Focus on Latin America – Interview with Carlos Alonso

October 2012

“Regional salons such as the SIAR are an effective counterpoint to the natural limitations of BaselWorld and the SIHH Watch Fair”.

A few days before the 6th SIAR (Salón de la Alta Relojería) fine watch fair in Mexico City, Director Carlos Alonso made time in his schedule to answer a few questions from Europa Star.

Focus on Latin America – Interview with Carlos Alonso

Europa Star: Mr Alonso: What are your thoughts on the latest SIAR watch fair?

Carlos Alonso: The sixth edition of the Salon is now a fully mature event, having come through a global crisis in 2007 whose effects, although not so strongly felt in the Latin American market, have been a determining factor in the cyclical change that the watchmaking industry has undergone. The details of the Salon have been refined over the previous five editions, culminating in this year’s event. Today everyone involved in the Salon knows what it is about and what they can expect from it. The proof is that more than 20 CEOs of exhibiting companies will be attending. The SIAR has consolidated its position as the biggest fine watch fair in Latin America, and has laid down a firm foundation on which it can continue to build in the future.

ES: Do you believe the SIAR has become a global reference for fine watchmaking in the Latin American region?

C.A: Clearly, the SIAR in Mexico City, along with the SalonQP in London and the Salon Belles Montres in Paris, are the top three regional fairs internationally. They each have their own characteristics, but all three are recognised for their effectiveness in promoting the interests of the watchmaking industry. Proof of this is the partnership that the FHH (Fédération de la Haute Horlogerie), standard bearer for the Swiss watchmaking industry throughout the world, has concluded with all three events. The SIAR, like the two other fairs, shares the international mission and philosophy of the FHH; it has proved to be an appropriate sounding board for the achievements and innovations of its partners in a global context where the Swiss watchmaking industry continues to set the pace.

ES: What role do independent watchmakers play within the SIAR, and what influence do they have compared with the major watchmaking groups?

C.A: Throughout its history the SIAR has positioned itself as an ideal framework to complement the positioning strategy of both established and independent brands looking to reach out to a discerning and well-informed clientele in Mexico and Latin America. SIAR exhibitors include long-established firms as well as independent designers, who use such fairs as a launch pad to gain visibility more rapidly than going through traditional channels would permit. Paradoxically, in the case of independents, they often reach the conclusion that these markets are not yet ready for them. And all this takes place in a climate of dialogue between designers and the public, without any of the background noise typical of global events like BaselWorld and the SIHH Watch Fair, which are intended more for professionals and the media.

ES: Could you tell me what is unique about the tastes of the Latin American market in general, and the Mexican market in particular?

C.A: There are two main trends. On the one hand, particularly in Mexico but also in Argentina and Brazil, the three most mature markets, there is a high level of understanding and enthusiasm for fine watchmaking, dating back to the 19th century, which has strengthened the major classic brands in the collective unconscious. Added to this, in recent years we have seen the emergence of an economically very influential class who view luxury items as status symbols, and tend to gravitate towards the sensational and exotic, the latest thing in movements, fashionable materials and more design-led developments. This is very much in tune with the Latin “fashionista” aesthetic. But the ranking of brand preferences is not much different from what we see in other mature markets.

ES: What do you think is the greatest challenge facing fine watchmaking companies in Latin America?

C.A: The market offers a complex distribution environment which is an uncomfortable fit with the philosophy of luxury as we would understand it in Europe or Asia. There is wealth, of course, there is a passion for fine watches, and sales are growing, but sometimes there is just not the right context for luxury, as the brands would like to see it, with some exceptions. This is not at all a criticism of the local retailers and distributors, who reflect what markets such as these can sustain. But companies operate over the long term, which is at odds with the short-term focus of local distribution networks, and this is why the stronger brands are hoping to accelerate the process of vertical integration. There is an acute shortage of retail staff with the necessary specialised knowledge, and also a very volatile labour market. To deal with this, some major companies are setting up training departments that will reach out to distributors and retailers on their own premises. The SIAR, which offers the prospect of a regular cycle of conferences, enables both consumers and those who work with retailers to learn about the watchmakers’ sales strategies, and find out what is on the horizon. Improved staff training will bring about greater convergence between the Latin American market and how luxury goods are presented in Europe and Asia. This is a vital step, regardless of whether or not vertical integration of distribution ever becomes a reality.

ES: Is the Latin American market still influenced by other markets such as China and North America?

C.A: Clearly, global markets are interdependent, and Latin America is a leading player in globalisation. China buys oil and raw materials in the region, adding considerable liquidity to the Latin American market in return for gaining a foothold, just as it does elsewhere. Latin America is no longer just a back door to the USA, but an economic player in its own right, which can mobilise interests on its own account. It is reaching maturity as a global regional hub; it has its own characteristics but is a fully independent market. It is telling that Goldman Sachs predicts that Brazil and Mexico will be the fourth and fifth biggest world economies by 2020.

ES: Is Miami a major influencing factor in terms of distribution?

C.A: The position of Miami, a major Latin American capital on US soil, gives companies the ability to maintain an operational centre that is economically insulated from regional instability. For instance, some companies have decided to pull out of Argentina to avoid dealing with the barter system that the government has recently imposed on luxury imports, and this is easier if you have a base in Miami. It’s an absurd situation when luxury goods companies are obliged to export Argentine goods to a value equal to that of the items they are bringing into the country. Or take the case of Brazil: it imposes tariffs of up to 80 per cent of the value of luxury goods, while at the same time allowing the creation of free trade areas like Manaus, which churns out fakes that flood regional markets. For all these reasons, Miami will continue to be a necessity for international luxury brands, until such time as the region can harmonise its private and political interests with the internationally accepted rules of engagement.

ES: What is the future of the SIAR, within the context that you have briefly outlined?

C.A: The SIAR is an effective and established reality. It is currently the only fine watch fair of reference in the region, and it will continue to evolve as a partner in promoting the interests of the watchmaking industry throughout the American continent. It perfectly illustrates the strategy: “think globally, act locally”. I believe that regional fairs like the SIAR are the way forward. They have a unique energy, they act as local ambassadors for fine watchmaking, and they are an ideal counterpoint to the natural limitations of BaselWorld and the SIHH Watch Fair.

See the other articles in our Focus on Latin America:

Source: Europa Star October - November 2012 Magazine Issue