Tianjin Sea-Gull Watch

October 2010

“By volume, we are the largest producer of automatic movements.”

Located 30 minutes by fast train from Beijing, Tianjin is the oldest industrial city in China. Add another 30 minutes from the station by car and you will arrive at Sea-Gull, the oldest watch manufacturer in China. Europa Star paid a visit to this watchmaker and was welcomed by its General Manager, Jian Wang.
But let’s go back a couple of years to BaselWorld 2008, when two very angry men rushed into theSea-Gull stand located in Hall 5 and declared, “You have violated our patents in your double tourbillon!” When called before the commission for intellectual property, the whole affair fell apart in a few minutes. “This calibre is totally original,” concluded an independent and impartial expert. When their complaint was dismissed, the accusers took up the counter example of the Chinese ‘copy watch’.
Founded in 1955, Sea-Gull was born out of the idea that, after having spent centuries repairing movements, the Chinese company could very well produce them. Sea-Gull launched the first Chinese watch, the first Chinese ladies’ watch, the first ladies’ chronograph, and the first Chinese watch for export. In a word, Sea-Gull is very Chinese, right up to the ends of its watch straps.
Europa Star: I have heard that Sea-Gull produces a quarter of the world’s automatic movements. Is that true?
Jian Wang: According to 2007 statistics, out of twenty million movements produced in the world, five million come out of our factories. In terms of volume, we are the largest producer of automatic movements in the world. We supply many brands, but only a small part of our production goes to equip our own Sea-Gull watches.

Tianjin Sea-Gull Watch Mr. Jian Wang, General Manager of Tianjin Sea-Gull Watch holding a double tourbillon watch in his hands. (Photo J.-L. Adam)

ES: So, these movements equip more German watches than Chinese…
J.W.: Exactly. The Chinese automatic watches are generally equipped with the Citizen Miyota 8025 calibre. This is a marketing strategy as well as the consumer culture in China, which tends to favour imported products.

ES: Except for the tourbillons…
J.W.: This is because Japan does not make tourbillons. China has six companies that manufacture tourbillons. They are located in Shanghai, Beijing, Hangzhou, Dandong (Liaoning Watch Factory), Guangzhou and Tianjin (Sea-Gull), but in terms of quality, diversity, technology and production, Sea-Gull is the primary one. In fact, we are the only ones to produce certain types of tourbillons. To our knowledge, Sea-Gull is one of only three brands in the world to offer a range of ladies’ tourbillons.

ES: Your tourbillon is similar to that of Breguet. What are the differences?
J.W.: In distinction and development, the Breguet- calibre is undeniably more refined. As to their operations, the two are identical. In terms of finishing, our tourbillon has the traditional Chinese style of more rounded and softer lines.

ES: In 2009, you sold 300,000 watches. What are your business goals for the future?
J.W.: Our objective is to make one million watches per year within five years. To this end, we would like for the Chinese people to take pride in wearing a Chinese watch and to understand that Sea-Gull is an authentic manufacturer that has been producing its own movements for many years.

ES: Do you plan on keeping the single brand Sea-Gull or will you create others?
J.W.: The creation of watches for different categories of consumers is part of our strategy in order to better exploit our formidable production of mechanical movements and thus be able to offer the Chinese people their own quality timekeepers.

ES: This is quite honourable, but the Chinese are very fond of imported brands. They don’t seem to hold local brands in very high esteem. Why would they suddenly change their minds?
J.W.: With the expansion of the Chinese economy, we are noticing a gradual return in interest to prestigious national products. Of the 5,000 Sea-Gull tourbillon watches sold in 2009, for example, 99 per cent were purchased by Chinese consumers.

ES: Wouldn’t they first buy a tourbillon before buying a Sea-Gull?
J.W.: It is fifty-fifty. Some people choose the brand because it is the oldest and is known to several generations of Chinese. They are proud of the growth of Sea-Gull. In the short term, we are aiming to sell 10,000 to 15,000 tourbillon timepieces per year.

ES: Tao Li, CEO of Ebohr, announced the upcoming launch of a range of ‘low cost’ tourbillon watches, with prices starting at 10,000 yuans (1,158E). Is there a market for this? (see ES 3.10)
J.W.: Yes, absolutely, even if, for a Chinese watch, the sum of more than 10,000 yuans represents the luxury sector. In any case, Sea-Gull has positioned the tourbillon in a higher category. I am not sure if Ebohr sells more tourbillon watches at 10,000 yuans (1,158E) than we do at 30,000 yuans (3,475E).

ES: Why is that?
J.W.: Because the psychology of the tourbillon aficionado is different from that of the lambda purchaser. His demands are greater and he primarily wants the movement to be produced by the brand itself. These enthusiasts are well informed and they know that neither Ebohr nor Fiyta make their calibres themselves.

Tianjin Sea-Gull Watch The model ST8080GB with a double tourbillon in platinum (38.98 grams), 40-mm diameter, 9-mm thickness, alligator strap, white gold clasp, sapphire crystal and case back, water-resistant to 30 metres.
The model ST8004ZA with a tourbillon, 316L stainless steel, date and retrograde day, 40-mm diameter, 9-mm thickness, alligator strap, sapphire crystal and case back, water-resistant to 30 metres.
The model 182SK (available in black, red, or blue), automatic movement with balance, skeletonised dial, stainless steel case, 38.5-mm diameter, 10-mm thickness, leather strap, water-resistant to 30 metres.

ES: Again according to Mr. Tao Li, the six Chinese manufacturers of tourbillons possess large production facilities that they are not able to exploit for their own brands. Fiyta and Ebohr, two heavyweights in Chinese timekeeping, would thus help them to achieve this…
J.W.: Our studies of Chinese consumers have revealed two things. First of all, their watch culture is still quite lacking. Those who have heard about grand complications are very rare. Secondly, they would not conceive of investing 10,000 yuans for a domestic watch. To sell a luxury ‘China Made’ timepiece, it is imperative to have an appropriate sales network that Ebhor does not have. On the other hand, Fiyta could succeed in this domain since it owns a chain of multi-brand luxury stores. Ebohr produces popular watches with a wide distribution network but its clients are not about to put 10,000 yuans on the table, not even for a tourbillon.

ES: Sea-Gull certainly enjoys a more upscale image. Yet, although it has its own chain of single-brand stores, these can be counted on the fingers of two hands…
J.W.: Yes, and there is a reason for this. We have revolutionized our sales techniques, but without ignoring retail sales. We believe in ‘sales circles’ for our target clientele, which is composed of collectors, government officials and business owners.Sea-Gull invites these influential people to a pleasant setting, such as a restaurant, to present the range of watches. Some of them will fall in love with a piece and purchase it for themselves, feeling proud to wear a lovely mechanical timekeeper from a Chinese brand. Then, by word of mouth, the circle grows as they talk about the watch with their entourage. In our societies where there is way-too-much information, the recommendation from a friend becomes an increasingly important argument for a brand. In three years, we have created more than one thousand ‘sales circles’.

ES: While Sea-Gullwatches are certainly el-egant, they are too classic to attract a younger clientele, one that follows fashion trends. Do you think you will reach your goals by making this a snob purchase?
J.W.: For a brand as conservative as Sea-Gull, the production of fashion products represents a new challenge. For the high-end, however, we will maintain our traditional style. On the other hand, we will modify the design of our mid-range pieces, which sell at around 3,000 yuans, to target the 25 to 30 year-old age group. A few models are already on the market. They are skeleton pieces with colour.

Tianjin Sea-Gull Watch The model ST8400VLGA ‘Pure Lady Tourbillon’, in an 18-carat pink gold case measuring 40.1 mm by 29.6 mm, bezel set with natural precious gemstones, alligator strap, sapphire crystal and case back, water-resistant to 30 metres.
Sea-Gull- Tourbillon, identical to the Breguetmodel, but with a resolutely Chinese style.

ES: During BaselWorld 2008, Sea-Gullwas the victim of a small scandal. Would you care to comment on that?
J.W.: Two men from a then-independent brand, which has since been acquired by the Richemont Group [Roger Dubuis] came to our stand and rudely accused us of having violated a part of their patent in the creation of our double tourbillon. We were distraught because of the suddenness of the complaint and the problem of communication. We immediately hired a local attorney to represent Sea-Gull in order to negotiate between the accuser and the arbitrage council. That night, we had our China-registered patent as well as the many plans of the calibre sent to us in Switzerland. A 70 year-old master watchmaker, formerly with IWC, was the expert in the case. After having leafed through the documents and having examined the watches for seven minutes, he declared, “There is absolutely no similarity between the two systems.” Later, the elder gentleman congratulated us for our double tourbillon and added, “Sea-Gullis becoming the main competitor to the Swiss watch industry.” This was also the first time, since the opening up of China that a Chinese company had won a foreign legal proceeding against a foreign company. This created shockwaves that travelled across China and the World Intellectual Property Organization.

ES: Why, in your opinion, was there so much virulence in this attack against Sea-Gull?
J.W.: Switzerland is the kingdom of watchmaking and it wants to remain so for eternity. Never, will it accept to be in second place.

ES: But you can also understand the frustration of the Swiss with Chinese counterfeit watches. These two men simply put Sea-Gull into this pirate industry category…
J.W.: Fakes are not only from China but also from India and Russia. In fact, they are made wherever movements are produced. Why are Swiss watches always copied? Because they are the best and they sell very well. Yet, we must also mention that Swiss watch companies never enter into any joint ventures with non-Swiss companies because they absolutely do not want to share their technology. In an open world, this attitude is exasperating.

ES: But they want to protect the ‘Swiss Made’ label…
J.W.: In this regard, negotiations are being held between China and Switzerland since Switzerland wants to enter the Chinese market duty free. And, as we know in reality, many Swiss watches are not produced in Switzerland. Your government must absolutely strengthen the ‘Swiss Made’ term. This is, moreover, a prerequisite condition demanded by China.

ES: We should mention that Sea-Gull also suffers from counterfeits.
J.W.: In fact, Sea-Gull is in conflict with itself. On one hand, it supplies movements. On the other, it is a watch brand. But Sea-Gull could never absorb by itself its enormous production of calibres. And, as soon as it sells movements to third parties, it inevitably falls victim to fakes.

Tianjin Sea-Gull Watch The ateliers of Sea-Gull in its current factory. Soon Sea-Gull will move to the new industrial park in Tianjin, next to the factory of Airbus Industries. (Photo Jean-Luc Adam)
The development offices. Sea-Gull is waiting to move to its new factory in order to modernize the working areas. (Photo Jean-Luc Adam)
This will be the new Sea-Gull factory starting in autumn of 2010. This brand new facility is in Tianjin’s new industrial zone, next to that of Airbus Industries.

ES: To get a foothold in Swiss timekeeping, Fiyta has acquired Montres Chouriet SA and Ebohr is co-founder of the Codex brand in Bienne. Does Sea-Gull have any intentions of purchasing a Swiss brand?
J.W.: At the current time, we have no plans linked to a Swiss brand. However, we are investing in a Swiss movement company that, thanks to the experience of its watchmakers, will allow us to improve our Sea-Gull movements and attain the ETA standard.

ES: In regards to the Sea-Gull brand, it has not always been known by this name, has it?
J.W.: This name was chosen in 1974 because that was the date when we began exporting watches. Earlier, the brand was called Dong Feng (East Wind) but that was not very international, and it also had strong political implications. (Mao had given this name to a number of companies following his anti-occidental slogan of “the east wind blows stronger and longer than the west wind.”) We wanted an English name and the seagull is a bird capable of flying great distances and therefore one that can carry our brand very far.

Source: Europa Star August - September 2010 Magazine Issue