 20%. Breitling's market valuation also surpassed 4.2 billion Swiss Francs.
The continuous growth in Breitling's market valuation further confirms its increasing revenue, market share, and profitability. Morgan Stanley points out that due to Breitling's continuous expansion of its product lineup, the brand has not only established a more upscale image but also improved its pricing and profitability. Bets on the female segment market, the Chinese market, and further rationalization of the retail network have all made positive progress, propelling Breitling from the 15th position in revenue rankings in 2017 to the 9th position in 2022 among Swiss watch brands. Breitling is poised to enter the billion Swiss Franc club by 2024.