1. TAG Heuer CEO discusses
luxury brands and his
company’s ambitious expansion
plans in the Middle East region
Luxury Watches
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2. Tag Heuer is increasing its presence in the
Middle East. Can you talk us through a few
of the reasons why this is and how you plan
to go about marketing and expanding the
brand in the region in the near future?
The Middle East has always been a very
strategic market for TAG Heuer, having been
one of the pioneering regions that opened one of
the first boutiques for the brand. Take the United
Arab Emirates (UAE), which represents for us one
of our leading markets in this part of the world;
we had to strengthen our presence considering
the strategic importance of the country and the
expansion plan to become the business hub for
the region. In a more general aspect, we are today
present in over nine countries with our stand
alone boutique concept, which shows where
we have placed the region in our roadmap. The
marketing strategy follows the same trend as we
are now becoming more and more visible and will
continue to do so in 2012 onwards, through our
new investment in TV, having launched our first
Pan Arab campaign last November, reinforced
our presence in airport Duty Free shops and last
totally recovered and today the growth of Swiss
watch exports is at more than 19.6 percent since
January. TAG Heuer shares among the total
exports is also increasing by 17 percent. We
are growing within a growing market, which is
extremely virtuous. However, this situation is
partially due to China and Hong Kong, [which
grew] at more than during the same period. Travel
retail becomes also more and more important,
and Dubai is an interesting example of this.
Has the brand had to change any of its
marketing strategies or other business
operations to deal with the ongoing
financial crisis (particularly in Europe)?
What did you do when the problems
started, and what do you feel many
companies should be doing in these tough
times, what is your as a general observation
as a CEO who has worked in many different
sectors over the past decades?
As I said before, the watch-making industry
has not been touched by the current financial
crisis. But it might come if growth in China
reduces. Therefore we have to be extremely
cautious, and look at indicators such as sell-out
each month, in order to make appropriate
decisions, such as saving plans, if they show signs
of recession. I think speed is key when leading
any company during a crisis: react quickly,
move fast. Another strategy in tough times
is to continue to innovate, create, pioneer, in
order to propose the best offer and to be ready
to come back strongly when times are better.
This is exactly what we did with TAG Heuer
with breakthroughs such as the Monaco 24,
which was launched at the Basel Fair 2009 and
is still successful today. We also continued our
investments in the new in-house chronograph
movement in spite of the crisis and launched the
Carrera 1887 in early 2010.
In the increasingly international market-
place, ‘thinking local but acting global’ or
similar catch phrases have been adopted by
most multinational corporations, and there
are many stories about how such companies
but not least continuing the boutique expansion,
by opening our first boutique in Rashid Mall in Al
Khobar in Saudi Arabia.
It also seems that the greater Middle
East to South East Asian region is part
of the brand’s global growth strategy,
particularly the Indian subcontinent, which
you have said previously might well be
the backbone of the company by 2020.
Although it is understandable, given the
high concentration of high net worth
individuals in the Middle East, that this
would be an attractive market, it seems
somewhat counterintuitive that somewhere
like India would be so integral to Tag Heuer,
given that the country is not immediately
thought of as a market for luxury brands?
I do understand your point; however, if you
look at India, as it is the main point of interest
addressed here, we cannot ignore that the
middle class has now grown considerably in the
past 10 years, and we all know that this segment
of the population is the driver for a country’s
growth. Having noticed the same, TAG Heuer
has to start building the brand image as early as
possible to be able to gain and lead the market.
Our brand ambassador Shahruk Khan is assisting
us in working on the same. On the other hand,
it is easily noticeable that the government is also
trying to help the luxury segment to expand
as the talk regarding the import tax on luxury
goods is now being looked at closely. We are
really hoping that they will reduce this in a short
period of time, as it is the main bottleneck for us
at the moment.
With the whole global market place as
uncertain and pessimistic as it has been
since early 2008, how has this affected the
luxury watch market in general and Tag
Heuer’s individual share of sales worldwide?
Or has it even been affected and is the
luxury market somewhat insulated by the
high net worth of its target demographic?
The 2009 crisis hurt the whole economy,
including the watch-making industry, but we
With many resilient
economies as a result
of an abundance of
natural resources and a
disproportionally high
number of high-net
worth individuals, the
countries of Middle East
and particularly the Gulf
are attractive markets
of luxury products. One
such brand is Tag Heuer,
Swiss maker of precision
timepieces known for
quality and innovative
design. TAG’s worldwide
chief executive officer
Jean-Christophe
Babin spoke exclusively
to TheEDGE’s Miles
Masterson about the
luxury watch market in
general and specifically
his company’s recent rapid
expansion in the Middle
East, including Qatar.
“I think speed is key when leading any company during a
crisis: react quickly, move fast. Another strategy in tough
times is to continue to innovate, create, pioneer in order to
be ready to come back strongly when times are better.”
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3. to carry the same image and products everywhere,
but we can afford some local tactical operations.
How much does digital and social media
play a role in brand presence, PR, customer
service and marketing in the luxury goods
market for Tag Heuer? Are most customers
in this market perhaps of an older age
group and less likely to use digital/social
media, or is your audience also comprised
of younger people who are more inclined to
interact with the brand that way?
Today the world is turning digital, not only
the young generation. Social media is key
among our PR tools. We are the leading watch
brand on Facebook with 350,000 fans. We were
the first to launch a page on Google Plus. We
also tweet during TAG Heuer events. We care
about bloggers the same way we care about the
printed press. T.A.G. means ‘Technique d’Avant
Garde’ [so] with such a name, we can’t miss
these new tools.
This perhaps comes back to the Middle
East, particularly countries such as Qatar
and the UAE, which are renowned high
volume YouTube, Facebook and Twitter
users, many of them under 25 years old.
What can people expect from the brand in
this region in the future?
The Middle East is not left behind in our
International social media campaign, having
launched in mid-October of this year our
Facebook fan page for the region. In less than
a month, we have already reached more than
a thousand fans and we are aiming at reaching
more than 40,000 fans by end of 2012. Our
fans will be able to discover brand novelties,
attend exclusive events and be rewarded for
their affinity. New social media is giving us a
more interactive platform to communicate and
we will be more and more attracted to this very
demanding audience for sure.
Tag Heuer is quite involved in motor sports
worldwide and in the UAE. Qatar is also a
growing motor sports destination. Can we
“We have been one of the official sponsors of the Dubai
Desert Challenge for the past five years and would
definitely be looking at other suitable sponsorship in the
future in the region and in Qatar specifically.”
expect more involvement from Tag Heuer
here in the near future?
As you may know we have been one of the
official sponsors of the Dubai Desert Challenge
for the past five years and would definitely be
looking at other suitable sponsorship in the
future in the region and in Qatar specifically,
considering that the country is really positioning
itself as a strategic place for sport development
their sport academy at Aspire and having won
the bid for the 2022 FIFA World Cup.
Having visited the region, what are your
personal feelings towards the Middle East
market and how optimistic and excited are
you about the future growth of the Tag
Heuer brand here?
The region as always intrigues me by its ability
to have united so well the East and the West,
and by having placed itself as a major crossroads
that no international brand can ignore. It has also
shown to the world that it has the capacity to resist
and adjust to a tougher environment and reboot
itself after the crisis. We are undeniably not close
to the figures we were realising in the peak of the
growth, but we are definitely on a right track to
match the same soon if no other external elements
[affect us] such as the Greek or Italian debt crisis,
which is currently shaking the market.
People in the Middle East are also
renowned for their appreciation of the finer
things in life, how do you feel this links up
with Tag Heuer’s reputation as a purveyor
of quality timepieces and other products?
What new products are coming on the
market in the near future that people in the
Middle East and Qatar can look forward to?
Our latest novelties are now available in the
whole Middle East, including Qatar, such as our
in-house chronograph movement the Carrera
1887, winner of the Grand Prix de Geneve of
Haute Horlogerie in 2010. For our feminine
audience, we have just delivered a very high-end
watch that match the taste of the Middle Eastern
and international clientele the new TAG Heuer
Formula 1 Ceramic Paved diamonds timepiece.
have got it wrong. Has Tag Heuer even
adopted this kind of strategy in its business
operations and marketing campaigns
worldwide, in particular to separate itself
from its competitors who might be doing
the same?
Talking about products, we are in an industry
where we cannot act too much locally. We
propose the same prestigious collections of
watches and chronographs everywhere, carrying
our DNA made of innovation, performance and
precision. However, we have five different major
ranges: TAG Heuer Formula 1, AquaRacer, Link,
Carrera and Monaco. The mix between these five
pillars is different from one country to the next.
For example, in the UAE, the [portion of sales]
of the AquaRacer is at 39 percent, while in China
only 10.5 percent of the volume is generated
by this range. On top of that, we sometimes do
tactically limited editions for one country. As an
example, we did an Indian Racing limited edition
to celebrate the first F1 Grand Prix in Delhi. It sold
out during the weekend. I think a luxury brand has
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