Managing Asia

Watchmaker Philip Stein isn't afraid of smartwatches

Reporting by Christine Tan | Written by See Kit Tang
Tuning into the affordable luxury segment

The age of smartwatches — including the Apple Watch — has largely been seen as a time bomb for traditional watchmakers, but for Switzerland-based Philip Stein, it's a blessing.

"The Apple Watch [targets] a completely different market – people who like gadgets. But our watch isn't a gadget," Will Stein, co-founder and president of Philip Stein, told CNBC's "Managing Asia."

"Our watch is a well-being accessory, which has thousands of testimonials to prove its effects," he added.

Will Stein, co-founder and president of Philip Stein.

The 13-year-old affordable luxury brand claims its time-keeper offers a type of "Natural Frequency Technology" that promotes better sleep, reduce stress and enhance energy for the wearer.

"The metal disk in every Philip Stein watch is programmed to function like a finely-tuned antenna which picks up the natural frequencies surrounding us and channels [them] into our bodies for our benefit. This is beneficial because we are surrounded by man-made frequencies [from objects such as electrical appliances] which create somewhat of an imbalance in us," said Stein. He said clinical studies conducted in 2009 confirmed the benefits of the company's technology.

To be sure, it isn't clear how much the devices actually help with sleep — Amazon reviewers, for one, gave very mixed report cards.

But Stein expects potential health benefits to distinguish his watches from the new entrants.

"Smartwatches are tracking devices which track and measure a person, but that's not what we do. Our watches with our technology create the results these smart watches measure. So, smartwatches are not a threat to us. We actually see it as a blessing," he said.

Philip Stein

Global expansion

Apart from the U.S., where Philip Stein gained a huge following after television mogul Oprah Winfrey propelled it to stardom, Asia is another key market, accounting for nearly 30 percent of its annual sales. The watch label sells 70,000 watches worldwide per year.

Within the region, the Philippines is the most important market, contributing 60 percent of the brand's growth in Asia.

Currently, the label is looking to grow its footprint, with the company searching for a local partner or distributor in China.

Despite Beijing's clampdown on corruption – which has cut into the sales of high-end goods – and a persistent slowdown in the world's second-biggest economy, the watchmaker believes it can "make a big splash" in the mainland based on its unique positioning. Philip Stein aims to open 200-300 stores within two years in China – one of the world's most coveted consumer markets.

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"We believe now is the time for us to go into China, even though Swiss watches are experiencing a big downturn in Asia, probably due to the anti-graft campaign. But, we're not affected because we are not a luxury brand. We are a well-being accessory and that opens a door for us to enter China because Chinese in general are very much into healthcare," Stein said.

However, the co-founder is less confident of the brand's prospects in Europe, which remains the traditional stronghold of Swiss watchmakers.

"We are slowly getting into the Swiss market where we are based, but Swiss watch brands remain very powerful in Europe, especially in one of the largest European markets, Germany. Being born in Germany, I know that Germans are extremely skeptical, so it will take time for them to adapt and understand what we are doing," he told CNBC.

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