The report from the HKTDC Watch & Clock Fair in this issue is the perfect occasion for Digital Luxury Group, which has been monitoring the international trends in demand for luxury watches since 2004, to provide insights on consumer preferences in the world’s largest import market for Swiss watches.
Hong Kong is the undisputed central hub for luxury consumption worldwide, thanks to its high density of luxury retailers and department stores, crowded with luxury shoppers from every corner of the world in search of attractive pricing across a large array of goods.
While Mainland Chinese visitors to Hong Kong represent the majority of high-spending inbound shoppers—a figure which hit 3.3 million in July 2012 (according to HSBC)—its local population of 7 million creates a domestic demand which is often used as a mirror of the entire territory’s growth forecast. Taking a closer look at the current state of the local luxury watch market through the lens of the WorldWatchReport™ 2012 allows us to see how 40 luxury watch brands have been performing.
Apart from Rolex in the lead, Panerai, IWC and Piaget see higher rankings here than their global average. This makes Hong Kong a very different landscape in terms of brand popularity than any other. According to Sean Li, Editorial Director for Revolution Hong Kong and WorldWatchReport Contributor, “the success of IWC can be explained by the strong retail presence and the very key locations for boutiques. Panerai remains popular, also driven by their strong presence in online discussions and a perceived limited availability. This has been one of the keys to their success that they have managed their retail network very well and have created a particular aura around their own boutiques.”
Haute Horlogerie brands* pick up some of the market share that Prestige brands** fail to gather, relative to the categories’ global weighting. The relatively high ranks of Patek Philippe and IWC contribute greatly to this category’s score. The impressive results of the Haute Horlogerie category do not surprise Sean Li. “The strong demand for Haute Horlogerie can be explained by the higher spending power than other markets,” he says. “It is also a pretty safe environment where there is little reluctance to be seen with a nice watch, compared with some markets where buyers might only have Haute Horlogerie watches for special occasions.”
One pricing-related search for every model-specific search
The Hong Kong market is proving to have very limited interest in detailed search patterns, as they focus mostly on the brand name in their online queries (73.91 per cent). Model-specific searches—often the most popular of the more specific intentions—reveal significant interest at 11.72 per cent, though a bit below the global average of 11.94 per cent.
Price is the only other relatively important category of search intentions in this market. The intention gains weight as we look at it under these terms: for every search of a model name, there is a search regarding pricing information for the brands analysed in this study. “Price definitely plays a big part in what local and visiting clients look for. The high density of watch retail outlets gives the HK market a great sensitivity to price and discounts than there would be in big cities that have fewer luxury retail establishments,” explains Li. According to him, some of the key characteristics of the Hong Kong client are that “they are more impulsive and likely to buy on the spot, rather than requiring multiple visits to the retailer before making up their minds. Also, they are often driven by discounts and are willing to shop around more due to the proximity of many more retailers, to save even small amounts. Compared to the mainland, the Chinese buyers are also able to see more brands, with a handful that are not yet available locally.”
Half of online interest is via mobile
No market sees such an overwhelming share of mobile searches as Hong Kong. With 43.32 per cent of all luxury watch related searches linked to mobile devices in this market, brands should take note: publish your content and make it optimised for mobile devices or risk losing nearly half of your potential impressions. Hong Kong should not just be a testing ground for mobile communications, it should be a necessity for any brand active in this market.
* The Haute Horlogerie brand categorisation includes A. Lange & Söhne, Audemars Piguet, Blancpain, Breguet, Franck Muller, Girard-Perregaux, IWC, Jaeger-LeCoultre, Jaquet Droz, Patek Philippe, Richard Mille, Roger Dubuis, Ulysse Nardin, Vacheron Constantin, Zenith
** The Prestige brand categorisation includes Breitling, Hublot, Omega, Panerai, Rolex, TAG Heuer
For further insights on the Hong Kong market, or any other for that matter, the WorldWatchReport™ offers a wealth of information. More details are available at: http://www.worldwatchreport.com
Source: Europa Star October - November 2012 Magazine Issue
See the articles in our report from the 2012 Hong Kong Watch & Clock Show