China Watch Report


The Chinese watch market seen by key players

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November 2019


The Chinese watch market seen by key players

In this article, we selected a number of quotes from various voices on the Chinese watch market, that helps to understand the main trends and upheavals in the country. From Walter von Känel, CEO of Longines, to Chinese “key opinion leaders”, here is our selection.

“PROMOTE EDUCATION AGAINST FAKE PRODUCTS”

Ryan Chen, Chinese watch journalist and influencer
Ryan Chen, Chinese watch journalist and influencer

“There are a lot of counterfeits on the Chinese internet. This is also the reason why the secondary market is less developed online: consumers are afraid of finding fake products (even though many are conscious of what they are buying). I’m trying to convince my audience on WeChat to opt for original watches. But some followers are counterfeit merchants! The most effective way to combat this phenomenon is to improve the level of watchmaking education in China and let people know more about the value of original quality products. However, in the face of increasing market sophistication, counterfeiters are also making technological progress. Before, it was enough to put the logo of a known brand on any watch. Today, reproductions are getting better and better, otherwise they no longer find buyers.”

“GIVE THE LOCAL TEAMS MORE POWER”

Kelvin Sa and Daniel Sum, Shanghai Watch Gang
Kelvin Sa and Daniel Sum, Shanghai Watch Gang

“A lot of foreign brands have a way of thinking that is too traditional and they don’t really understand how Chinese consumers buy watches nowadays. The problem is that they are generally managed from Switzerland, with only one team for the whole Chinese market. You have to think of China like a continent! Would you have the same team covering Spain and Russia? The challenge is to find elements that are relevant to millennials and that will be appealing in the Chinese culture. But to achieve this, you need to get the local teams more involved and give them more power.”

“PERSONAL ADVICE IS THE KEY TO THE MARKET”

David Chang, founder of Watchina and director of the Beijing Collectors' Association
David Chang, founder of Watchina and director of the Beijing Collectors’ Association

“In Europe, there are many boutiques with great credibility due to a long history. This is not the case here at all: purchasing decisions are based primarily on informal recommendations. What is most effective in China is word of mouth. Personal advice is the key to the market. That is why ‘influencers’ are so important: they act as ‘friends’ with personalised recommendations. Brand and model recognition is still at a relatively low level in China. The community of watchmaking enthusiasts is being built as we speak.”

“CHINESE MILLENNIALS ARE ECONOMICALLY DEPENDENT”

Thierry Huron, watch consultant, The Mercury Project
Thierry Huron, watch consultant, The Mercury Project

“In the generally tense context due to the trade dispute with the United States, the Chinese millennials, the main target of Swiss watchmakers, remain fragile: most are not financially autonomous and depend on the income of their parents or even grandparents.”

“THE PRICE IMBALANCE REMAINS SIGNIFICANT”

William Bai, watch writer, founder of WatchTraveler
William Bai, watch writer, founder of WatchTraveler

“A persistent problem is that of watch price levels, which are higher than in the rest of the world. This is not only linked to taxes but to the policy of brands and their distributors, who add the tax onto the Swiss public price, and not onto the import price! The free trade agreement signed with Switzerland has brought only a few improvements. Even though Chinese will continue to buy watches abroad, customs have become much stricter. So consumption in China itself is growing too.”

“VERY HIGH MARKETING COST”

Robin Tallendier, founder of Atelier Wen
Robin Tallendier, founder of Atelier Wen

“We are based in Hong Kong but it took us longer than expected to launch our watch brand in China. The cost of marketing is much higher than in Europe, where we have obtained good press coverage. In China, everything has a price! Western brands are partly responsible for the high price of Chinese influencers, as they have started a race for online traffic that is out of step with the reality of sales. The result of these campaigns is often disappointing because there are many fake followers.”

There are two possible responses to the huge Chinese grey market: join the Chinese e-commerce platforms, or not?

“WE’RE GOING THERE TO CLOSE THE PARALLEL MARKET”

Walter von Känel, Managing Director of Longines (interview published in Europa Star in 2018)
Walter von Känel, Managing Director of Longines
(interview published in Europa Star in 2018)

“We have been Tmall’s partners since 2017. We are putting pressure on them to slow down the parallel market. The parallel market is my personal war! I recently had parallel market actors closed down in Italy, Germany and Austria. And I can tell you that it wasn’t a small volume. We recently made an extraordinary seizure of watches from the parallel market thanks to the Chinese customs agency, with whom we have very good relations. That way, we can track down the dies.”

“PARALLEL MARKET STILL TOO STRONG TO PERSUADE US TO JOIN”

Piero Braga, Director of Gucci Timepieces & Jewelry
Piero Braga, Director of Gucci Timepieces & Jewelry

“This segment is evolving rapidly, with the merger of JD.com and Farfetch, or Alibaba and Net-APorter. There is still a lot of uncertainty, so we are waiting to see how the situation will evolve. There are still many parallels and counterfeits on these platforms. They try to separate luxury on different platforms but the traffic there is disappointing. The right balance between quality and traffic remains to be found. For now, we have made the choice to grow in China through our own platform.”

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