The Luxury Watch market and demand in 2022

At this midst of Russia-Ukraine war, US is manipulating his remote hands between two giants in the East and West to maintain for his hegemony.  On 14 March, US national security adviser Jake Sullivan raised concerns about China’s alignment with Russian in a seven-hours meeting with Chinese diplomat Yang JieChi as Washington warned again of the isolation and penalties Beijing… Warning again? LOL!

Quite obviously we can see watch market has been slow down in end Feb. till now, as most of the dealers are liquidating their funds to keep the purchasing power for new watches after Watches and Wonders 2022 by 30 March. Some of the current deals are good if you had the hard cash, but who knows what shall it happen on April?

Well, I am optimistic about the watch markets, especially the Big Four or Big Five watches. However many of my friends, Bloggers, dealers, collectors are on panic sale in these two weeks.

Refer to Morgan Stanley Research, we can have a glimpse on what has been showed from 2020-2021 on Swiss watches performance…

At the beginning of COVID-19 Rolex had been shut down some of the production in 2019 with output about 700,000, However on 2020, they have ramped up their production to 810,000, and even with 1,050,000 in 2021. Refer to the attached chart, Rolex had reached 8B CHF in 2021. Followed by Cartier with 2B, Omega, Audemars Piguet over taken Patek become No. 4 with 1.6B, follow up with Richard Mille and Vacheron Constaintin… What I have noticed is that amongst these big players, Rolex had almost double its revenue in 2021 comparing with 2020, Well, Vacheron Constantin is the second biggest growth in revenue about 40%, may be the Overseas and FiftySix are gaining attention of those who cannot get Nautilus and Royal Oak at all.

Base on these figure if say the Luxury watch definition is US$5,000 to US$50,000. There is not too many Luxury watches falling into these range from these top ten watch maker of Switzerland. Take for instance, Switzerland produces 6M watches a year in 2021, there is only a fraction of them going into the “Luxury Category” may be only 20%, that is about 1.2M watches a year.

Do you think 1.2M Luxury watches will be more than enough for those discerning client all over the world?

Don’t ignore that there are about 5M new Millionaires with asset of over US$1m created in 2020. So every year there will be 5M-7M people coming into this Luxury market. They are never short of cash just

many of those are FOMO of those Nautilus, Royal Oak, Aquanaut, Overseas, Daytona and RM.

So I am sure that the so called Watch bubble will not burst at least within the year 2022.

HK Snob