Asian Buyers Account For More Than 60% Of Luxury Watch Purchases When Taking Tourist-Shoppers Into Account
Jing Daily has previously looked at the cultural aspect of China’s obsession with luxury watches, a love affair that has had far-reaching implications for the industry. From localized product lines and design partnerships with Chinese artists to star-studded events and the appointment of domestic brand ambassadors, major watchmakers have taken the extra step to cater to one of their most important (and loyal) markets. But a quick look at the history books indicates that China’s interest in timepieces stretches back to its imperial past, when Jesuit missionary Matteo Ricci first dazzled Ming Dynasty emperor Wanli with European clocks in the late 16th century.
In the centuries thereafter, though China adopted the Western 24-hour time standard in 1670, adoption of European-style clocks and watches remained largely restricted to the nobility. By the late 18th century, when the Qing Dynasty emperor Jiaqing banned the import of Western clocks and watches, China had developed a thriving indigenous watchmaking industry, though European pocket watches — and later wristwatches — remained popular among the country’s elite until the establishment of the People’s Republic in 1949.
From the 1950s to the late ’70s, Shanghai Watch emerged as the country’s dominant brand, and during the Cultural Revolution (1966-1976) a wristwatch had become one of the “Four Big Things,” (四大件) along with a bicycle, a sewing machine and a transistor radio, that were considered essential household items for newlyweds. But after the deaths of Mao Zedong and Zhou En’lai in 1976, and following the economic reforms ushered in by Deng Xiaoping just a few years later, Shanghai Watch and other domestic companies came to be seen by many of China’s freshly minted capitalists as relics. The age of the European luxury watch had truly arrived.
Over the past 30 years, sales of luxury watches in China and to Chinese tourist-shoppers outside of the country (or in shopping enclaves like Hong Kong or Macau) have maintained strong annual growth, but it’s really been in the last few years that the true buying power of Chinese and other Asian consumers has become apparent. According to industry expert Gregory Pons, annual luxury watch sales in emerging Asian markets, with China leading the way, are surging by 30% year on year, and 40% of Europe’s luxury watches are now shipped to China, Thailand, Malaysia and South Korea. (Though this figure surges to more than 60% when purchases by tourists overseas is factored in.)
“There is a real craze,” [industry expert Pons] said. “In Hong Kong, they are having to manage the crowds outside watchmaker stores. Some just want to flash their wealth. But there is more to it than that – the Chinese have always had a weakness for watches.”
With Chinese buyers making up a disproportionate number of the global clique of 15,000 to 20,000 buyers who sustain the luxury end of the market, their tastes are shaping contemporary design.
“The Chinese like their watches classical – not sporty – and so everyone is making classical watches. The Chinese like mechanical watches, not quartz. And so everyone is back into mechanical watches,” said Pons.
“In the West red is seen as aggressive, but in China it’s a sign of prosperity. So we are making red watches.” And because Chinese consumers prefer smaller watches – having more slender wrists than Americans – watches are shrinking in size.
As Pons went on to tell the Independent, much like what we’ve seen in other areas like contemporary Chinese art, gold and jewelry, wine and antiques, the buying boom in places like China is highly influenced by the relative dearth of investment options available to wealthy individuals there, as well as an increased focus on portable investments that has taken hold. In recent years, three luxury watch investment funds have even been set up, following similar moves in the fine art and fine wine sectors. Said Pons,
“There is a kind of underlying anxiety, that the good times might not last, so they might as well invest in tangible goods. A watch will never completely lose its value, unlike stocks, the dollar or the yen.”