At a time when consumers are tightening their belts amid political turmoil and economic uncertainty, luxury-watch sellers are trying to generate the kind of exuberance that encourages consumers to part with piles of cash to wrap a brand around their wrist.

"We're confident that such a delightful event will bring an end to the unhappiness caused by the economic slowdown and politic uncertainty," said Saridpong Rattanapote, chief merchandiser at The Mall Group, which runs Siam Paragon - the fair's venue.

The daily stream of bad news about the economy and the political situation in newspapers is overwhelming people, Saridpong said.

A big event that sparks delight will certainly draw attention, he added.

The fair opened on Thursday and will run until August 14 at the upscale mall.

It is showcasing watches from 150 luxury brands with an accumulated value of Bt3 billion. The fair is expected to draw more than 100,000 visitors and achieve sales of Bt400 million.

"People still have high purchasing power, but they're no longer in the mood to shop because of various negative economic factors and political uncertainty," said Naran Thammawaranukupt, the vice president of Prima Time Co. Nonthiwat Praphanont, the managing director of Macro Rich Co agreed that consumers still had high purchasing power.

The problem is that they are no longer in the mood to shop because of the constant stream of bad news about the economy and the political situation, they said.

They agree that watch fairs and marketing activities by retailers and malls would provide a boost.

Swatch Group (Thailand) managing director Christophe Viguerie, who oversees the sale of 12 middle- to high-end watch brands, also said negative economic and political factors were having a psychological effect on consumers.

"They're unsure about the country's future, so some prefer to save money in banks. Also, they are taking longer to make purchasing decisions to ensure they get enough value," Viguerie said.

"All these psychological impacts can be overcome by the right methods," he said.

Retailers like Muang Thong Seiko, Prima Time and Bachtold - who say they achieved their financial targets during the first half - plan to break the psychological resistance to shopping with marketing campaigns so they can meet their full-year targets.

Tag Heuer said it is confident its sales in Thailand will rise 30 per cent this year after expanding 20 per cent last year.

The firm, however, declined to disclose sales figures.

Many luxury-watch sellers do not provide sales figures, or are quite vague about them.

Muang Thong and Macro Rich both say they expect sales growth of 10 per cent this year. Bachtold expects sales to reach Bt1 billion.

Swatch Group and Macro Rich admit they will have to work hard to drive sales, after hitting unexpected bumps in the second quarter.

"We saw a sales impact on middle-end watches to a degree and some impact on high-end watches," Viguerie said. Swatch gained few customers during the quarter, resulting in a lower growth rate than it saw in the second quarter of last year, he said, declining to reveal the sales figures.

Macro Rich blamed a drop in sales on the abundance of holidays in April and March.

Marketing activities for luxury watches are set to intensify during the second half of the year, executives say.

Viguerie said brands with a long marketing history, strong awareness and trustworthiness will have an advantage over new brands and those with low profiles.

Consumers are paying more attention to the materials watches are made of and their quality, he said.

Sellers of the Corum brand are trying to turn it into a social event.

They have unveiled the Corum Forum Club, which allows customers to mingle and "share the Corum experience".

Despite the gloom, Ultimate Time Co is planning to launch a new brand, Balmain. It already sells two fashion brands - Hong Kong's OEM and the American brand Levi - and two high-end Swiss brands, Edox and an earlier Balmain. Ultimate Time is also rebranding its Edox, which will be relaunched in October with a sportier, more complicated look.

Felix Yap, regional manager for Ultimate Time, said the current economic situation provided an opportunity to gain brand recognition because other retailers were slowing down their marketing activities.

The risk that the Balmain brand will fail is low as it is an expensive brand and the current market still has two strong segments - luxury and fashion watches. Ultimate Time expects sales to rise 100 per cent year on year, Yap said.

Swatch Group's Viguerie was less confident than Yap, saying it was too early to tell whether full-year sales targets could be met by retailers or brands. Swatch is carefully monitoring sales at the fair at Siam Paragon for signs of market trends. It is hoping for a sales boost at another fair next month and during the high-end season late in the year.

Nitida Asawanipont

The Nation