Market Focus Romania: Part 2

October 2005

Art galleries
For older watches, destined for either collectors or for people of modest economic means, there are specific art galleries in Bucharest to meet these needs. A large variety of products is offered, but the best selling pieces are office clocks that have become true art objects, made in wood or in various types of metal. The watches, produced several decades ago in Switzerland, Germany, and France, are in perfect working order and their prices vary from 30 to 4,000 euros. The most coveted pieces are made by Patek Philippe and Vacheron Constantin. With prices ranging between 2,000 and 4,000 euros, these pieces are rarely found in the galleries. Extremely rare are Rolex timepieces made in platinum and diamonds, whose prices can reach as high as US$ 100,000. The loyal clientele of these art galleries also appreciate the more modern watches bearing the signatures of IWC and Cartier, as well as Art Nouveau clocks and Boulle office timekeepers. In Bucharest, the most well known of these galleries is called Hanul Cu Tei.

Fake timepieces and the Internet
Besides the products of reputable and established companies in Romania, there are also many counterfeit products circulating on the black market and on the Internet. Customs agents are frequently confronted with counterfeit watch traffic that they confiscate in large numbers on the spot (for example 4,151 watches were found in the bag of a Romanian citizen returning from a trip to Italy.)
Advertisements for the sale of fake watches are all over the Internet. The sellers promise certificates of guarantee for their products which bear the logo of the most famous and coveted brands. Prices vary from 50 to 100 euros. For those interested in buying any of these watches in large quantities, the prices are totally unbeatable: 100 watches for only US$ 350!

Flagship models in terms of sales
The market for luxury products (jewellery watches, perfumes and brand label clothes) is estimated to be more than US$ 300,000 per year in Romania. The target market is made up of more than 100,000 customers whose incomes are between than US$ 300 and US$ 1000 a month and who work for multinational companies.
In earlier times, prices of watches and jewellery varied between 150 and 800 euros, while today these same products are selling between 5,000 and 100,000 euros. On the watch side, the record price was obtained for a Vacheron Constantin timepiece, which was sold for 47,000 euros. According to information provided by the Swiss-based brand, this is the most expensive of its timepieces to be sold in Eastern Europe. For the store that provided this particular watch, the challenge now is to sell a different Vacheron Constantin model for 130,000 euros. In this arena, the customers are most likely to be politicians, sports figures (especially soccer players) and artists.
Men generally purchase watches, who also buy jewellery and watches to offer to the ladies in their lives. In addition to the inhabitants of the nation’s capital, important clients live in the western part of the country, espec-ially in the Banat region.
The best period for selling luxury products is just before the holiday season at the end of the year. In the Moldavia region, watch sales saw a boom immediately after the New Year festivities, when people who worked abroad returned home. Good sales periods are also at the end of summer, when people who work in Italy are on vacation. On the other hand, in the nation’s capital, sales decline after the holidays.
At the top of the watch preference list for Romanian customers is Tissot (40% of the market), followed by Longines, Rado, Certina, Baume & Mercier and Hermès. For the best stores, products from prestige brands exceed 50% of sales.

In addition to the small contribution from artisanal creators, watch production is essentially carried out by the enterprise Victoria, based in Arad. Founded in 1970, Victoria’s production was very significant until 1990, with about a million watches per year. Starting in 1993, the company saw a definite decline, following a fall in the demand for table clocks. The decrease in production, the company’s debts and deficit marketing all led to a nearly tragic situation.
In December 1999, the company’s stock was purchased by BAPD and, after major restructuring operations, which involved the reduction of a third of the work force, Victoria today is one of the most important produ-cers of alarm clocks and quartz wall clocks as well as timekeepers used in chess competitions in Europe. It carries some sixty different models. The offer is also diversified by the production of Unijet and Multijet counters and component parts for the energy industry. Distribution is primarily aimed at foreign markets, especially Germany, Portugal, and England. The new management team has also begun collaborating again with the Hungarian enterprise Orex and has started distribution in that country. The Romanian market only absorbs about 10% of the total production, which is about 180,000 to 200,000 watches per year, in comparison to a production capacity of a million watches. The company’s management remains convinced that it has a future in its niche of products and that it will be successfully reborn. Besides Victoria, other watches have been produced under the labels Mefin and Optimex in Romania.

In the forthcoming days, the rest of this lenghty survey will be added to our europastar website.

Market Focus Romania: Part 1
Market Focus Romania: Part 2
Market Focus Romania: Part 3
Market Focus Romania: Part 4

Source: August - September 2005 Issue

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