Rolex cuts middlemen with 1st direct store in China

What happened Signaling a more hands-on strategy for the mainland China market, Rolex is reportedly set to open its first-ever direct store in the country at Shanghai’s HKRI Taikoo Hui mall. Until now, Rolex had relied on authorized dealers to manage its operations in the country, making this direct-to-consumer store a significant shift in its approach. The store, which will operate under the banner of the Bucherer Group, the watch retailer that Rolex acquired in 2023, will enable Rolex to exert greater control over its customer experience and brand storytelling in China’s highly competitive luxury market. One of the store’s key features will be a section on the second floor stocking officially authorized pre-owned Rolexes. This space will also offer recycling services, a move that reflects the growing consumer demand for sustainability and certified luxury resale products. The timing of this new store coincides with a challenging period for Swiss watch exports to China, which dropped 21.6% YoY in H1 2024. Despite this, Rolex is apparently doubling down on the Chinese market, betting on the long-term potential of direct engagement with affluent Chinese consumers. The Jing Take Rolex’s decision to open a direct store in China indicates long-term confidence in the market, even as the broader Swiss watch industry faces headwinds. With Chinese consumers becoming increasingly value-conscious amid economic uncertainties, such as decelerating growth, high youth unemployment, and a weakening real estate market, luxury brands need to offer experiences and value-added perks. This store gives Rolex the ability to curate a more personalized and exclusive shopping environment, which will likely resonate with high-end customers who are still willing to invest in premium brands despite economic pressures. The inclusion of a certified secondhand shop is a timely response to Chinese consumers’ growing interest in sustainability and circular luxury. Looking ahead, Rolex’s expansion into direct retail could signal a broader shift in the luxury watch industry’s strategy in China. As sales of mid-tier Swiss watches decline, luxury brands are increasingly focusing on the ultra-high-end segment, where demand has remained more stable. By offering a controlled and premium shopping experience, Rolex is positioning itself to capture the evolving tastes of Chinese luxury consumers, particularly those who value sustainability and exclusivity. This move could lead other luxury watch brands to rethink their approach in China, moving towards direct-to-consumer models and further integrating pre-owned products into their offerings. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Rolex cuts middlemen with 1st direct store in China

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Published October 02, 2024

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Rolex cuts middlemen with 1st direct store in China