28 June 2017
Soviet Era Watches Given a Big Hand by New Brand Owners
Could several long-neglected Russian timepiece brands be the unlikely beneficiaries of continuing US/EU sanctions?
For some time now there has been speculation as to the likely effects of the international sanctions and counter-sanctions on Russia's domestic manufacturing and production sectors. It stands to reason that certain industries – such as agriculture, food processing and wine-making (even though the wine and spirits trade has not been sanctioned) – should prosper, driven by enduring demand and a sudden lack of international competition. Less predictable, however, has been the minor renaissance in Russian watchmaking, a sector that has been in decline since the market reforms of the early 1990s.
Despite its rather poor rating on Trip Advisor and the like, Moscow has been welcoming a growing number of overseas tourists over the past the three years, enough, in fact, to establish it as the most visited of all the European capitals among mainland Chinese tourists.
Traditionally, all such visitors are only too keen to take home souvenirs of their travels, with Moscow's busy Arbat Street often their chosen shopping venue. Tellingly, amid the thoroughfare's expected array of painters, street performers, cafes and travel memento emporiums, there are now three shops specialising – if their signage is to be believed – in the sale of "Russian Watches".
Step inside and the unwary visitor is just as likely to find cheap replicas of Russian Army watches as the latest offerings from Raketa and Pobeda, two of the country's most well-established watch brands. To be fair, both of these domestic manufacturers produce well-designed timepieces, available in a choice of automatic or mechanical models, with several of them featuring one of the more affordable quartz movements.
According to the sales staff, however, such items only really appeal to tourists, perhaps explaining why they are largely only available in outlets close to the prime visitor sites in Moscow and St Petersburg. For their part, most middle-class Russians still aspire to a Swiss timepiece or, at least, a close Japanese equivalent.
To many native Russians, the two brands remain synonymous with Soviet times, alongside several other venerable USSR watchmakers, including Polyot, Luch and Slava. Until very recently, these old watches were largely kept as family mementoes, token reminders of an all but vanished time. It is interesting, then, to look at the thinking behind the revival of at least two of these brands.
This return to glory seems to have begun when the original Petrodvortsovy Watch Factory was acquired by a team of Swiss and Russian investors. This saw the facility, set not far from St Petersburg and originally established under the terms of a 1721 decree by Peter the Great, the then Tsar of all Russia, restored to its original purpose.
The site now produces both the high-end Raketa brand and the more affordable Pobedas range of watches. Firmly aimed at the premium end of the market, Raketa watches sell for between US$650-2,600, while a Pobeda timepiece can be picked up for $100-250. At present, the watches are available in a number of multi-brand stores across Russia.
As a sign of the brand-owners' ambitions, the company has just invested in a prestigious new retail outlet in central Moscow. Tellingly, this saw it opening the first sole brand flagship store on Tverskaya Street, the Russian capital's most prestigious shopping destination for would-be purchasers of jewellery, high-end fashion and premium lifestyle brands.
As yet, no international expansion plans have been formally announced for the two revitalised watch ranges. It is, however, thought unlikely that the brand owners – as with the companies behind many other Russian products – will pass up on the opportunities on offer when the football World Cup comes to Russia next year.
Roll back some 50 years and Soviet-made timepieces were still held in some regard, with Raketa receiving an international award as the then-thinnest mass-market watch ever made. Whether such renown can be regained at a time when comparatively few wear watches – except the smart variety – is something that is hard to assert with any real degree of confidence.
In terms of opportunities for Hong Kong-based distributors and manufacturers, the rising interest in watches of Russian origin could well stimulate the market for licensed products produced under the name of other former Soviet brands. Possible candidates here include the defunct Zvezda range and Sekonda, a now British-owned marque that has been manufactured in Hong Kong since 1993.
Leonid Orlov, Moscow Consultant