(Yicai Global) June 22 -- LVMH Moët Hennessy Louis Vuitton SE [EPA:MC], better known as LVMH, has again joined hands with an online Chinese firm as its Zenith wristwatch unit begins selling products on Tmall and JD.com.
Its most expensive watch for sale on the sites costs CNY1.72 million (USD251,800).
Zenith follows the lead of TAG Heuer, another LVMH wristwatch brand, which opened flagship stores on Chinese e-commerce platforms. "As a traditional luxury brand, Zenith needs to take new concepts head on," said Zhang Yumin, general brand manager at the company's Greater China division. "The firm is always looking to reach customers in a quicker, more effective way."
Founded in 1985, Switzerland-based Zenith has a long history of making timepieces. Market insiders believe the entire Swiss watch industry ended in depression last year, but since Jean Claude Biver took over as head of LVMH's wristwatch division in 2014, the firm has fared better than its competitors.
"Over the past decade, watchmakers have been raising prices, but not really innovating," said Thomas Chauvet, head of luxury goods equity research at Citigroup. He believes that excessive complacency is the main reason behind the current crisis, alongside companies' inability to adapt to changes in consumer behavior.
Zhang was all too aware of the problem, and noticed that online platforms were becoming one of China's most popular business channels. "Embracing e-commerce is definitely an import step towards bringing the brand back," she said. "It's a natural move in this digital age. Zenith's brand development is beginning to focus on developing e-commerce platforms as part of our online strategy."
TAG Heuer was first to jump on the trend. It changed its brand image completely in China, even taking on endorsements from local celebrities Chen Daoming, Gloria Tang and Li Yifeng. It also reduced the price of its flagship product and launched smart watches to keep up with the latest technology trends.
However, it's unclear if Zenith, which positions itself higher and charges more than TAG, will be able to fully take on e-commerce platforms. Some see its USD250,000 watch as somewhat a gimmick online, but the attention it brings only stands to increase brand awareness for the company.