In 2018, the market size of high-end watches in Mainland China has reached 19.4 billion Yuan. iResearch holds the opinion that the growth of the whole luxury goods have the signs of slowdown, but it will not stop suddenly. Meanwhile, reduction of import tax and consumption tax creates a favorable policy environment for the market as well.
Although the products and brand attributes of high-end watches better fits the demand of the rather elder consumers, while the interest in high-end watches among young consumers is gradually developed as well. Other related policy adjustments also positively influenced the growth of high-end watch market. For instance, the releasement of E-Commerce Law and the stricter imported product check eliminated the existing price advantage of previous high-end offshore purchase channels, which will to some extent guide some consumers to domestic purchase channel.
However, problems do exist. Firstly, the price advantage of the high-end watches in oversea market is still significant, for instance the “parallel imported watches” in Japan are warmly welcomed by Chinese consumers. Also, the scarcity of certain brands and products in domestic market is significant, as they are only sold overseas.
Swiss watch standard has long been the highest standard in global watch industry and the obvious leader in high-end watch market in China. In 2019, the production of Swiss watch was as high as 19.9 billion Franc, and the export sales to Hong Kong and Mainland China exceeded 4.7 billion Franc in total, which was 29 billion Yuan in RMB.
Apart from the long history, excellent technology and the series of well-known brands, strict legal protection and certification standards effectively guarantee the quality of Swiss watch. “SWISS MADE” is the local protection logo for Swiss watches. According to the standard from Federation of the Swiss Watch Industry, watches with the logo need to satisfy the following requirements: 1. As assembled watches, they must contain more than 60% value generated from Switzerland and must have a Swiss-made movement; 2. 60% of the movement components should be produced in Switzerland; 3. Elements costing more than 50% of the movement must come from Switzerland, and the cost here excludes the assemble fee.
Certificated “SWISS MADE” watches sold in China mainly come from Swatch Group, Richemont Group, Louis Vuitton Moët Hennessy Group and Kering Group. Swatch is a professional watch producer, while the latter three enterprises are known as luxury product producers among consumers, indicating that the location of the brands from these four enterprises are quite clear. What’s more, individual watch makers represented by Rolex Group also play important roles in China’s high-end watch market.