Audemars Piguet makes China push, on track to hit 2018 sales target

Swiss watchmaker Audemars Piguet is on track to hit 1 billion Swiss francs ($1.04 billion) in global sales this year, the firm’s chief executive said in an interview in Beijing, amid a revival in luxury demand in China driving up watch sales.

The watchmaker’s CEO Francois-Henry Bennahmias told Reuters that sales rose more than 9 percent in the first quarter. Last year, sales rose 12 percent thanks to a shift towards single-brand stores and higher average retail prices.

“We are confident about being able to do a year as good as 2017,” Bennahmias said.

The watchmaker also launched its first online pop-up boutique with Chinese e-commerce platform JD.com Inc on Monday, hoping to tap into China’s burgeoning middle class who are increasingly shopping online.

Swiss watch industry exports to China rose 18.8 percent last year, according to the Federation of the Swiss Watch Industry. Growth this year so far has been even faster.

JD.com, along with rival Alibaba Group Holding Ltd, is expanding its luxury offerings. Last year, it launched luxury platform Toplife, luring big-name global brands such as Saint Laurent and Alexander McQueen.

Bennahmias said JD.com had been lobbying Swiss watchmakers to forge tie-ups with the platform, but he did not rule out the possibility of working with Alibaba, the country’s largest e-commerce firm led by entrepreneur Jack Ma.

“I am waiting for Jack Ma to give me a call,” he said.

Chinese luxury sales had stalled under a government campaign against shows of wealth among public officials, but are now gaining momentum on the back of growing purchasing power of China’s middle class - in part driven by younger shoppers and online sales.

Luxury goods sales in China hit 142 billion yuan ($22.55 billion) last year, up around 20 percent from the year before, the sharpest growth since 2011, according to consultancy Bain & Co.

Bennahmias added the firm, which produces 40,000 watches a year, could look to export the e-commerce model outside China if successful and would slowly ramp up its watch output.

“We want to remain very exclusive, and 40,000 is a good number. Maybe within the next three to four years we are going to increase to 44,000 or 45,000,” he said.

($1 = 0.9571 Swiss francs)

($1 = 6.2974 Chinese yuan renminbi)