Another Baselworld has come and gone in the midst of a torrent of industry speculation about its very survival.
The show is navigating the shifting sands of evolution with its raison d’être under global scrutiny; it is enduring a fractured and partisan review of what it stands for, while the possibilities and outcomes of change are imperfectly understood.
First and foremost, Baselworld is a trade show and the most important one for the watch industry. It’s where brands, buyers and the press congregate for a week to review the new products and give them the publicity they (mostly) richly deserve – even if some of the brand’s policies are a bit ungracious to those global resellers who have served them well over many years.
It provides the only real opportunity to see the finest of Swiss production side-by-side with the quality and volume production from Europe, China and the rest of the world.
And as it happens, the 2019 winnowing of the exhibitors – numbers were down 20 per cent on 2018 – has produced a tighter and more manageable show.
Eric Bertrand, president of the Exhibitors’ Committee, said, “This year’s event marks a fresh start for exhibitors, visitors and journalists.”
Bertrand is convinced that Baselworld will remain the world’s most important meeting place for its industries, covering all categories from watches and jewellery to gemstones and precious metals. “Digital platforms cannot take the place of a physical trade show,” he added.
At a subsequent panel discussion, Chopard’s CEO Karl-Friedrich Scheufele echoed his point, saying, “Baselworld has done its homework. We are heading in the right direction. A personal encounter cannot be replaced by digital formats.”
Patek Philippe’s president Thierry Stern added, “I have a feeling that this will be a good edition. Business is picking up.”
Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry FH, was also optimistic about the future – and based his optimism on solid data, revealing, “The Swiss watch industry’s exports increased 6.3 per cent in 2018. This is likely to exert a positive impact on the trade show.”
However, there are many deep-seated problems that need to be faced by Baselworld’s organisers – and it will take time, money and patience from all the parties participating in this annual event, not to mention flexibility, informed debate and the support of the press.
Following the loss of Swatch last year, special diplomacy will be needed to hold the loyalty of the majors of Hall 1.0 – Rolex, Patek Philippe, Chopard and the LVMH group (Bulgari, TAG Heuer, Hublot and Zenith).
If any of them even blink then the ongoing prospects for Baselworld will be dramatically compromised.
Still, the most intractable issues are cultural, with a significant dose of political intransigence from competing Swiss interests. Baselworld 2020 will commence on 30 April 2020, immediately after the Salon International de la Haute Horlogerie (SIHH) Geneva Salon.
This is a superficial move toward unity, but it will take more than playing with diary dates for the politics to recede, as they should have done 20 years ago.
In stark contrast to the SIHH, Baselworld is actively promoting the public relations exposure of its exhibitors. Management properly recognises that supporting press representatives – 3,300 of which attended the show in 2019 – has been an integral part of the promotional scenario over many years.
It’s part of the reason why trade shows exist at all, and why brands decide to exhibit at them.
In contrast, SIHH has embraced what some have called a ‘film-set pretentiousness’, with the construction and deconstruction of its Carré des Horlogers – once a compelling talking point and publicity tool which is now inflating exhibitor costs far above the equivalent exposure.
Even in these depressed times, Baselworld still represents more than 15 times the exhibitors as SIHH; aligning its dates could lead to defections back to the larger show, and at the very least will make the Geneva Salon look like a minor distraction before the main event.
SIHH – which split from Baselworld in 1991 – would be well served by forgetting the original tiff. There are now empty halls in Basel begging for a useful occupant – and what a wonderful opportunity to slash exhibitor costs!
Speaking of which, the commercial interests in Basel and the MCH Baselworld management need to seriously address price gouging in the city’s hotels and restaurants before anybody will believe there is a new outlook and recovery prospect for the trade show.
For decades, Baselworld has been taken for granted as a local cash cow by the city – population less than 200,000 – and the visitors to Basel have taken it on the chin because they had no choice.
In a brave – if perhaps overdue – move, the MCH attempted to address the price gouging in 2019 but with ho-hum results. Put simply, it did not get taken seriously.
Despite these issues, there are still very strong reasons why Baselworld should survive the current turmoil. The task of restructuring falls to Michel Loris-Melikoff, the new managing director of Baselworld, who has proposed a three-year timeframe for the rejuvenation of the show.
Loris-Melikoff has introduced himself as a watch industry novice, but carries with him many years of experience in event planning and implementation.
Fortunately, we know from years of history that if the event is sympathetically managed, the industry participants will certainly do the rest.
The changes needed have nothing to do with dividends to MCH shareholders, and everything to do with the high standing of the Swiss luxury industry with the cashed-up buyers of the world.
It is only through this industry recognition that there is support for some of the astronomic sums buyers will pay for watches made with quality, history and style.
Would a buyer be more likely to spend say, $50,000 on a high-class watch made in South Asia, or one made in Switzerland? Yet, the Swiss are under much closer scrutiny these days – and not always with positive outcomes. ‘Made in Switzerland’ used to represent exceptional design, trust and value. Does it represent this today?
In a world beset by Cold War-esque posturing, corruption and mistrust, the coming years may produce another round of caution, with buyers bypassing luxury timepieces.
There are also distortions in the market that make long-term assessments a bit pointless – for example, Brexit uncertainty has produced significant forward ordering from UK resellers, as they have reason to believe prices will spike if the political divorce is achieved. But when will that happen, and in what form?
For many reasons it is important that Baselworld’s reconstruction – its ‘Phoenix Moment’ – is successful, as many smaller brands rely on it for taking orders for their yearly production programme.
It will take strength and determination to address the depths of the problems, and we have to hope that Loris-Melikoff is the right man for the job.
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