High customs duty hindering growth of Indian luxury market
September, 29th 2014
Renowned Switzerland-based luxury watchmaker Raymond Weil has plans for four more franchise showrooms in India over the next two years but hopes the Indian government will lower the high customs duty which is a high 49% at present.
"The Indian luxury goods market is not growing the way it should due to high customs duty. This makes it complicated to trade in luxury goods like watches. No other market poses such a situation," said Raymond Weil president Olivier Bernheim said.
"Our ambassador is in touch with the government. Certainly a lot of more important tasks are ahead, before it looks at lifting some of the barriers on imported watches. But we are confident the future will be different," Bernheim told IANS in an interview.
He said the new generation will see issues differently and lead the change.
Bernheim is the son-in-law of the company's founder Raymond Weil who died in January this year. The watch brand, which was born in 1976, is now present in 87 countries. Their watches sell for between Rs.45,000 and Rs.800,000 in India.
Asked about the expansion plans, Bernheim said: "We have plans for four more boutiques in India by 2016 if this government moves fast. Otherwise we may slow it down slightly. But we have the confidence that things will move."
The watchmaker had set its foot in India in 1978 and now has six franchise boutiques in New Delhi, Mumbai, Kolkata and Chennai. The company sells some 200,000 watches annually. "Our growth rate has to be 10%-every country, every year."
Bernheim said he was quite fond of India due to its rich culture and heritage. "Indians like gifting, they like jewellery. In fact, they like anything that is a part of their tradition. I am passionate about the country, its culture."
The Raymond Weil president, however, did not want to make any comparison between India and China, which is their second-largest market.
"China is totally different-a new country now, built on modern commercial principles. It works differently, while India has its own trading habits. So I would not recommend comparisons between the two."
As far as smart watches were concerned, Bernheim isn't worried much.
"Many years ago, plastic watches came. Some people said it will effect, and some people thought it won't. At the end, it only expanded the market. I believe smart watches will enlarge the watch market globally. I don't think it will be a competitor."