As the venue for the 2016 Summer Olympics and the 2014 World Cup, all eyes are on Brazil. As a market for watches, it is the one BRIC country not to make it onto the podium. In Brazil, as in India and to a lesser extent China, taxes and duties are an obstacle to doing profitable business with a minimum of guarantees. Brands have also yet to find a way to counter corruption, which is rife, forcing several to pull out of partnership deals. As a result, Brazil doesn’t even rank among the top 30 destinations for Swiss watch exports, despite having the fifth largest population in the world, and the fifth or seventh largest economy, depending on sources.
“We’ve been in Brazil for about ten years, where we’re confronted with numerous difficulties, in particular because of what appears to be endemic corruption, and insecurity,” comments Karl-Friedrich Scheufele, Co-president of Chopard.
No limits to growth
Yet the fact remains that the Brazilians love watches, and will take advantage of trips abroad to make their purchases, either in Argentina or, more often than not, Florida which has become something of a capital for luxury for the whole of Latin America. Understandably then, watch stores have sprung up across the Sunny State, from Miami to Boca Raton where Ulysse Nardin recently opened its own store and already has plans for a second. According to consultants Bain & Company, while watches enjoy a special status in the emerging markets, in particular as symbols of wealth – “watches are the first thing the nouveau riche buy” – this need is still in its infancy in Brazil. All of which leaves massive untapped potential in a vast country whose millionaire and billionaire population keeps on getting bigger as commodities prices soar. On a wider scale, the entire Latin American continent is poised for fabulous and many hope imminent growth. “Ultimately, it could outperform the United States for sales,” predicts Philippe Merk, CEO of Audemars Piguet.
What conclusion can we draw from this round-up of the BRIC countries (with an eye on the CIVETS countries of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa)? We’ll leave the last word to Jean-Claude Biver, at the head of Hublot: “A lot of watch companies have yet to realise the importance and potential of the emerging markets. According to the IMF, Brazil, India, Mexico and other countries will become economic superpowers by 2020. At the same time watches, which express social status in consumers’ eyes, will adapt to this new deal and most importantly take advantage of it. There are virtually no limits to how much watchmaking can grow, other than the limits of the Earth itself.”
