With a slowdown in sales thanks to China’s ongoing anti-corruption campaign, the luxury watch industry has been scrambling to find out how to reach Chinese customers want amidst this new business environment. On July 3, in an interview with Beijing Business Today, Roger Dubuis Global Sales Director Etienne de Gramont discussed what Chinese consumers seek in luxury watch shopping. Read below for de Gramont’s take on the main trends in the China watch industry.
The key to competitiveness lies in scarcity
The value of scarcity has long been understood. It not only is the key to keeping a luxury item desirable for a century or longer, but is also crucial to value preservation and appreciation. De Gramont believes paucity distinguishes upper luxury from public luxury, and points out that a portion of luxury goods have become mass-produced and profit-driven as the market rapidly develops and demand grows. During the past several years, the growth has stimulated a wave of leading brands to expand from first-tier to second-and third-tier cities.
De Gramont said that luxury watch enthusiasts and collectors care more about product quality than the brand’s growth. A limited production of 5,000 watches per year keeps Roger Dubuis unique and scarce, which in turn, advances brand competiveness.”
Chinese consumers are increasingly self-expressive
It’s not only Western celebrities who hate to appear on Us Weekly’s “Who Wore It Best?” section, the ultimate fashion faux pas—wearing or having the exact garment as someone else. This has also become Chinese luxury consumers’ nightmare as the trend of self-expression spreads. An increased demand for custom-made, limited-edition, and logo-free luxury goods shows local consumers’ transition from showing off wealth to showing off personality.
De Gramont believes that the question of whether a brand can satisfy consumers’ needs for self-expression will become an important decision-making factor for purchase, although for the time being, most local luxury watch consumers still focus on pursuing brand names and legacy. According to him, “European consumers generally value uniqueness and do not want to own the exact same watches or handbags as someone else; such a phenomenon will soon be seen in the Chinese upscale watch market, and consumers will seek for watches that reflect their personalities.”
The future belongs to the high- and low-end markets
According to the article, due to market slowdown, several watch brands of the LVMH group underwent price adjustment this February, unifying the Hong Kong and mainland prices of select products.
De Gramont states that instead of adjusting prices to respond to the status quo, Roger Dubuis will keep its current pricing as the bimodal M-shaped society continues to form. In the future, brands at the top and the bottom of the pyramid will grow rapidly, while the middle range is eroded. He said, “upmarket consumers are relatively stable and have higher brand loyalty as long as the brands follow the golden rule: paucity and quality.”