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Managing Asia

Why this luxury retailer isn’t in a hurry to woo China

Patek Philippe: Expanding slowly in China

While global high-end brands are stepping up the battle for Asia's burgeoning luxury shoppers, Geneva-based watch manufacturer Patek Philippe prefers to keep things slow.

"We don't want to put all our eggs in the same basket so we are very careful not to increase too much in Asia," Philippe Stern, honorary president of the 175-year old Swiss firm told CNBC's "Managing Asia ".

"[Our Asian business] started in 1966 Japan, which was a booming country where we could have sold plenty but we slowed things down. Japan was almost seeing 30 percent of sales but I said no more and today, it is the same thing for Asia. [Sales] may go up to 32 or 33 percent but it is never going to be much higher," the third generation owner of the business added.

Read MoreTough times for luxury retail in China

Europe currently accounts for half of Patek Philippe's sales, while Asia makes up nearly 30 percent. The prestigious brand, whose luxury watches fetch more than $5 million apiece, is known to be the last family-run Swiss watchmaker from Geneva.

The company recently launched its second "Maison Patek Philippe" in the capital of one of the world's most coveted luxury market – China. Unlike the aggressive expansion taken on by its peers, the watch retailer has just three other stores in the mainland since entering the market in 2005.

Patek Philippe products are displayed at a watch and jewellery fair in Basel, Switzerland.
Harold Cunningham | Getty Images

"Everybody told me: 'You're crazy! This is a fantastic market, you should be everywhere!' People were running into China to open many stores [but] they were going through dealers and not controlling them… I didn't want to do that because Patek Philippe is special," said Philippe.

"To be frank, China is not an easy market. We have to grow step by step to be sure that what we're doing is right so we decided only to open in Beijing and Shanghai and I think it was quite wise," said Thierry Stern, the son of Phillippe and the president of the watch firm.

China's luxury market has taken a hit in recent years as sluggish growth and a crackdown on luxury spending took a toll. When asked if the firm is seeing any negative impact, Thierry said: "The impact is there but it is not massive. Here in China, I've realized that there are some brands that are really known and used as gifts but we're not the top brand in terms of gifting. When you buy a Patek, you don't give it away, you keep it for yourself."

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India? Not yet

While China's once-booming luxury market has eased, its populous neighbor India has been been enjoying stellar growth. According to India's Economic Times, the country's luxury market rose to $8.5 billion in 2013.

But Patek Philippe has no plans to enter India's high-end retail sector, yet.

"Our strategy in India will be the same as China. We want control to make our own Patek Philippe house and we don't want to sell our watches to different retailers. To do that today may be a bit too complicated," noted Thierry.

Read MoreRichemont seeks entry into India's luxury retail market

"India needs a better organization. There's a lot of paperwork, a lot of things which are not easy to do and to be frank, most of our Indian clients are making purchases in London or Singapore," the 44-year-old younger Stern added.

For the luxury brand, doing business is perhaps akin to how it seeks perfection in the making of its timepieces.

"We want to do things in the best way. We don't rush the work because you cannot rush when you want to do it nicely; it takes time," said Philippe.

— Reported by Christine Tan; Written by See Kit Tang