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

 

 

Hong Kong Watch Market Review



Hong Kong is the major Export market for Swiss Watches  as  it takes up 13.3%  for May 2015 shipment.

How does it behave in the past 12 months?

We could see downturn in volume of watches less than 200 francs , however other segment recorded steeper declines are those more than 3,000 francs.  China has tightened expenses control for all government officials, especially entertainment and “fake entertainment”!

These scenes are not able to occur again:

“Pack these 6 Daytonas, Do you accept Cash!?”

“Give me all different colour of this Ferragamo!”

“Give me that 50 years Mou Tai of RMB500,000!?”

A sharp decline was seen in these few months, some of the high rental Rolex AD shops would be closed down soon.

Steel watch as the majority of all types which Declined 11.9 percent in May amongst all Gold, Two Tone, others.

Patek has reduced 20% of all his watches in 10 Feb, and staring from 1 July they will increase 7 % across all models:

US, UK (price unchanged)

Canada ( Increase, yet to confirm how many percent)

Switzerland (+7%)

EU (+4%)

HK (+7%)

Japan (+6%)

China Market

Imagine that Mitsukoshi and Izetan has Mandarin PA announcement in Japan!?

All major Luxury watches catalogues is printed in Chinese Patek Philippe Rolex, Audemars Piguet, Vacheron Constantin.

Still we can see some for the China superrich pays HK$5M for a watch, but is uncommon now. They would like to fly to Switzerland shopping there.

Most of the Watch Boutiques  now are inviting local watch collectors to join their event and function. At least they want to get hold of the basic buyers in HK when 80% rich Chinese customers are gone.

Price is key issues as all know that the shopless grey dealer is importing the same watch at less 20 to 30% off whereas we have only limited discount for 5 % to 10% depending on brands model at AD shops.

The recent Patek price adjustment is likely a leverage adjustment to offset the profit loss of last 20% price reduction back in 10 February.

Toyota warranties each new Toyota vehicle sold by Crown Motors Ltd (CML) and registered in Hong Kong for the first 36 months or 100,000 km (whichever comes first).

Rolex will launch a 5 years (60 months) warranty program on your watch purchase!

This is a big game to those other luxury watch as they have to consider the long term support capability including coverage, service skill, handling capacity.

Some of the Service of luxury brand had already been suffering with insufficient local locally in the repair and maintenance. Have you heard of an Overhaul of a Perpetual Calendar take 1 year!?

Next Time when you visit Europe, check the price and may be you can get a good deal.

Or Buy from Trustable Local Dealer for the model you like

Buy low is the policy, it is the time.

HK Snob

Hong Kong should be proud of itself, being a small city and is world largest Consumption of Luxury Watches!

Hong Kong consumes about 40% of World's Luxury Watch every year. Being the World's Largest Watch Market.

No wonder why the Swiss watch company would have selected Hong Kong as the 2nd location outside Switzerland for World Watch Fair last month. 

Hong Kong Watch Snob,
Hong Kong Watch Fever

HK Watch Market loom to slow down in Q4

羅德公關公司（Ruder Finn Asia）和市場調查公司益普索（Ipsos）聯合發布的一份關于中國香港奢侈品市場的報告顯示，超過一半（52%）的香港市民計劃在未來幾個月減少在購買手表上的支出，此外，計劃減少購買葡萄酒、服飾、鞋和化妝品等其他奢侈品的人也有一定比例。

該報告與今年夏天發布的針對中國內地消費者的調查數據形成了對比。針對中國內地消費者的數據顯示，超過40%的人表示，他們將花更多的錢購買葡萄酒、鞋和化妝品等奢侈品，不過他們也暗示將減少在手表和珠寶上的支出。

報告6月份對2017名在過去12個月內購買過奢侈品的中國消費者進行了調查（其中大約300名受訪者居住在香港）。其中，香港受訪者的家庭平均年收入為55萬港元（約合44萬人民幣），而居住在中國內地大城市的受訪者的家庭平均年收入為人民幣18萬元。

報告還發現，香港居民購買奢侈品是為了犒賞自己，而內地人購買奢侈品則帶有體現自身品味和增強自信的目的，此外，內地消費者更有可能為送禮購買奢侈品，不過鑒于中國政府最近正對送禮之風進行打擊，這一點可能也會發生改變。

Extract from WSJ -CN 25 Sep 2012

HK Snob

Where to buy watch of good value for money?

There are too many rich people in Hong Kong, and there are too many people who want to own rather to to appreaciate the engineering excellenece of a Swiss watch master?

I know many people, city Celebrities, lawyers, doctors buy watch for fun, they enjoy the moment they buy their watch and moment people admires how attractive his watch is.... There are too many people that would dump their watch after using for a while for some cash. They never keep their watch more than 2 years!

I have a friend showed me an AP Skeleton White gold perpetural canlendor watch at HKD380,000 and that watch was selling at HKD1,000,000.

Well Why did he buy that watch? Why did they sell it? That is too difficult for me to fully understand them.

I have seen another one, a 99% new Patek Philippe World time only HKD280,000. The Original price was over half million.

Well, There are so many buy and sell of watch in Hong Kong, but I am focusing on Rolex as they are Cheap!... Cheap means good value for money and we will not lose too much after being a owner and user for a few years.

That is the best stragety that I can use the limited money on watch, So when I catpure a good watch, we can consider to keep it forever... why not?!