Swatch Group


Swatch Group: the “vintage & silicon” strategy

INTERVIEW

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October 2019


Swatch Group: the “vintage & silicon” strategy

Mido’s Ocean Star is 75 years old, but its new version, the Ocean Star Diver 600, is equipped with silicon. It’s an embodiment of the Swatch Group’s strategy: to combine vintage designs with new materials and technologies, thanks to the conglomerate’s powerful industrial base. We met Mido’s CEO Franz Linder to discuss the situation.

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vintage face to appeal to new generations, and a revamped interior with silicon to keep up with new technological expectations: that seems to be the new normal in the Swiss watch industry! With a polarised market, where daily life is ruled by digital technology in all its forms, the luxury mechanical watch is experiencing a comeback even stronger than in the 1990s. But not everyone can afford a high-priced independent creation, or an iconic timepiece with a waiting list so long it will be “vintage” by the time you pick it up.

To cater to this trend, the more affordable face of the Swiss watch industry is also increasingly turning to automatic and vintage timepieces (read our analysis about Certina here).. The Swatch Group rules this (increasing) price range, along with some other actors such as Doxa, which has found a new lease of life thanks to the vintage wave read here), and is applying its industrial know-how to create retro-looking designs.

The new Ocean Star Diver 600 by Mido, equipped with a silicon balance spring.
The new Ocean Star Diver 600 by Mido, equipped with a silicon balance spring.

A vintage face to appeal to new generations, and a revamped interior with silicon to keep up with new technological expectations: that seems to be the new normal in the Swiss watch industry.

Mido is a perfect example of what we could call the “vintage & silicon” strategy, which industry leader Swatch Group is alone able to deploy on a large scale. Last year, Mido’s Commander Shade Special Edition sold out during the Basel fair. This year the brand is focusing on the revamped Ocean Star. We interviewed Franz Linder, the man in charge at Mido.

Franz Linder, CEO of Mido
Franz Linder, CEO of Mido

Europa Star: In today’s watch industry, everything seems to revolve around vintage. At Mido, you’re launching a new version of the Ocean Star, a 75-year-old timepiece.

Franz Linder: It goes to show that we can always do better! Our ambition was indeed to produce the best interpretation ever of this timepiece from Mido’s history. And we have delivered: the Ocean Star Diver 600 has improved water resistance, it is COSC-certified and equipped with a silicon balance spring, a ceramic bezel and a helium valve. It’s also an important exercise to look back at 75 years of history: we dug into our archives to find the best possible features for this new creation. It’s a tribute to a vintage timepiece, but not just for the sake of commemoration: we wanted to update it to the current state of technology available in the watch industry.

Swatch Group: the “vintage & silicon” strategy

The Swiss watch industry is experiencing a dramatic fall in volumes, especially in the most affordable ranges: in the first half of 2019, exports dropped by 14.6 %, a fall that represents 1.6 million timepieces. Meanwhile, the average price is going up. Are you tracking this market development?

As a brand of the Swatch Group, over the long term we’re sticking to our price range, like every other member of the group. It’s true that the new versions of the Ocean Star are priced higher than our core range, at CHF 990 for the Ocean Star Tribute and CHF 1,590 for Ocean Star Diver 600. But it is quite logical, given the movement and materials you find in these timepieces.

The Mido Ocean Star “Datoday” in 1967 in Europa Star.
The Mido Ocean Star “Datoday” in 1967 in Europa Star.
© Europa Star Archives
The Aquadura protection system developed by Mido for its Ocean Star watch.
The Aquadura protection system developed by Mido for its Ocean Star watch.
© Europa Star Archives
A very different version of the Ocean Star dating back to 1979, in Europa Star.
A very different version of the Ocean Star dating back to 1979, in Europa Star.
© Europa Star Archives
The resemblance is growing...
The resemblance is growing...
© Europa Star Archives
New versions of the Ocean Star introduced in 1982.
New versions of the Ocean Star introduced in 1982.
© Europa Star Archives

However, this general upgrade also seems a logical step for the industry as a whole, in light of the increasing domination of the Apple Watch and other connected products under the CHF 1,000 mark. What is your assessment of the situation?

I can only speak for Mido: we achieved our best financial result ever in 2018 – it was a record year despite the arrival of smartwatches. This year, the market environment is more challenging, but the global situation is unstable for all kinds of industries, not just watches. Whether smartwatches have a big influence on the Swiss watch industry’s volumes, it’s honestly difficult to say. Connected instruments are technology-driven products, and they are looking for volume, but they are competing within their own range and at a cheaper price point. In my opinion, they’re fighting over a different “cake”! And my guess is that the average price of smartwatches will go down even further.

“Connected instruments are technology-driven products, and they are looking for volume, but they are competing within their own range and at a cheaper price point. In my opinion, they’re fighting over a different “cake”. And my guess is that the average price of smartwatches will go down even further.”

Where are your key markets today?

Traditionally Mido has always been strong in Latin America, but today the great majority of our business is in Asia. There is still room to grow in a large number of potential countries. I can only dream that our brand awareness achieves the same level in Europe in the future as it has in Mexico already. In this country, like in others, the good thing is that the population is growing. But the biggest challenge is to keep Swiss watches in the spotlight of younger generations.

What is your distribution strategy, in terms of online and offline?

The situation differs greatly from one country to another, so we define strategies nationally. In some countries, e-commerce is still a very small element, mostly due to the presence of counterfeits, which damage trust in online sales. On other markets, it’s a fast-growing category. China, for instance, is very well developed in terms of e-commerce. It’s quite amazing. We are present on the two major Chinese platforms, JD.com and Tmall. But we also have more than 800 points of sale and we are present in about 270 cities in the country.

“The biggest challenge is to keep Swiss watches in the spotlight of younger generations.”

What are Mido’s bestselling collections?

Again, it depends a lot on the country. In China, it’s well known that people appreciate very classical, timeless and elegant designs, so the Baroncelli collection performs best there. But in neighbouring countries such as South Korea or Japan, our sports ranges are performing better. And in our key market of Mexico, the Commander collection remains untouchable.

Swatch Group: the “vintage & silicon” strategy

OCEAN STAR DIVER 600 M026.608.11.041.00

Swatch Group: the “vintage & silicon” strategy

In accordance with the ISO 6425 certification, the new Ocean Star Diver 600 is water-resistant to a pressure of 60 bar (600 m), and incorporates a helium valve. Nestled on top of a ceramic ring, the bezel features engraved numerals filled with Super-LumiNova Grade X® – an innovation that allows the diving time to be read with extreme accuracy, whatever the visibility conditions.

Swatch Group: the “vintage & silicon” strategy
© Romina Amato

The heart of this exceptional model presents a distillation of several watchmaking innovations. The Calibre 80 Si, a COSC-certified chronometer movement with a silicon balance-spring, combines an exceptional autonomy of up to 80 hours with extraordinary accuracy and an ability to withstand impacts. Designed specifically for exploring the ocean depths, the Ocean Star Diver 600 is a superlative timepiece.

Swatch Group: the “vintage & silicon” strategy

TECHNICAL INFORMATION

Movement

Automatic Mido Calibre 80 Si (ETA C07.821 base), COSC-certified chronometer, 11½’’’, Ø25.60 mm, height: 5.22 mm, 25 jewels, 21,600 vph, ELINFLEX mainspring, silicon balance spring, decorative disc with transferred Si logo on the balance bridge. Finely decorated chronometer movement with blued screws, oscillating weight decorated with Geneva stripes and Mido logo. Functions: HMSD. Adjusted in five different positions for high accuracy. Up to 80 hours of power reserve.

Case

Satin-finished and polished 316L stainless steel, polished and satin-finished bezel with ceramic ring featuring engraved numerals filled with Super-Luminova Grade X® and a unidirectional blocking function. Ø43.5 mm, two pieces, sapphire crystal with anti-reflective treatment on both sides, screwed crown and case back. Starfish engraved and polished on the case back, helium valve, finely decorated Si chronometer movement, water-resistant up to a pressure of 60 bar (600 m/1968 ft).

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