On June 23, Baselworld's Managing Director Michel Loris-Melikoff announced that what was once the world's number-one watch trade show is making a comeback.
While Loris-Melikoff insists the Baselworld brand needs to be preserved, albeit as a fundamentally changed platform, it still remains to be seen how the organizing MCH Group will be able to achieve their goals. The most important question is whether someone still needs this kind of event in the market. The main changes will see the trade fair go hybrid as the first independent platform to combine digital and live events, and the new Baselworld won't rely on market leaders or the luxury heavyweights anymore.
It will primarily be a B2B platform in the mid-range luxury segment. This could be questionable positioning. First of all, mid-range brands that came to Basel in the past were mainly attracted by the synergy effect of having an exhibition stand next to the leaders in luxury. Will they be attracted to a trade show where there'll only be watchmakers on the same level as them and who position themselves similarly?
Secondly, the mid-range luxury segment isn’t going through the easiest of times right now either. Analysts from McKinsey noted a mid-market squeeze from serious competitors, with smartwatches to one side and premium to ultra-luxury watches on the other. According to the results for 2020, the Federation of the Swiss Watch Industry noted the sharpest declines in watches priced for export at less than 500 CHF (you need to at least double the export price to calculate the retail price).
The latest report on Swiss watch exports confirms this downward trend. The number of pieces exported from Switzerland within the 0-200 CHF price category plummeted 43.5%, with the 200-500 CHF category down 40.8%. For comparison, the price category for watches priced at over 3000 CHF only fell by 0.3%. The exhibition's focus is still on networking with business partners.
According to Loris-Melikoff, the exhibition will be held from March 31 to April 4, 2022 and should offer a platform for manufacturers to showcase their new products to distributors and retailers. At the same time, the 2021 McKinsey report also highlights direct-to-consumer business models among the trends for the watch industry's development. Manufacturers are increasingly reaching out to their customers independently through their own boutiques or online stores.
The most prestigious brands no longer turn their noses up at the latter — A. Lange & Söhne have announced plans for online sales. And the financial reports of luxury groups show that their sales network remains a more stable channel than through other retailers. The pandemic has changed a lot about the way partners and customers communicate with each other. Will the strength of the brand's usual venue in Basel still be as important as the MCH Group hopes it will be?
As long as Asian customers remain the driving force behind the growth of the luxury watch market, the Watches & Wonders Shanghai tour appears perfectly justified. Locations are shifting, or even becoming irrelevant with the proliferation of virtual meetings. From this point of view, the idea of launching Baselworld as a year-round platform for presenting products and hosting business events seems to be the key ingredient in this new concept. But this is same idea that was at the heart of the HourUniverse project, which the MCH Group was trying to replace Baselworld with.