Chinese Affection for Luxury Watches Defies Economic Challenges

When the Watches and Wonders fair in Geneva ended recently, it had welcomed around 49,000 luxury watch fans and collectors from all over the globe. They were excited to see the latest designs and features.

According to a report from the Federation of the Swiss Watch Industry (FHS), mainland China and Hong Kong together spent over 5 billion Swiss francs (5.49 billion) on watches in 2023. This makes luxury buyers in greater China the top clients in the 26.7 billion franc (29.3 billion) watch exports industry.

But one group of visitors really caught our attention - a whopping 40% of this year's attendees were from Asia, as reported by the event's CEO Matthieu Humair. And a large number of them were from China.

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It's no surprise that China's interest in luxury watches continues to thrive, even in the face of economic difficulties like the housing and stock market struggles. Many wealthy Chinese view luxury watches as a valuable option for investment, especially during uncertain financial times when it's wise to explore alternatives to the usual real estate or stock market investments.

At Watches and Wonders in Geneva, Switzerland, top watchmaking and luxury brands showcase their latest products to attract potential clients, collectors, and enthusiasts.

At this year's fair, well-dressed and well-accessorized Chinese customers seemed unaffected by economic uncertainties. These high-spending VIP guests, often invited by brands, are willing to pay millions for luxury timepieces or jewelry, whether they are shopping in China or traveling abroad.

Chinese brand ambassadors were prominently featured at this year's fair, with actors like Jackson Yee, Zhu Yilong, and Wang Yang making appearances for brands like Jaeger Le-Coultre, Chopard, and IWC. Additionally, actor and singer Xiao Zhan hosted livestream sessions for enthusiasts to watch.

David Sadigh, the CEO of Digital Luxury Group, a digital marketing agency in Europe and China, works with clients such as Patek Philippe and Van Cleef & Arpels. With over 20 years of experience in the region, he remains optimistic, seeing China's economic slowdown as a temporary phase.

Courtesy Cartier

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Luxury brands at higher price points are not worried about the economic downturn, according to Sadigh, who shared this insight with CNN at the fair in Geneva. On the other hand, mid-level luxury brands might face some challenges as their customers' disposable incomes are more influenced by market fluctuations. Despite this, Sadigh remains optimistic that China will eventually become the largest market for luxury watches.

Executives from 54 watchmaking brands, interviewed by CNN at Watches and Wonders, also expressed their confidence in China's strong interest in luxury timepieces. They highlighted the resilience of this market segment in the face of broader economic challenges.

Chinese watchbuyers are renowned in the industry for their discerning approach to both the design and complications of a watch.

Chinese watchbuyers are renowned in the industry for their discerning approach to both the design and complications of a watch.

Sales at Hublot, a well-known luxury watch brand under LVMH, have returned to pre-pandemic levels this year. Although growth rates have slowed compared to the peak of post-pandemic "revenge spending" in 2022. The brand, known for its high price tags sometimes reaching into the millions of yuan, still appeals to discerning consumers, with the US and China being its biggest markets.

"It's common for people to be cautious about their spending during a market downturn," explained Hublot CEO Ricardo Guadalupe. "However, Chinese consumers tend to return to purchasing luxury watches as they truly value them from the heart."

Even though the Chinese market is still developing for watchmakers, affluent customers from China are already considered as sophisticated buyers, similar to those from established markets like Europe and the US. These buyers have always admired the artistry, elegance, and craftsmanship found in luxury watches.

“We’ve seen in Asia — China in particular — average consumers are younger, around 35 (and) have an eye for unusual designs,” said Guadalupe.

Unlike volatile financial markets, watches can offer tangible value combined with emotional attachment.

Unlike volatile financial markets, watches can offer tangible value combined with emotional attachment.

Pierre Albouy/WWGF/Keystone

Carson Chan, a watch expert with a background that includes roles such as General Manager of Richard Mille Asia, Head of Watches at Bonhams, and Chief Advisor of Fondation de la Haute Horlogerie (FHH), is not only a professional in the industry but also a passionate collector. In an email interview from his home in Hong Kong, Chan highlighted the appeal of watches in Asia as a more manageable collecting option compared to larger items like cars.

CNN

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Raphael Young, a resident of Hong Kong who works in the IT industry in financial services, recently came back from a fair in Geneva. He shared with CNN during a phone interview that as a watch collector, he focuses on five main criteria: value, craftsmanship, history, innovation, and the people connected to the timepieces and brand. He also mentioned that his collecting hobby involves a lot of learning, research, meetings, and almost scholarly pursuits.

Timeless designs

A. Lange & Söhne, a smaller independent watchmaker, only produces 5,000 pieces globally, which helps them maintain a unique position in the market. The brand's CEO, Wilhelm Schmid, remains unfazed by China's economic conditions.

"A. Lange's customers are true collectors; it's a niche market. Despite our higher prices, there are groups of clients who are not affected by market changes and simply appreciate the finest timepieces," he shared in an interview with CNN. One of their latest creations, the Datograph Perpetual Tourbillon Honeygold Lumen, features a flyback chronograph, jumping minute counter, perpetual calendar with outsized date, and a tourbillon with stop-seconds mechanism.

Some watchmakers are catching the attention of Chinese buyers with special design elements. It has been noticed that smaller watch case sizes are becoming popular.

Vacheron Constantin spent eleven years creating a unique giant pocket watch called The Berkley. This one-of-a-kind timepiece celebrates a blend of cultures by incorporating traditional Chinese lunar calendar features along with Western horological complications such as a perpetual calendar, minute repeater, and tourbillon.

Luxury watchmakers are appealing to groups of clients whose finances may not be affected by the whims of financial markets.

Luxury watchmakers are appealing to groups of clients whose finances may not be affected by the whims of financial markets.

Valentin Flauraud/WWGF/Keystone

Young praised The Berkley for featuring the first Chinese perpetual calendar. He mentioned that the calendar is a remarkable achievement in the world of timepieces due to the complexities of the Chinese calendar system. With China having a history spanning 3,500 years, Young highlighted the significance of finally having a mechanical timepiece that caters to the Chinese perpetual calendar. He expressed his personal interest in owning such a complication as a Chinese individual.

Renowned Swiss watchmaker Roger Dubuis recently unveiled a new timepiece to mark the Year of the Dragon. Limited to just eight pieces, this special edition is sure to catch the eye of Chinese collectors and enthusiasts.

At a recent fair in Geneva, luxury fashion brands like Chanel and Hermes have made their mark alongside traditional watchmakers like Dior, Louis Vuitton, and Gucci. These brands are moving beyond fashion watches and into the world of high watchmaking, appealing to a wider audience.

Hermès introduced the Arceau Duc Attelé watch, which showcases a sapphire dome top and a new minute repeater. Meanwhile, Chanel presented a limited edition Mademoiselle J12 Couture watch with a dial featuring the silhouette of Mademoiselle Chanel in a black and white suit, adorned with 46 baguette-cut diamonds.

Watches offer a unique combination of tangible value and emotional significance, unlike the unpredictable nature of financial markets. Collectors value luxury timepieces for their craftsmanship, rarity, and rich heritage, making them potential investments that can retain or even increase in value over time.

Humair explained that in a world where everything is interconnected, there is nothing more beautiful than a wristwatch powered by mechanical movement. He described it as timeless, a piece of art that can be passed down to future generations. He also expressed excitement about the growing interest in watchmaking among younger generations in Asia, particularly in China.

Editor's P/S:

The Watches and Wonders fair in Geneva once again attracted watch enthusiasts from around the world, with a notable increase in attendees from Asia, particularly China. This surge in interest from Chinese consumers highlights their continued fascination with luxury watches, despite economic challenges. Wealthy Chinese individuals view luxury watches as a valuable investment and a status symbol, driving their spending in this sector.

The fair showcased the latest creations from top watchmaking and luxury brands, featuring innovative designs and exceptional craftsmanship. Chinese consumers were particularly drawn to special design elements, such as smaller watch case sizes and timepieces that incorporate traditional Chinese cultural elements. The resilience of the Chinese market for luxury watches is a testament to the enduring appeal of these timepieces as both a financial investment and a cherished possession.