"Seiko is unique due to Mecatronic technology"
Katsuhiko Shiga, Managing Director of Seiko Hong Kong Ltd. was recently in Kathmandu to open the first exclusive showroom and service centre of Seiko watches here. Excerpts from an interview in which he emphasised that the new initiative is more for communication with the customers here than to increase the business volume:
What market does Seiko have worldwide and in Nepal ?
We have a clear direction. Our brand vision has been innovation and refinement right since 1881, when our company was founded. In recent years, we have concentrated on increasing our brand barrier and improving our brand position. To achieve such goals, product research and development is essential. So we have new movements in many ways. We have come up with new designs. We have a strong position in technology, both in mechanical and electrical technology. We call it mecatronic technology and it is vital for us as we are unique because of this. Not many companies have two integrated important technologies simultaneously. We have invented kinetic watches and spring dials too. We are vertically integrated manufacturers because we manufacture our own cases, dials and bracelets. All these factors put us in a unique and original position in the global watch market.
We are entering the South Asian market to communicate better with the consumers. We have a very strong position with retailers and consumers in the Americas , Europe and South East Asian countries and we feel that this is the time to enter South Asia . That is why we have opened a Seiko showroom here. Nepali people already know the Seiko name because we have been selling mechanical watches here like Seiko 5. Seiko has been sold here for about 20 years but the sales were mostly of the products in the lower price range. But we now want to show Nepali people what more we have. It is very important to showcase the variety and uniqueness of Seiko to the consumers though many of them may not need it.
How many designs does Seiko have and what is its price range?
We have several hundred watch designs. Our concept is very simple. We will always have new technology and quality of design. Excluding the mechanical watches, our price range is from $200 to 100,000 euros but the general designs are worth about $1,000.
What is the new trend among watch users globally?
This is not easy to say. The population that appreciates uniqueness, like originality, quality etc. is growing and they like Seiko. But there has also been a trend among people to wear apparel brands (casual watches) rather than manufacturer brands. They like fashion brands. These apparel brands are not expensive and they do not have quality. But this market is decreasing in some countries. People who like Seiko like our mecatronic technology because of its unique mechanical movement.
How have cheap Chinese watches affected your sales?
They cannot be compared. They are totally different products like cars and bicycles. Some people really like branded watches and some people like to buy cheap stuff. It all depends upon what satisfies the particular customer.
Many people do not wear watches nowadays because people have watches in their mobiles, cars, offices etc. How is this trend affecting watchmakers?
This does happen but the satisfaction of wearing a watch on your wrist is different. Maybe it is fashion or wearing a quality product or a brand name but people still like wearing watches. We have watches with features like perpetual calendars, no need to change batteries etc. So, the people like our products.
What are your targets for the Nepali market?
The main target is to communicate with customers rather than making any investment. We don't know the market here and how much Nepali people will accept these kinds of products. Without knowing the market, we cannot say how much we can sell. We are confident of our quality, reliability, and designs. Our position is unique and our technology different. So, we have to show this to Nepali customers.
"We're committed to Nepal even in bad times"
Jaspal Bindra, General Manager, South East and South Asia, of Standard Chartered Bank Group, was in Nepal recently to attend the meeting of the Board of Directors of Standard Chartered Bank Nepal Ltd., which he heads as the Chairman. Excerpts from an interview on the strategy of Standard Chartered in Nepal and the region:
Standard Chartered Bank is reportedly changing some of its businesses in India . For example, it is considering selling its asset management business and trying to buy some other banks. Would you mind sharing with us the latest developments in these respects?
Globally, Standard Chartered has the strategy of impressive growth. During the last four years, we have made four acquisitions of banks in various countries. We have bought banks in South Korea , Pakistan , Indonesia and Taiwan . We also want to reorient ourselves in such a way that we have businesses with large volumes. The mutual funds and asset management in India have done well for us but we have always wondered if they are large enough in their scale.
What would be the effect of these changes in India to Standard Chartered's operations in Nepal ?
I think that Nepal will be positively influenced because of these changes. Whenever we have launched something new in India , we have tried to bring that to Nepal as soon as possible, given its feasibility here. We have huge capital investments in Nepal and it is in our own interests to bring all expertise and new products here to maximise our returns.
Obviously there has to be a market, proper legislation, the customer appetite and the possibility of growth.
What is the possibility of StanChart stopping vehicle lending in Nepal as it did in India?
We do a lot of things in a market-specific way. So, what we do in Nepal does not depend on the Indian market. We have asset management only in India. We do a lot of vehicle financing in Thailand. In India, we only finance used cars and not new ones because of the market. But, in Nepal, if the business is doing well, we see no reason to discontinue that. In India, the economics of financing owned cars is better than financing new ones. But we have not pulled out of new cars completely. When the economics improve, we might finance new cars as well. At the moment, it is just a diversion from one sector to another, given the market's situation.
Is there any possibility of StanChart starting the mutual fund business in Nepal even though it is leaving this business in India?
The business scales have to be right for this. Currently, we do not see huge scales being available here. The mutual funds business is a low margin, high volume business. So, we do not see its potential here immediately. This development will take a bit of time but if we see an opportunity, there is no reason for us not to enter it.
Now that peace has been restored in Nepal and the parties concerned have come so far to ensure that there will be a lasting peace. How is StanChart Nepal going to lead the way in the financial services industry under the emerging situation?
Yes, we are very excited too. We have been committed to Nepal even during bad times. We continued to open new branches. We added more capital even at the peak of the trouble period. We look at markets for hundreds of years and not temporarily, and that is why we have stuck with Nepal.
Now, the new environment is safer for our employees. We will be able to attract foreigners in terms of making investments in projects. In this, the benefits of our networking are going to be very important. It is a win-win situation for us if peace lasts. The immediate benefits will be a lot more foreign funds and that will hopefully spur the economy quicker than in the past.
Do you have new projects in mind?
Last year, we started project finance here and we will give continuity to that. We are the first bank to lead foreign currency syndication here. We are also the first to perform derivative transactions in Nepal . There will be structured trade finance transactions that we started this year. We will also have consumer finance and new things on the credit card side which are new in the market. We know that we have to find the market and get our systems, controls and management ready. Nepal has a technology platform which is superior to that of India 's and we are looking at this too. We will see what the best opportunity is and act on that accordingly.
Why has so little been done in investing in hydropower?
Well, it is a collective failure. The government was not enthusiastic, developers and financial models were also not secure. All parties have to come together and discuss the issues. We see a strong potential in project finance especially in hydropower but the business environment has to be there.
Some 17 months ago, in an interview with us, you had expressed the interest of StanChart to manage bad debt of the other banks if the legal regime for this sort of business was conducive here. Now loan securitisation law and insolvency law have been in place for about a year. So, can we now expect StanChart to start this business in the near future?
Absolutely. It's a business we are doing in many countries. It has got off to a flying start and we hope to bring it here too. But again, the challenge is in the volumes. It is not something that we can do for Rs. 100,000 or Rs. 200,000. It has to be in the tens of billions of dollars on the asset side. The timing will depend upon when the volumes are available. Our track record on doing new businesses in any country has always been very good and we will start new things here if the environment is right.
What are the probable hurdles here for this?
There are two main prerequisites to this. It depends upon the assets available and at what price the other banks are willing to sell them. It is always their view against ours. In many markets, people have been very unreasonable and they realise this over time. This will probably be the case here too.
Finally, how was the last fiscal year of StandChart Nepal ? What good news is there for the shareholders?
Well there's brilliant news for the shareholders which is reflected in the share price. I think the shareholders are smarter than us. They understand the value of good performance. The share price is Rs. 4,600 at the moment which is very high. We've declared a bonus as well as a 30 per cent dividend. This is due to the management team, the customers and the community that has supported us and we thank them for that.
I have to thank the community, our customers, our staff and the regulators for providing us security at difficult times, and making our operations smooth. We never had to worry about downsizing, even in the worst of times, because of their support. Now, we can only grow in the future.
