China’s love affair with luxury watches shows no signs of ending…
The Chinese government is continuing to crack down on conspicuous spending and lavish gift giving and even though this has had an impact on spending and gift giving, it has certainly not curbed appetites for luxury items. This is certainly evident in the luxury watch and high end timepiece market.
Greater China now accounts for a quarter of Louis Vuitton’s revenue, 35 per cent of Cartier’s, and a whopping 45 per cent of Omega’s.
At this year’s recent Baselworld watch and jewellery fair held in Switzerland, the Chinese were out in full force and many exhibitors marketing efforts were directly targeting the Chinese media and consumers.
The latest World Watch Report reported that interest in all luxury watch categories continues to escalate, led by Omega, Cartier and Rolex. Chinese demand for luxury watches (measured by online searches and social media posts) grew by +59.4% in 2013.
According to Baidu Vice President, Liang Zeng, “Watches are part of the fastest growing luxury segments in China right now.” Appetite for high end Haute Horlogerie time pieces, saw especially strong growth, with mobile searches for the products jumping 120 percent.
There are however, some significant changes in the consumer preferences and activities including the following key points:
- Chinese women accounted for a significant amount of online interest in high end watches, rising 145.5 percent in 2013 on the previous year.
- As with fashion, we can now expect more niche choices as a desire to differentiate increases. There is more emphasis on special edition, bespoke and VIP shopping services.
- The move to purchasing offshore will increase. Bain & Co reported that 67 per cent of all Chinese luxury purchases this year were made overseas.
- There is an increase in demand for multi brand boutiques such as Galeries Lafayette.
Offshore boutiques, luxury stores and brands would be wise to start developing comprehensive digital strategies to attract these new consumers to their stores outside of China as international luxury spending continues to increase. Attracting these individualistic clients to stores abroad is just as important as doing so at home.
According to Erwan Rambourg, head of consumer and retail equity research at HSBC, the Chinese are still the most relevant group of consumers in the luxury watch market, and will continue to be.