Most of the watch companies questioned about their activities in the Russian market were basically passionate about working there and particularly enthusiastic about its potential. The complex Russian system that combines a distributor/wholesaler and retailer is accepted as par for the course and most companies although they cannot release actual sales figures, seem to be in double-figure growth. The major set backs today seem to be the purchasing power of the average Russian, but as the economy and therefore the wages improve, they see their share of the market improving. Most brands are not in competition with any of the Russian brands because of the very different pricing levels and since, in general, the Swiss watch is seen as the benchmark for watches – a luxury, yet fashionable item to be seen wearing. It also helps that the innate Russian watch culture for mechanical watches means that Swiss watches are very much appreciated.
The latest figures available from the Federation of the Swiss Watch Industry show that Russia is 15th in the 2003 export league table with imports amounting to 149.2 million Swiss francs – a growth of 22.8% over the preceding year. Many of the companies’ CEOs openly answered questions on Russia and I would like to thank in particular Thierry Nataf of Zenith (who is especially at home in Russia since he is fluent in the language), Bernard Fornas of Cartier, Roland Streule of Rado, Peter Stas of Frederique Constant for their invaluable input. I’m also indebted to Beatrice Howald of the Swatch Group, Daniel Wechsler of Maurice Lacroix and Igor Prudnikov and his Rosinex team for their help.

Frederique Constant
Frederique Constant has been dealing with Russia since 1995, initially selling 2,500 watches a year through Avesta. With the rouble crisis, sales dropped to around 500 pieces a year and in September 2002 a new contract was signed with Bristol Trading House who now distribute through the group’s Consul chain of retail outlets. Frederique Constant is impressed by Bristol’s professionalism which they say is more effective than many of the more sophisticated markets.
The limited purchasing power of the average Russian outside of Moscow and Saint Petersburg and access to the regions remain a problem for Frederique Constant, but the brand is fast developing. At present, 60% of its sales are in Moscow – often because the Russians in the structured oil and food industries travel and make their purchases there.
The current sales of Frederique Constant watches are now up around the 2,500 pieces a year.

Maurice Lacroix
The strategy of Maurice Lacroix in Russia is to grow slowly, but consistently and using its partner Bristol Trading House, has carefully selected the 80 points of sale in Moscow, Saint Petersburg, Novosibirsk, Rostov-on-Don, Ekaterinburg, Vladivostok etc.
Maurice Lacroix began working with Bristol four years ago after a visit during the Basel Fair. The company has proved to be particularly reliable and they do their utmost to expand the business and give the retailers 100% satisfaction in terms of support and technical help.
Using its international publicity campaign designed by Springer & Jacoby of Hamburg, Maurice Lacroix appear in most of the leading quality magazines as well as the national watch magazines.
Concerning their position in Russia, Maurice Lacroix don’t see themselves as being in direct competition with any of the local brands given that they tend to use different retailers. With its strong presence in Russia and its special incentive training trips to Saignlégier for retailers and special retailer and consumer events in Moscow, Maurice Lacroix sees a successful future in the country.
In terms of growth, in its four years in Russia, Maurice Lacroix has enjoyed an annual increase of sales between 25 and 30%.

Nina Ricci
The brand name Nina Ricci is particularly well known in Russia and has been for more than 40 years. In fact, the brand had a boutique in Moscow and was one of the few fashion brands known there during the communist period.
The Nina Ricci watch collection began using a distributor (Bristol) in 1998 when they contacted them in Moscow and from the very beginning the relationship was very professional and based on a concrete Business and Marketing plan. The strategy developed was to take the brand to the major provincial cities such as Novosibirsk, Kasan, Murmansk, Rostov, Omsk, etc. as far afield as Vladivostok. In Moscow, the Nina Ricci fashion boutique also sells the watches.
Advertising campaigns are used during the peak seasons in selective magazines such as Caravan, Parad, Gala, etc.
Being a relatively small to medium-sized brand Nina Ricci could not afford to establish its own distribution structure in Russia, consequently they are happy using Bristol given that they are totally dedicated to the few brands they represent.
Today Russia is Nina Ricci’s fifth largest market.

Raymond Weil
Raymond Weil has been present in Russia for 10 years and apart from Moscow and Saint Petersburg they are present in 100 retailers in most of the large Russian towns.
Using Bristol Trading House, Raymond Weil believes it has a real proactive partner with the means and tools necessary to promote their brand. The only problem they see is the limited number of quality points of sale. However, they feel that working with a distributor they can control the destiny of their products and can obtain a direct feedback on them without going through a third party.
Raymond Weil has seen a 300% growth in their sales to Russia over the last three years.

TAG Heuer
TAG Heuer has been in Russia since 1994 collaborating with Chronolux. A selective distribution network has been established promoting the brand as the ‘leader of prestigious sports watches’ and the increased advertising, PR and shop-level merchandizing that began in 2002 is now beginning to reap results.
Present particularly in Moscow with their own boutique with points of sale in Saint Petersburg and other selected cities, the growth of the last two years, during which time sales have doubled, TAG Heuer attributes not only to the advertising, but also because of the quality, innovation and design of their watches, which has an appeal to the young, trendy people as well as watch connoisseurs.
Basically satisfied with their collaboration with Chronolux, TAG Heuer believes that the distribution system is not sufficiently organized because the definition of the roles between wholesalers, distributors and retailers are not defined clearly enough.
TAG Heuer use their international advertising campaign ‘What are you made ofı’ for the press and the cinemas with their ambassadors Tiger Woods, Kimi Rakonen and Ines Sastre etc.

Zenith
Historically, Zenith’s association with Russia dates back to 1865 when the Tsar purchased a watch. By 1867 the company was exporting to the country.
Today, Zenith use Mercury as their partner who they believe understand the ‘spirit’ of the product and are committed to them. They have corner displays in Moscow and Saint Petersburg and the Zenith complications are being well received by the consumer. The brand’s star logo is seen as a good luck sign and the name is easily pronounced by the Russians. The watch that is selling well so far is the new ChronoMaster in gold (with a US$ 20,000 price tag).
Thierry Nataf explains, “Russian men are like the Italians, they like cars and watches. It’s a part of their culture and with the new oil money around, the market has an enormous potential. In the next three years I anticipate double figure growth there.”

Cartier
The relationship between Cartier and Russia dates back to 1860, when Prince Salikov became the company’s first Russian client. In 1904, Pierre Cartier travelled to Moscow and Saint Petersburg and in 1907 Tsar Nicolas appointed Cartier as an official supplier to the Imperial court. In 1908 Cartier opened a salesroom in Saint Petersburg.
At the beginning of the 1990s, Cartier returned to Russia and in 1996 opened a boutique in Moscow. Cartier use Louvre’s point of sales since they believe they have the best distribution network. In 2002, Cartier formed its own subsidiary in Moscow and a Cartier team are there to help develop the brand. Two new boutiques were opened at the end of 2003 – one in Moscow and the other in Ekaterinburg – and watches and accessories are also to be found in Saint Petersburg, Rostov and Saratov – with a new boutique scheduled for Kiev in the near future.
Having its own subsidiary in Russia, only Cartier’s fragrances are sold through distributors.

Vacheron Constantin
Russia has been an important market for Vacheron Constantin since the early 19th century. Present in Moscow with an ‘internal’ boutique and display corners in Saint Petersburg and Ekaterinburg, Vacheron Constantin consider their growth in the Russian market to be strong and ‘healthy’ (double digit growth) given that the Russians are particularly interested in mechanical watch complications.
Being a part of the Richemont Group, Vacheron Constantin, like Cartier, uses its Russian subsidiary for distribution.

Swatch Group
Certain of the brands within the Swatch Group, namely Breguet, Omega, Longines and Tissot, have a long history of selling in Russia. In Alexander Puskin’s epic Eugene Onegin, which he wrote in 1833, he writes in praise of the accuracy of Breguet’s timepieces.
During the Soviet years until 1991, sports kept the names of the Group’s brands before the people, and in 1993 business started normally again, rapidly progressing over the last three years. Most of the brands are present in around 170 towns – those with a population of over 100,000, although Omega is present in just 36 cities. Most of the business however is in Moscow and Saint Petersburg.
Given the size of the Russian market, all the Swatch Group brands use more than one distributor and the Group looks at all possibilities of improving competitiveness. The Swatch Group markets 15 brands in Russia and each has its own story to tell. Tissot, for example, has been dealing with Russia from 1858 to 1917 and then began trading again in 1993. Today the brand can be found in more than 170 cities whilst Breguet is to be found in only two.
The Swatch Group sees Russians as hard working and as the economy gradually improves, they anticipate further growth in the watch market.

Breguet
In partnership with Mercury since 1997, Breguet is present in 7 retail outlets in Moscow and one in Saint Petersburg.
In an unusual position of being renowned in Russia because of Breguet’s personal dealings – a branch office in Saint Petersburg called ‘Maison de Russie’ which was opened in 1808 and the brands’ attachment to many world-renowned Russians – from the Tsars to Rachmaninoff and Potemkin to Pushkin.
The Breguet collections selling well in Russia are the Grandes Complications, the tourbillon and the Reine de Naples Collection. To commemorate the founding of Saint Petersburg 300 years ago, Breguet and the State Hermitage Museum are currently organizing an exhibition illustrating the links between Breguet and St. Petersburg using watch and clock collections. Breguet has produced a Limited Edition of special watches engraved with the portrait of Peter the Great for the occasion which will be available uniquely in the Moscow and Saint Petersburg stores.

Rado
Rado began working in Russia in 1994 and contrary to many other brands it was totally unknown at the time. A program of education and information, the build-up of points of sales and customer services had to be developed, but Rado saw this a great challenge since they felt that the company had to have a presence in Russia.
Today Rado has points of sales in most of the important cities using three different wholesalers/distributors – Mercury, Consul and Eurotime.
Since Rado is not especially known for its movements, they focus on the design and the materials in their promotions and, in addition to using the major publications for advertising, Ingeborga Dapkunaite, a famous Russian actress is used in the PR spots.
Rado feels that the potential in Russia is enormous and the only hiccup is the question of the purchasing power of the people. Nevertheless, Rado has regularly enjoyed a double-digit growth – even in 2003, which was a difficult year generally.


Revolution in evolution (PART I)
The Russian economy (PART II)
The Russian watch industry (PART III)
The Russian watch market (PART IV)
Watch companies in Russia (PART V)