...and there's no doubt that growth for Richemont as a whole has slowed, as China's sales have moderated. With exchange rate adjustments total growth is +1%. You can read Richemont's announcement by clicking here.
I don't have specific numbers for IWC but as far as I can tell it's still a leader in growth among the Richemont brands, and on the whole continuing to grow nicely.
Growth of Richemont group including IWC in the past decade was largely driven by explosive growth in Asia. Now, Asia including Japan is 50% of Richemont group's Global sales. However, the way this company treats its clients in Asia versus their traditional markets in Europe or Americas is very different or even discriminating in my view. See the difference when you visit the boutique in Europe and Asia. See what kind of beverages and snacks they serve to their clients. See how they treat you. For instance, go to Cartier boutique in Paris and Tokyo, and compare the experience. I will say it is a contrast between champagne and mineral water. See their sales results by region (excluding FX impact).
richemont.com/investor-relations/key-figures/sales-by-region.html
…so Asia including Japan are doing 50 percent of growth for Richemont with mineral water?
Best,
-Christian
Ha ha ha... "50% growth with mineral water" may not be an exaggeration.
Is this a surprise? In all major industries, we see the same patterns. For instance, Japanese companies expanding to China or to the West took exactly the same approaches. Don't feel bad that Europeans were treated less favorably than Japanese. (I am not Japanese, by the way.) Just like European companies expanding to Asia, Japanese companies tried to expand to Europe and make money where they could leverage their global brand name or where the competition was weaker. Electronics and car industries are good examples. For instance, they tried to offer the same product and services at a higher price or offer less services Versus home markets. It worked in many markets. Think about Sony or Toyota. That way, they increased their margins and compensated for their low growth in sales and profits in home markets. If you lived in Japan and experienced Japanese products, pricing, customer service, you would see the difference.
Or, a company like Toyota created a new brand called Lexus, and then charged 30-50% more. Recall Lexus models all come from Toyota's best sellers in home market of Japan. They make some minimal changes in interior and exterior decorations to justify the up-charges. If you have lived in Japan and have driven both Toyota base model and its Lexus version, you will understand what I mean. You won't tell any significant difference at all.
However, those good days did not last forever. Competition in foreign markets gradually got fierce and then killed Sony and most Japanese car makers. European luxury brands are enjoying their heydays in Asia. It will be I nteresting to see how long long they can do so. Most probably, those who serve their customers better than others will survive or thrive longer.
IWC is not in the lead in this game, based on what I have seen so far. IWC's focus on sales at the cost of customer service in Asia is heading to a very wrong direction. I like IWC watches and want to keep buying and enjoying them in the future, if and only if I can get the right post-sale service from IWC when my watches need servicing and repair.
Mayflower: some interesting points you raise. Competition is always a problem particularly when the competitors are producing products that the consumers want. I don't think your Sony and Toyota examples are relevant. IWC is a relatively small part of Richemont (albeit a growth area). The market's reaction to the Richemont results suggests that Richemont is getting something right. Richemont is all about the consumers' relationship with the brands. Sony and Toyota are a very different kettle of decaying fish.
so Asia including Japan are doing 50 percent of growth for Richemont with mineral water?
Best,
