Cortina is celebrating its 50th anniversary this year, given its history almost as old as Singapore has been independent, their legacy has since it growing from a single multi brand boutique in Colombo court in the 70s into a sprawling regional network in addition to opening Singaporean eyes to Patek Philippe and Rolex. At the height of the pandemic (on the eve of their 50th anniversary), Cortina acquired Sincere Watch for S$84.7 million, which it paid for in cash. Suffice it to say, Cortina’s impact on the Singaporean consumer is undeniable and with Sincere in their stable, their ability to offer a qualitative portfolio of watch brands has made them an undeniable, unavoidable presence in the market.
How do you think cortina has shaped the taste of Singaporean watch consumers?
I think it is more accurate to say that Singaporeans have shaped a retailer to satisfy their need for watches.In the past, there was no information readily available to the general consumer. Today, there’s an abundance of information on the internet.
What we used to do was present uninformed customers in terms of what watches we had and our recommendations based on their preferences. Our role today, is one of enhancing the knowledge of an already knowledgeable customer. This gives us a bit of pressure to keep up as the Singaporean watch enthusiast is seriously passionate and so educated and our sales associates can also be stymied by some of the questions because their training is not so in depth with over 1000 models in the boutique.
Our role has evolved to simply having that watch so that the customer can have a touch and feel, as much as they know about the watch theoretically. Activating the watch functions are an invaluable touch point.
Where a multi brand retailer today is very different from what we were in the past. Service and experience becomes paramount, that is the challenge.
You raise a good point that consumers shape how retailers do merchandising. Do you consider it as part of your responsibility to expose people to more than the brands they are familiar with?
Ultimately, this is two-way communication. There will be customers who are insistent on specific models that it is very difficult to move them from one product of the same brand to another. First, my guys need to be engaging but customers also need to be open to exploring other brands. There are a few categories of consumers – some are really passionate for a specific brand and then there are those who are ready to explore brands they didn’t know of. We do try but we have to be careful because some take offense due to the fact that there are shortages in supply and they think we are trying to divert their attention. We are there to give you a give experience, you don’t even have to buy, just be ready to explore.
For us, the more brands a customer knows, this can be cultivated to more sales because what we can offer becomes more than the two or three brand favourites they usually know. Some will buy for status, some buy for a specific look, some like it for a fact that they are brand loyal. Watch collecting is boundless, it’s more than an instrument of timekeeping. Some even rely on the phone for the time and it’s merely an accessory for the wrist.
In the late 18th and 19th century, the watchmakers were there for a functional purpose. Today, the manufacturers are reviving a craft in terms of the highest specifications of watchmaking with over 200 years of evolution. Today, we are selling art. We are buying know-how.
It’s a status symbol and also it is emblematic of know-how and craft. Yet, there are models today that are increasingly becoming commodities, is that a danger to retailers?
Most brands will have a reference that can appreciate in value immediately after you buy it. As a retailer, my position is that we would rather sell to customers who would enjoy it, not buy it as an asset class, put it in a safe and then it never sees the light of day again. Yes, it is a bit dangerous for retailers. Honestly, any watch, properly worn and cared for will maintain its value over time, you don’t need to wrap it in plastic and be miserable just looking at it. When you do that, you’re not enjoying it, isn’t it just easier to go into crypto? Why go through the process of building a relationship with your retailer just for this? My form of enjoyment is really to try it, wear it and if it increases in value, great. If I can sell it after enjoying it for a while and move on to something else, great.
Is this a growing situation?
There will always be speculators. There will be arbitragers. For a retailer and our suppliers, we want customers to wear their watches and so we try our best to know our consumers. Unfortunately, we can be wrong.
Do you think Singaporean consumers are so advanced that it becomes a type of snobbery stemming from we think we know it all?
Not true. I have met many customers who are not just blindly chasing a few brands. Singaporean collectors are very well versed. They may not dip into it directly but they’re definitely familiar with the more esoteric brands that they’ve simply never seen in the metal because some of these brands come and go. I wouldn’t say that they’re snobbish but maybe they’ve had a bad experience; there was a time when people were buying every brand and the more unknown a brand was, that was the highest status because I had something that no one else knew about and the only one in the room that had it. Then, that specific brand went through a change in management or had poor reliability and then a relaunch left a bad feeling. What is more important is that a customer has to be open to helping them explore but we won’t force you if you’re not open to it. We won’t force you, it’s all about openness.
What do you think gives us such a reputation for advanced tastes even though we have richer neighbors in Thailand?
In Thailand, you are literally looking at the second and third generation of collectors. There’s a lot of influence from old families. Singapore has only been independent for 57 years, I’m second generation, my first generation didn’t even collect watches. Maturity aside, there’s a lot of generational influence. Singaporean consumers are younger and so there is no influence baggage and we can be a little more savvy and open to exploring. This has allowed us to have more advanced tastes even though our neighbors are richer than we are. The new rich in those markets use old money to make new money. In Singapore, the influence happens in reverse with second generation advising their fathers [laughs].
The pandemic hastened digitisation, is this a danger to brick and mortar retailing or do you feel its complementary?
Mr. Porter had Richemont Group as an owner. They had watchmaking maisons to supply the platform, they’re like an online multi-brand retailer. Do they affect us? Let me put it this way, let’s talk about Big eCommerce like Amazon versus a retailer like Apple, which opens grand retail stores even though they do eCommerce. Amazon has also begun to open a few brick and mortar stores. So it’s important to ask the question – why?
Pre-pandemic, it was important to go online. Cortina started in 2018 and now we see the giants going physical, I would say that the effect of this reinforces the strength of physical retail in terms of providing a better brand experience for the customers; Whether to redirect them online to buy is up to each company.
it is my opinion that eventually, it will become a dual play for most industries. It cannot be online or offline. The equation has changed, with online players wanting to bring customers offline and they’re going offline to also bring people online to increase the size of the cake.
Not everyone in the world is going online, there are still people who prefer to go to a supermarket, there are those who still prefer to try on a watch, the hope is to cover the whole experience spectrum. That said, we are not Apple so we rely on our brand partners to attract new customers online and to also bring them offline, so we must have a presence in both. Is Mr. Porter going to open an offline shop? I don’t know but what they have today is convinced more brands to showcase their products online and this allows Cortina to move into their space and less so vice versa.
It used to be that your brand partners will say they’re watchmakers not retailers, today, some of them are going into retailing themselves, is this a growing trend?
This has been a threat since 2005 and it will keep evolving. Some brands will eventually develop enough clout to embark on vertical integration in terms of production, distribution and retail. There’s another school who will tell you that they’re only experts in making watches and depend on you for marketing in the local markets and serve as representatives to their customers. Some even take the middle road with some locations served by retailers and others with their own retail network. That’s where Cortina has to be adaptable, we cannot think in terms of forever partnerships, even marriages can end in divorce. Ultimately, a retailer has to consider that when we work with a brand on a boutique, you have the upkeep so that that brand can remain relevant and you cannot put all your eggs in that particular brand. We also have to be mindful to maintain a network of multi brand retail shops because brands come and go. This has been happening since the 60s, there are graphical curves that show brands go up a peak and then enter a trough and so forth, just like the economy. We try to work as much as we can with each brand but also prepare for possibility they might leave and cultivate alternatives. This threat has existed since the early days of consolidating watch brands into conglomerate groups, with more resources, these companies will always look to value maximisation and the way they can do that is total integration. A retailer can never be complacent but both parties must walk down the aisle with a tight partnership.
Do you feel that the balance of power has shifted because some brands have models that have become commodities?
If the mentality of the working relationship is that one where one can claim more power over another then it is not really a partnership anymore. There will always be times where times are tough and we stick together and then when things are going well, we enjoy the fruits together. It would be silly to adopt a fearful stance and try to hold a brand back from “becoming too powerful”. I would say some brands have really iconic models and we enjoy the ride together, I cannot afford to worry about whether some brands become super popular and decide to leave, with this sort of mentality, there’s no reason to do business. It would be significantly less risky to just invest in some assets.
In your experience, have you managed to find common ground for “taste” between customers and as a retailer?
There are some brands who created some watches where we as retailers are not very sure on whether to invest or not. There’s no such thing as a formula to whether something will sell well. One thing that will never be wrong over the 50 years: round and three hands [laughs].
Even if you talk about Octagonal shape watches, what is the shape of the movement and the sapphire glass? Round. People’s tastes change over time, some complications are in vogue, there are trends in sizes and colours, some brands take the same complication but make it look different but at the end of the day, there are so many watches that we cannot know them all and we certainly cannot like them all. As a business, it’s safer to make the mistake of looking at a fantastic piece and missing the boat the first time round than to be overly interested in it, make a large order and no one buys, if that happens, I’m dead! [laughs]
All our decisions are based on perception and quite literally, many retailers are family owned and our small teams look at each other and we ask each other if “we are feeling it” [translated from
Hokkien: “eh sai boh?”], the only difference is that retailers around the world ask the same question in a different language [laughs].
It’s common wisdom not to work with family, does this make the dynamics complicated as a business and as a family?
It depends on your mentality. Do you come to work as a professional or as a family?
Is it possible to split these aspects?
Why not? I think I’ve managed this quite well. You can choose to close one eye over potential mistakes or bad decisions simply because they’re family but these are professional matters and you just have to apologise, rectify the issue and not make it a family problem. It’s not easy to achieve, it may make people upset but you have to trust that family is family, business is business, and never bring business to the dinner table. This needs to be an unwritten rule for anyone going into a family business. I’ve seen TV serials where things can get really serious, I think it might be helpful that people actually watch these serials and not repeat those interpersonal mistakes.
In 50 years time, will there still be a Lim in charge?
I don’t know but we have the next generation who are already in the business and my generation has to groom them. Whether they can absorb the lessons and be capable enough to run the business in 50 years time is entirely on them.
Today, I still have the passion to run retail and it happens to be in watches. We can try our best to groom the next generation but if they have no passion for this or their passions lie in something else that we can’t see, my brother [Raymond] and I are very much into this business that we might not be able to see beyond this. Even if one day, they decide they’re not into running this business, at least they’re informed shareholders because they have at least worked in the business. Must it be a Lim behind Cortina? I’m not so sure. As far as I’m concerned, I have Managing Directors in different territories who are not Lims. I’m not running Taiwan or Thailand, we sit together and plot the direction but in actual fact, the locals are running it. We only make the decisions based on their feedback.
The Franck Muller and Cortina collaboration was a surprise because it’s always been a Sincere Watch exclusive brand and you’ve stated in interviews that you will let each company run independently post-acquisition, is this some strategy to get into Vietnam and markets where you have no presence?
Yes. If I look into expansion in Cambodia without rights to distribute in that market, I would have to speak to brand owners. These owners also have to protect their brand and their first question would be, “how well do you know the market?”
However, a local who knows the culture, the market and its customers will have this knowledge and the questions asked by the brand owners will be entirely different. With Franck Muller, we already have distribution rights and we will also choose to work with a Cambodian, it’s really up to the level of risk you want to take. If Cortina goes in by ourselves, we would have to learn the business ourselves. Going in with a partner, they would already have a database. This would give us a platform to go into the market, learn the ropes and then figure out how to grow beyond this one brand. It’s not like in the past where going in as Cortina, business will come. Watch retail professionalism is no longer about the knowing a lot about watches as in the past, it’s about relationship and trust with the locals. Whether we go in as Cortina or Sincere, we will have to weigh what’s best. Southeast Asia may be a small region but we are so culturally diverse that there are so many factors to manage, you need to know all these things before you can conduct business there.
Both Cortina and Sincere have different strengths but I meet the same guys at events, is the market big enough to keep these differences meaningful?
It can be the same people but when they go to each boutique, they ask for different things. Cortina has always had the mainstream brands and we have one or two independent brands like H. Moser. Then we have competitors like Hour Glass and Sincere. They have those mainstream brands and also a big cluster of independent brands. When we acquired Sincere, it was with the eye of enhancing where Cortina was weak and that was with independent brands. Hence, the revival of Sincere High Horology. Cortina will still do what Cortina does best with the mainstream brands and Sincere will do what it does best, which is bring out the strength of the independent brands. Today, in terms of brand portfolio, we are on par with Hour Glass. We probably have the most qualitative portfolio of brands anywhere in the world.
It’s not our DNA to be one house. There will be customers who go to Sincere for specific brands and then they come to Cortina for other brands. Never take that away from your customers. The Sincere Sales Associate is more attuned to independent brands, the conversations will be entirely different at Cortina. I think my customers would feel out of place if my guys suddenly started talking about independent brands with them [laughs].