Date:08/03/2005 URL: http://www.thehindubusinessline.com/2005/03/08/stories/2005030801080400.htm

Back The trendy Panerai

Anna Peter

Mumbai , March 7

THESE heavy-bodied timepieces are only for those who can spend over Euro 3,000 (Rs 1,70,000) without thought ... and without flinching. Welcome to a choice world. Panerai, the Italian watchmaker with about a 100 years of service to the Royal Italian Navy, has used this expertise to create its watches, according to Mr Romain Le Chevallier, Brand Manager, Panerai.

According to him, it is the romance of its history and exclusivity that has its customers smitten. Panerai watches, unlike other premium watches, are made in extremely small lots and limited editions. Only a few thousands are produced a year to keep prices at rarefied levels. The pricing, he said, was justified because they are all fine handcrafted pieces and a great deal was spent on research and development.

Worldwide, word-of-mouth still drives most its sales. However, in India the company's initial investments will be divided between building the brand image and establishing channels of distribution. It has only five boutiques globally and about 20 points of sale. Based on the reception in Mumbai and Delhi, the company is planning points of sale in Chennai and Bangalore.

While they are unisex, Panerai watches look distinctly masculine, though it is popular with actors, even those of Indian origin.

The more expensive pieces are priced at over Euro 19,000 (Rs 10 lakh). It is the boutiques that stock these expensive pieces.

The Indian market is interesting because of the large middle- and upper middle class population and rising aspiration levels, he said, as consumers were known to spend upwards of Rs 5 lakh on a single premium watch. He predicted that the potential for growth of premium watches was between 30 and 50 per cent in India. Sales have increased due to a steep fall in duties on landed costs of watches — from about 300 per cent to about 50 per cent.

While Switzerland is by far the biggest watch manufacturer and exporter of watches worldwide, China, Japan, Germany, France and Italy follow in that order. In 2003, Switzerland exported $7.57-billion worth of watches, China $1.92 billion and Italy $554.61 million.

At present, the brand is owned by the Richemont Group. The brand came to the Italian market only in 1997, and in the international market in 1998, even though Panerai had opened its first watch shop in 1860s. Its entry into the commercial market was delayed because of its association with the Royal Italian Navy, to which it used to supply high-precision instruments. Panerai watches dated before 1997 are collectibles of very high value.