China’s Luxury Watch Addiction Becoming Financing Channel For Startup Businesses
Aside from high-end European watchmakers or the recipients of “gifts,” some of the biggest beneficiaries of China’s luxury watch buying boom have arguably been humble pawnshops. In recent years, luxury watches have been the most commonly hocked good at Beijing pawnshops, with one watchmaker observing that the selling of these watches is now becoming “a financing channel for owners of small and medium enterprises.” As China Daily reports this week, luxury watches started to show up in pawnshops in Beijing in the mid-’90s, with pawning activity increasing dramatically since around 2000 and creating big business in the Chinese capital and some of the country’s wealthier cities.
Xie [Yifan of Baoruitong Pawn Shop] said that earlier this month, a client walked into the pawnshop near the North Third Ring Road with a bag of seven watches, all of which were models from the world’s top 10 watch brands. The client wanted to pawn them for 250,000 yuan. Two watches from his collection were enough to get him the money he wanted for his business.
In Huaxia Pawnshop, which is the first pawnshop in Beijing with shareholders, watches represent 30 percent of the personal goods business.
“In the last five years, the watch business has increased almost every day,” said Wang Shulin, a senior technician with Huaxia Pawnshop. “I see luxury watches every day and even several a day recently.”
While most pawned watches are eventually redeemed, according to the article, many are not, providing — as in the second-hand upscale fashion market — great opportunities for consumers, who are more trusting of the quality and authenticity of the products up for grabs.
If they are lucky, people can buy a limited edition or a pedigree watch at a very low price, often, about half the original price.
“I heard from some friends that buying watches in pawnshops is more cost-efficient than exclusive stores,” said a customer surnamed Yang.