When the crisis hit it hard in 2008, the luxury watch market sank to a low. Many predicted giant timepiece manufacturers were doomed without a trace of hope, but the next decade proved them completely and utterly wrong.
One of the leading factors in the Swiss watch market’s “fall from grace” was the fact the US market was flooded with grey-market luxury items for a fraction of the actual cost and the severe crackdown bribery case within the Chinese government. But since life is all about surprises, the same Chinese market today seems to be the remedy for the luxury watch market’s redemption, closing 2018 as the leading importer of glorified luxury timepieces across the globe.
According to a recent report from The Federation of the Swiss Watch Industry, the first two trimesters of 2018 marked the highest growth in luxury watch market since 2013, with Mainland China and Hong Kong topping the list of main importers having contributed a whopping $237million to the market’s skyrocketing developments. For comparison, the share of the US has been over twice lower, levelling at about $108 million.
What was the history behind China’s influence on this market before this unprecedented rise? In 2014, the Chinese government undertook the largest wave of sanctions against corruption, marking lavish gift-giving and receiving to government officials a punishable crime. The effect that this had on the luxury industry was devastating. A lot of businesses that relied heavily on these sales ceased existing altogether, while the income for others sank significantly.
The fierce anti-corruption campaign in the total of the Swiss watch market’s global export value, closing 2015 with a 3.2 per cent drop that would translate itself into an aggravating 10% drop in 2016. At this point, many predicted the personal apocalypse for Swiss watchmakers.
However, 20017 brought s rise by 2.7 percent, and the things went uphill from there for original luxury watch manufacturers.
Another factor that contributed to the rise like a phoenix is the competitiveness against smartwatches that many luxury watch producers have taken on in recent years. Apple may be a tech giant that sold more smartwatches than the entire Swiss watch market, but that doesn’t mean things are bleak for luxury watch producers. What happened here is that Apple dragged many smartwatch producers out of the “Big Game”, like the time when Motorola stopped making smartwatches indefinitely. At the same time, many traditional watchmakers like Tag Heuer and Frédérique Constant dived deep into high-end digital watch realm, releasing hybrid watches that enjoy marvelous popularity.
Last but not least, comes the love of the crowds for their heroes and fashion icons, that was wisely used by the Chinese market leaders to increase sales. The Power of the Chinese Influencer in the era of influencer marketing is hard to underestimate. It’s not your 10000 people strong community, and what we talk about here is millions of people. With the positive start of 2018 having been a clear indicator of some “foreign power” mixed into the forming potion, some instances of market acquisition are hard to overlook. One notorious case is Audemars Piguet’s campaign which features the Chinese singer Lu Han as the brand’s first-ever Chinese ambassador. With over half a million dedicated followers, such steps are clearly a hard-weight factor that will continue to contribute towards the growth of traditional watchmaking. With that said, 2019 is definitely a year to watch, and probably a breaking point before skyrocketing rise. It’s probably time to investigate the market more thoroughly, and weigh in on making investments or buying shares- it’s a surefire way to growth.