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Profile: Jean-Daniel Pasche
Apr 13, 2014 4:59 AM
By Rapaport News
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RAPAPORT... The Federation of the Swiss Watch Industry is a privately run, non-profit association that represents more than 90 percent of all Swiss watch manufacturers. Jean-Daniel was appointed president of the federation in 2002 after having served as its director since 1993. He began his career as a lawyer in the Swiss Federal Office for Intellectual Property, where he rose to the position of deputy director.
 Name: Jean-Daniel Pasche
From: Bienne, Switzerland
Organization: Federation of the Swiss Watch Industry – President
Rapaport News: What is the role of the Federation of the Swiss Watch Industry?
JDP: The federation’s function is to defend the interests of the Swiss watch industry. We take care of all issues, particularly political issues, which may impact the watch industry. For example, we lobby for the modification of anti-trust laws and intellectual property laws. We also take positions on fiscal policy to ensure the interests of the watch industry are taken into account when the Swiss authorities issue a new law. We do the same abroad, for instance regarding European Union directives. We’ve been very active in the free-trade agreement negotiations between Switzerland and China, Japan, India and other countries. Our goal is to facilitate trade and exports because the watch industry is export-based.
Another area we actively address is to ensure that Swiss watchmakers’ input is heard when international standards are determined for the industry – for example, regarding water resistance standards, anti-shock standards and so on.
We are also very active in the fight against counterfeiting. We organize the seizure and destruction of fake watches to ensure brands’ intellectual property rights. We launched a public relations campaign against counterfeiting and we lobby for legislation to protect the "Swiss-made" label.
The federation provides special services for our members, such as legal services and a commercial service to inform companies how to conduct business in specific countries. The federation also provides detailed market statistics for its members beyond what it makes available to the public. We are not active in setting brand marketing strategy, as a federation we focus on defending the common interest of the brands.
Rapaport News: What is your membership and how is the federation structured?
JDP: The federation has approximately 500 members, which are either from large corporate groups or medium-sized companies. Individuals who are active Swiss watchmakers with their own brands may also join, but we have only a few.
Our association has an assembly once a year that all members are invited to, so they can stay informed regarding what is going on in the industry. The federation also has a board of 20 members that meets four times a year and that determines the organization’s goals for the next year.
Rapaport News: Does the federation have a strategy to grow the Swiss watch brand?
JDP: Not to grow the brand, but to increase the protection of the label “Swiss-made” because that is a common issue for our members.
An individual brand can ask for information or support from the federation but we will not tell a brand what to do. It’s not our role to develop a marketing strategy for the Swiss watch industry or to engage in promotional activities. It is up to the brands to do this because we would not have the same policy or strategy for a low-end brand that we might have for a luxury brand.
Rapaport News: How was 2013 for the Swiss watch industry and how is it faring in 2014?
JDP: Last year was positive as we recorded a slight growth of 2 percent. That was still sufficient to make 2013 a record year for the industry with total exports of $24.5 billion (CHF 21.8 billion). So it was positive, although there were big differences among the brands.
Among the various markets, we have to note a decrease in exports by value to China, although the volume of exports to China increased. Exports to Asia as a region dropped because of the decline to China and Hong Kong, but we had good results in markets like Japan, Singapore, Thailand and South Korea. The U.S. has been recovering gradually since 2010. We also saw a nice increase in Europe due to a rise in exports to markets like Germany and the U.K.
In 2014, we expect continued growth, perhaps a bit stronger than last year. For us, any growth compared to 2013 will be positive because 2013 was a very good year. This means it will be difficult to do even better. In fact, the figures for the first two months of the year showed that exports have already increased by approximately 6 percent year on year.
Rapaport News: Has the downtrend in exports to China continued?
JDP: Things there seem to be stabilizing but it will remain difficult in China. We are confident that the Chinese market will recover, we just don’t know when. But there is still potential in China as there are more people there each year who can afford to buy a Swiss watch.
Rapaport News: Is there a global trend toward low-end price points or is the luxury segment still strong?
JDP: Last year, and the beginning of 2014, we noticed that the best performing segment was the mid-price range watches. The luxury segment did well in most countries except in China and Hong Kong.
Rapaport News: Is that a reflection of consumer confidence and economic growth?
JDP: Of course Swiss watch exports depend on the economics in different markets and it reflects the level of consumption, but we are satisfied to see that exports remained at a high level. It is also interesting to note that last year’s exports by volume decreased, while the value of exports increased, but this year we are also seeing an increase in exports by volume. For us, it is important to grow the number of pieces exported in order to maintain our leadership in the market. The low end is also very important in the Swiss industry as volume creates jobs.
Rapaport News: How many people are employed in the Swiss watch industry?
JDP: I have not seen the figures for last year but at the end of 2012 we employed about 56,000 workers. I expect that today we employ a bit more.
Rapaport News: What are the biggest challenges currently facing the industry?
JDP: To convince people to buy watches, because you can live without one today. It is important to innovate and come out with new products and new collections and improve quality. This is a permanent challenge.
Of course, you also have specific challenges for different brands. Generally, there are two key issues for brands: sourcing components and securing a distribution network for their watches. These two issues are especially difficult for the smaller brands.
Rapaport News: Is production in Switzerland growing?
JDP: Production appears to be growing because we are reinforcing the “Swiss-made” label. I expect it will continue to grow because the majority of the added value of the watch will have to be made in Switzerland. However, this condition is not yet enforced and will be implemented sometime next year. It is up to the government to set the implementation date. As part of that Swiss-made campaign we also produce components used in watches in Switzerland although components are also imported from abroad.
Rapaport News: Are you concerned that the development of smartwatches might take market share from the Swiss industry?
JDP: I would say that smartwatches are complimentary to traditional watches. They are not a substitute because they do not fulfill the same objectives. A Swiss watch is not just a timekeeper. It is a nice product that creates emotion. It is like a jewel that you wear and is not just about functionality. Swiss watches can co-exist with smartwatches. We know that some Swiss companies are active in this field and it is up to each company to decide if they are willing to invest in this kind of product or not.
Consumers today have several watches and they change the watch they wear according to their planned activities for the day.
Some young people do not even wear watches, but perhaps if they start wearing a smartwatch they will get used to wearing something on their wrist. It may lead them to wear other watches.
Rapaport News: In 2012, the diamond industry noticed a decline in the amount of diamonds purchased by the watch industry. Is there a shift in what materials the watch industry uses?
JDP: This decrease makes sense as we have seen a shift from high-end to mid-range watches. We also had a decrease in gold watches, which is linked to the same trend. We should also note that there was a boom just several years ago for watches made from gold and diamonds until 2012 or 2013. Perhaps it is just a question of current trends.
Rapaport News: What will spur growth in the watch industry over the next couple of years?
JDP: We are convinced that there is potential to grow. In Asia, for example, we see opportunity to expand into the Philippines, Vietnam, Indonesia and further into China. There is potential in Eastern Europe and South America, and India is also a growing market.
Rapaport News: How do you see the Swiss watch industry evolving in the next 10 years?
JDP: I cannot give you an overall industry model as it is up to the brands to develop. Our brands are strong and we are targeting growth in markets such as India, Russia and Indonesia, and implementing a free-trade agreement with China.
We doubled our exports over the last 10 years and I think we can do it again in the next decade. To do so we will need to invest in educating young people so that we have the skills to allow the industry to develop in Switzerland.
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Tags:
Federation of the Swiss Watch Industry; Jean-Daniel Pasche, Rapaport News
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