Reduced taxes to boost luxe spend: Rado

MUMBAI: The trade agreement between India and the European Free Trade Association (EFTA) will allow Swiss luxury watch brands to offer more competitive pricing in the South Asian country, widening their appeal, said Adrian Bosshard, CEO at Rado which counts India as its biggest market, surpassing top luxury spenders China and the US.The trade pact under which India will reduce basic customs duty on Swiss watches, bringing it down to zero over a seven-year period will also compensate companies for currency losses (fluctuations in currency rates can erode earnings for exporters), Bosshard said. “I am very happy we were able to sign this agreement with India as step-by-step, taxes will be reduced. When you take out high taxes from a product, it’s definitely an advantage, without a doubt.

It’s easier to buy luxury goods in places like Dubai, Abu Dhabi and Switzerland because of lower taxes,” Bosshard told TOI in an interview.For Rado, India has been recording a double-digit growth rate every year on the back of a broadening consumer base—while the firm’s old patrons continue to shop for its statement watches, the younger lot too is splurging on the luxury brand, many of whom are spending on its entry range collection starting at about Rs 1 lakh.

“They are largely young working professionals who perceive a watch to be more than just a device displaying time—it’s an “experience, a statement,” Bosshard said.“This growth has come despite our distribution being at the same level. It is coming from the fact that more and more Indians can afford our watches due to rising purchasing power. India has a young, ambitious and hard-working population which is entering the luxury market,” said Bosshard.

The brand’s local young shoppers in fact, are even spending on its more expensive selection such as Captain Cook which usually comes with a price tag of over Rs 2 lakh.

The pre-Diwali sales in Sept have been very strong for Rado and the brand hopes to maintain the same trajectory for the festival-heavy month of Oct.The China market, Bosshard said, is still quite challenging for the luxury segment although the region seems to be stabilising gradually. The 39% US tariff on Switzerland came as a “big shock”, Bosshard said, adding that he hopes the rate can be renegotiated and brought at a level similar to the European Union which has been taxed at 15%. “We have a local US subsidiary and we were able to build up stock locally before the (tariff) decision was taken.

That has helped us in the short term,” Bosshard said. Rado has raised prices in the US market but its sales have not been impacted given the scale and purchasing power of the market.