Why is the Watch Industry Seeing Such Exponential Growth? Five Reasons Why High-End Watch Sales are Defying the Odds
Political, health and economic indicators are flashing red, so why is it that high-end watch sales are exploding?
Which metals have seen the highest growth in watchmaking? Precious metals (mainly gold and platinum) at +18.4% compared with November 2019. Which segment has seen sales increase the most? Luxury, gaining 16%. Which market has the strongest prospects for the medium term? Again, luxury, with a sustained growth of 6% to 8% annually between now and 2025, according to Bain & Company.
It defies all logic. The Covid-19 pandemic is ongoing. The geopolitical situation is highly unstable. In many markets, inflation is soaring. Customers are staying home rather than travelling. Shops worldwide remain closed for business. And watch brands continue to lag behind in online retail, which makes up barely 3% to 5% of sales. In a word, all indicators are flashing red… and yet the high-end watch segment is thriving!
Reason one: as with any crisis, the inequality gap widens: the rich get richer while the poor get poorer. Pharmaceutical and healthcare companies are, unsurprisingly, posting the biggest profits, with shareholders reaping the benefits too. Meanwhile, the real estate market is restructuring apace as investors make opportunistic acquisitions of property and businesses in financial distress, significantly increasing their wealth in the process and, consequently, their capacity to purchase luxury, even ultra-luxury, watches.
Return on investment
Reason two: at a time of financial market volatility, certain buyers consider watches as a pure investment product. When Patek Philippe announced it was to discontinue production of the steel Nautilus with blue dial reference 5711, investors saw an opportunity. Examples are already being offered at prices in excess of USD 250,000 on the secondary market.
Nautilus © Patek Philippe
New releases, at last
Reason three: despite the pandemic, and the consternation it caused during 2020, by the following year many brands were rolling out an almost normal offering of new releases and piquing interest with a raft of original models. Bovet, Patek Philippe, Purnell, Rolex, Richard Mille: the ultra-high-end mechanical watch segment, having hibernated in 2020, opened the creative floodgates in 2021. Much to customers’ delight.
Life is for living
Reason four: a mechanical watch is the ultimate heirloom. A finely crafted Swiss watch can be passed down through generations. After Covid revealed how fragile our lives are, leaving countless families bereaved, a great many collectors, some new, others with years of watch collecting behind them, came to the same conclusion: why wait? Now was the time to put ten thousand, even a hundred thousand dollars into the watch they’d had in their sights for so long. No-one knows what tomorrow may bring. Life is for living and savings are for spending.
The power of the independents
Fifth and final reason: more agile and quicker to respond, the independents scored a considerable number of points during the health crisis. The likes of H. Moser & Cie., Urwerk, MB&F, Ferdinand Berthoud and De Bethune are personally acquainted with their customers and can take creative risks which the large, listed groups can’t afford to take. This boldness, and close customer relationships, have paid off. Almost all the abovementioned brands have waitlists of up to twelve months. Moser is a case in point: the Streamliner Cylindrical Tourbillon Only Watch, estimated CHF 70,000, hammered for...CHF 750,000.
Streamliner Cylindrical Tourbillon Only Watch © H.Moser & Cie
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