After years of turmoil at Baselworld, a now-canceled global watch and jewelry trade show, and COVID-19 disruptions, Watches and Wonders Geneva has emerged as the most significant gathering for the global watch industry. This year’s event (which ran from March 27 to April 2) featured 48 watch brands and saw the introduction of public days to engage local communities and watch enthusiasts.
Brands are optimistic about China’s market outlook
Watches and Wonders Geneva 2023 is the first major industry trade show after China reopened its border. Despite limited flight capacity and difficulties getting a visa, Chinese delegates made a considerable presence at the event. In addition, nearly 200 journalists and industry influencers from China attended the event. During the keynote presentation and Q&A sessions, China’s market outlook attracted widespread attention.
Despite a decline in personal luxury sales in 2022, primarily attributed to the COVID-19 lockdowns, market analysts expect positive growth in China to return in Q1 2023. Bain & Company estimates that luxury sales will rebound to the 2021 level between the first and second half of 2023.
The luxury watchmakers seemed optimistic about the outlook as well. Guillaume Syenes, Executive Vice President at Hermès, said during a Q&A session with the media that “we feel the popularity of Hermès and the popularity of our products is extremely strong in the Chinese market. The strategy is still to open, generally, one new city a year [in China].”
The continued development of Hainan has also added new growth opportunities for the luxury watch industry. Christoph Grainger-Herr, CEO of IWC Schaffhausen, recently toured the island, noting that the tourism and shopping infrastructure had improved significantly. “We are very pleased with the progress in Hainan and very confident that this will be a major part of luxury shopping in Asia,” says Grainger-Herr.
Classic designs resonate well with Chinese luxury consumers’ evolving tastes
Nostalgia seemed to be a common theme at this year’s show. Many brands returned to their historical archives for inspiration, focusing on one or two classic designs and heritage pieces, including Jaeger LeCoultre’s Reverso, Cartier’s Tank Normale, Vacheron Constantin’s Overseas, as well as Rolex’s massively popular Oyster Perpetual. IWC Schaffhausen took the trend to the extreme by branding their booth on a single product, the new Ingenieur, a revival of a classic model based on the iconic design by the legendary Gerald Genta.
This pivot to classic models aligns well with the current consumer trend in China, where luxury consumers are interested in the “old money” aesthetic, choosing legacy and prestige over novelty. There is also a strong belief among Chinese high-net-worth individuals that such time-tested pieces hold value better in the long run.
Bruno Lannes, a senior partner at Bain & Company, says that while most brands saw declines in 2022, brands with iconic portfolios did better than those with trendy or seasonal merchandise.
In a market where many consumers consider luxury watches an alternative investment asset, this shift will likely encourage continued spending in this segment, especially during economic downturns.
Technology drives participation and excitement for Chinese consumers
To provide a unique experience for the Chinese audience, Tmall Luxury Pavilion livestreamed the event. In addition, Alibaba’s digital marketplace created a 3D space on its app during Watches & Wonders for Chinese consumers to try on the newly released watches virtually. Over 40 timepieces from 10 luxury watch brands were launched during the week-long program, capitalizing on the Chinese audience’s familiarity with livestreaming and immersive digital experiences.
Chinese consumers are increasingly comfortable purchasing luxury items online through livestreaming sessions or immersive digital experiences. This trend only accelerated during the pandemic, when offline access was restricted and the border was closed. As a result, luxury watchmakers who wish to succeed in China must continue to invest in technologies that enhance user experience and adopt a diverse retail strategy that seamlessly connects online and offline shopping experiences.