When Kintarō Hattori founded the Seiko Watch Corporation back in 1881, he did so with a simple message at the heart of everything he pursued: to always remain one step ahead of the competition.

It’s this philosophy, a wilful desire to innovate and evolve, that has persisted through the company’s 140-year history, from the advent of the wristwatch itself to the dawn of the Quartz movement (a Seiko invention, no less) and beyond.

It’s also a principle that helps contextualise the bold decision to transform Grand Seiko from a much-loved subdivision of Seiko into its very own independent brand in 2017 – a move that has established the Japanese name among the global players at the upper echelons of the luxury watch market.

We sit down with Akio Naito, President of Seiko Watch Corporation, to discuss Grand Seiko’s success, and find out more about what the future has in store.

Square Mile: The transformation of Grand Seiko from a luxury subdivision of Seiko to its own independent brand must be the greatest success of the Seiko Watch Corporation in the last decade. Could you tell us your view on the progress of Grand Seiko and your hopes for its future?

Akio Naito: As you said, up until 2017, Grand Seiko was a collection under the Seiko banner, although it was meant to be the pinnacle of Seiko watches back in 1960, it was still a part of the Seiko brand.

We made the decision to separate Seiko from Grand Seiko, because when we looked at a global distribution – not so much within Japan, because in the Japanese domestic market, many of our retailers carry both Grand Seiko and Seiko – but outside of Japan, the Swiss watch segment in the mid-price point has totally different distribution channels. So we decided to separate Grand Seiko from Seiko for the global development of the brand.

Akio Naito

When we made this decision, the first priority for us was the US market, which is obviously the biggest market. And I also thought for the US consumers, it’s relatively easy for us to appeal via both the technological superiority and the emotional value of the brand.

Consumers are, generally speaking, more open to trying new things or adapting to something. The example of Lexus versus Toyota; Lexus achieving the success first in the US market having been created by Toyota to enter the luxury segment. So there was a precedent.

We decided to go to the US market. The Seiko business was in a very difficult position back in 2015-16 in the United States, and I was transferred from Tokyo to New Jersey, where our [US] head office was located to rebuild the mainstream Seiko business while trying to initiate this new Grand Seiko business. It was such a big challenge, I had so many sleepless nights, but we were very fortunate to be able to successfully separate the two brands, separate the entities in 2018, and hire a new management team.

One of the reasons for our success was we had passionate core Grand Seiko fans in the US market – not so many, but a small community of Grand Seiko fans here and there in different cities. We brought a watchmaker over from Japan, did a demonstration in different cities, and tried to reach out to the communities through our sellers. That was the beginning of the expansion of the Grand Seiko brand in the US market. It worked so well that within a couple of years we became much better known among a wider audience.

The second step was for me to come back to Tokyo in 2019 and start looking at the European market: separating the UK from the continental Europe, not just because of Brexit, but because I thought that it’s a different market. When it comes to the luxury watch world, we needed a presence in Paris, so we established Grand Seiko Europe headquarters in Paris in 2018 and then opened Grand Seiko Place Vendôme; a Mecca for luxury brands.

Grand Seiko Kodo Constant-force Tourbillon

SM: What was the biggest obstacle that Grand Seiko had to overcome in order to achieve its present level of success?

AN: The biggest challenge at the initial stage was to explain the difference between Grand Seiko and Seiko, especially for the retailers who perceived Seiko as a mid-price brand in the US – a ‘department store brand’. For us to get over that hurdle, we first reached out to the shop clerks, the people who were actually selling watches, and those who were in love with the technical aspects of our brand who could be our ambassadors, to help others fall in love. Those people actually stood on our side to convince their owners or managers to carry Grand Seiko.

SM: What is your hope for the next ten years? What are your ambitions for Grand Seiko in terms of growth?

AN: There are two sizable markets where we haven’t been able to explore our full potential. One is mainland China and the other is the Middle East. Both have different reasons as to why we haven’t been able to exploit their full potential.

In the Middle East, the market has been left in the hands of our distributors. We don’t really have a strong presence as a subsidiary. We have a liaison office, but not a real business venue, so we are now in discussion with our distributors about how we can reach out to the market more directly. And once we establish our process there, I think we can become successful in that area. There are certainly wealthy people there wanting to buy good watches!

China is a different market and it’s very, very difficult. I think for Japan in general, it’s almost like a relationship between the US and Europe. For them, Japan is a young country, they have their own sense of luxury, so for us to try to convince them how we are different from a Swiss brand and a Japanese sense of aesthetics or luxury is not necessarily easy for them to digest.

Last year, we opened a new Grand Seiko company named Grand Seiko Asia Pacific, headquartered in Singapore. Actually, if we talk about the sequence of establishing Grand Seiko companies – 2018 Grand Seiko America; 2020 Grand Seiko Europe; and then 2022 Grand Seiko Asia Pacific – each time we opened our Grand Seiko company in different regions, we were pleasantly surprised to see the reaction among not just the consumers, but the retailers, and how they started changing their perception of Grand Seiko. So, moving forward, I don’t know how many years it will take, but in China and the Middle East, certainly we would like to expand.

Grand Seiko 'Tentagraph' Hi Beat Automatic Chronograph
Grand Seiko 'Tentagraph' Hi Beat Automatic Chronograph

SM: I suppose the best way to achieve that is by creating phenomenal timepieces like the Tentagraph and the Kodo. How important is watchmaking innovation to Grand Seiko’s global appeal?

AN: Obviously it’s extremely important. It’s the DNA of the brand. We keep progressing. We keep exceeding the standard we created and trying to be one step ahead of the rest by being innovative. And for that we need the right people, the commended watchmakers and talented designers, to continue to push forward; they’re the key. The next generation, too, how can we keep attracting those people to join our brand and for them to be able to develop their talents? We’ve always been mindful of how we can ensure all these things are happening.

Also, so far, all or most of our watchmakers are local to Japan and are also male. I personally would like to see a little bit more diversity, increasing the diversity. For example, I would like to develop a team of female watchmakers who can be a face of the brand, or even non-Japanese watchmakers.

It’s a challenge for the female watchmakers and talking about the Meister system at Grand Seiko Shizukuishi [the brand’s mechanical watch studio in Morioka, north Japan], one of the judging elements is training the next generation. Unless you reach a managerial position, that element is missing no matter your skills or how excellent you are as a watchmaker. In the past, because of the gender role difference in Japan, not many female employees were given a chance to be promoted to a managerial position. That’s why we don’t currently have a gold-standard female meister – a ‘super meister’ as we call them – but that’s something I would really like to change.

SM: There are a lot of Grand Seiko references released every year. It’s a high frequency in comparison to other brands in the luxury market. Is there a reason for that? You do a lot of limited editions and boutique editions…

AN: We have been receiving many requests from many retailers or consumers for something different or something new and exciting, but as a luxury brand, I think we should try – or we should make more effort – to streamline our collections to develop long-term best-selling models.

Every season, we have limited editions here and there. It’s an excitement, but it has to be an addition to the mainstream brand building, so we are mindful of that.

The reason why we do it is perhaps I came from the Seiko style of manufacturing and doing the business for Seiko. Even though today we are more focused on what we call global brands – Prospex, Pressage, etc – but in the past, we created different models for different areas like US-exclusive models, European-exclusive models, so we were used to creating so many different models.

After all, there are 24 micro seasons, 72 sub micro seasons; if we created a timepiece for every one that would be a lot of references!

SM: How does Kintarō Hattori’s concept of being ‘one step ahead of the rest’ fit with the modern interest in historic models?

AN: The wristwatch is something you mostly carry throughout your lifetime and is different from a smartphone or a smartwatch, which is more like a commodity – even though they are functional tools, you are not to carry that piece for many, many years. The mechanical watch or luxury watch is different.

So your attachment to a particular watch lasts for a long time, and oftentimes your watch is something you pass on to the next generation. So emotional value in this item, it exists, which is different from other consumer products.

Therefore, I think people are attracted to the classic look or the vintage style of the product. We as a brand should take advantage of that emotional value because we have a long history of watchmaking. But we need to do so not just by recreating the original models, there has to be some aspect of modernisation in terms of the technology or the material involved, and that’s something we try to do each year.

SM: Do you have a favourite watch?

AN: Yes, the Re-creations of the first Grand Seiko. It has a double meaning for me. First, it’s a very important date for Grand Seiko, the year the brand was first established. It’s also the year I was born and this limited-edition model came out when I was appointed the president of Seiko Watch Corporation.

SM: Is there an aspect of Grand Seiko that you think is undervalued by the wider watch community?

AN: Well, it may not be appropriate to answer, but actually I think for both Seiko and Grand Seiko people have not been able to really appreciate who we are.

There was the time of Kintarō Hattori in the early days of our company, when we were more focused on our high-end product. Our motto, “One step ahead of the rest” is an example of this mentality.

But as the business became bigger, we started creating many different models and expanded the range of products. So I don’t want to say we lost that identity, but we can be afflicted by the ‘everything for everybody and everything for nobody’ type of dilemma.

We truly have an excellent watchmaking history, the technology, and the passion – that’s what has to be communicated even more to the wider audience.

For more information, grand-seiko.com