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Right place, right time for luxury watches

By Fan Feifei | China Daily Europe | Updated: 2016-06-05 10:10

Domenico Oliveri, CEO of Italy's Fendi Timepieces, is bullish on future prospects for business in China

Domenico Oliveri, chief executive officer of Fendi Timepieces, a watch firm that grew from Italian luxury fashion house Fendi SRL, is bullish about the luxury market in China. He believes there is a huge potential for growth as Chinese consumers' spending power is growing.

"The Chinese market is very important for the luxury business, and I hope the success of Fendi in China will expand to Fendi Timepieces," Oliveri says.

He adds that Chinese customers are very mature, conscious of trends and willing to spend money on luxury goods worldwide.

Fendi Timepieces also has advantages in the watch market because its prices are more competitive than other luxury watchmakers such as Patek Philippe, Vacheron Constantin, Rolex and Cartier. Oliveri says ordinary people who like Fendi watches also can afford them.

The company will increase its investment in China and open more stores in second- and third-tier cities or provincial capitals, according to Oliveri.

Founded in 1925 in Rome, LVMH-owned Fendi now covers fur, leather goods, shoes, fragrances, eyewear, timepieces and accessories.

It entered the watch business in 1988. In 2014, it acquired Swiss watchmaker Taramax SA, which produced the luxury accessory house's watches under license. All of Fendi's watches are manufactured in Switzerland.

Sales of luxury goods in China declined slightly last year to 113 billion yuan ($17.2 billion; 15.4 billion euros) from 115 billion yuan in 2014, consulting firm Bain & Co says.

The decline was seen in sales of menswear and watches, which were down by 12 percent and 10 percent respectively.

Despite these tough conditions, Oliveri remains optimistic and sees a lot of room for further development.

Fendi will return to "super high-end" positioning, with emphasis on handbag accessories and fur in top luxury goods, according to Pietro Beccari, Fendi's chairman and CEO.

Fendi has 200 stores worldwide, 11 of them in Italy alone. It has launched online sales in Europe, Japan and the United States and will integrate traditional retail models with online.

With the rapid growth of the Chinese economy over the past two decades and its expanding middle class, Swiss luxury watches are gaining popularity in China. At present, China is the third-largest market for the Swiss watch industry.

According to statistics from the Federation of the Swiss Watch Industry, the value of Swiss watch exports to the world dropped 3.3 percent in 2015 to 21.5 billion Swiss francs ($21.6 billion; 19.4 billion euros), the worst performance in the past six years.

Oliveri says although sales of Swiss watches declined last year, overall sales of Fendi products in China continued to rise, up 30 percent last year compared with 2014, and Fendi Timepieces is expected to perform better with the help of the whole brand's strong momentum.

"The market is evolving and customers are not only interested in products anymore. They want a nice story behind a product, so in this evolution, a 'story' brand with strong heritage will win," he says.

Born and raised in Italy, Oliveri joined Fendi 14 years ago as operations director to meet the challenge of setting up an efficient and profitable industrial organization for the company.

After receiving degrees in nuclear engineering and business administration, he worked at many multinational companies. In 1988, he started his career with Procter & Gamble where he held different managerial positions. Five years later, he joined Sara Lee Group.

Oliveri was appointed CEO of Fendi Timepieces when the luxury house acquired Taramax three years ago.

He says leading a global brand like Fendi Timepieces requires a coherent, consistent strategy.

"Our strategy is to be coherent. Customers travel the world and will find a coherent collection and a coherent message. The world today is more linked than what we think, so being coherent everywhere in the world is the right strategy."

Oliveri says companies have to balance ups and downs in different parts of the world when managing a global brand. Being global is the best way to overcome temporary difficulties.

fanfeifei@chinadaily.com.cn