IWC, Montblanc, Vacheron Constantin and other big names presented treasures at the same time, and high-end watches worked hard to attract young people

China Business Daily (Reporter Chen Qing) In recent years, high-end watch brands have regarded young people as one of the important consumer groups, and have narrowed the distance with them through various forms. Watches and Wonders Geneva (WWG) recently opened its doors to engage young people through an immersive watchmaking experience. At the same time, the press conference of the watch brand also chose to be broadcast live online on Tmall and JD.com.

Brands work hard to make money, will consumers pay?

Tourists shop for watches at the CDF Haikou International Duty Free Mall in Haikou, Hainan Province. (PHOTO COURTESY OF CNSPHOTO)

Fusion of numbers and realities

Many watch brands are actively exploring and upgrading new consumption business models of "digital and real integration" to create diversified consumption scenarios.

At this year's WWG, more than a dozen watch brands such as IWC and Montblanc have chosen to broadcast live on Tmall and bring new products.

In addition, more than 50 new products of "the same model of the watch exhibition" were launched on Tmall. For example, Vacheron Constantin's Tmall flagship store has launched 11 new watches in one go: IWC is also full of sincerity, specially launching a new Portuguese series of color watches, and more than ten new products are launched on Tmall luxury. Jewellery and watch brands also joined the "luxury camp" of the watch fair. Bulgari, Van Cleef & Arpels, etc., have also brought new watches with both appearance and function online.

In addition to the launch of new products, the Tmall live broadcast room of the watch exhibition brand is also constantly increasing. For example, IWC invited Wang Yang, an actor who has recently become popular, to taste the first new watch with fans in the live broadcast room.

It is reported that this year, WWG not only actively deployed online channels such as Tmall and JD.com, but also on social media accounts such as Douyin, Xiaohongshu, WeChat, and Weibo, netizens can also see relevant reports about the exhibition.

The layout of e-commerce channels in the Chinese market and the search for Chinese celebrities as brand spokespersons shows that brands attach great importance to the Chinese market. Hayek, CEO of the Swiss Swatch Group, said: "Chinese consumers are now more price-sensitive and hesitate for a long time before making a purchase decision. But in the long run, the potential of the Chinese market is still huge. People want to be successful, they want to work, they want to earn more, they want to go out, they want to travel, and of course they want to buy watches. ”

Reach out to the younger crowd

Intuitively, most people would think that Swiss fine watchmaking, that is, mechanical watches, is the main audience for older people. However, judging from some measures taken by watch brands in the past two years, brands are also trying to get closer to young consumers.

Some watch brands are now partnering with celebrities who are popular with young consumers and inviting them to be brand ambassadors. For example, during the WWG exhibition, Zenith invited brand spokesperson Xiao Zhan to walk into the live broadcast room of the Tmall flagship store to display the new flagship series of watches, which instantly poured into 340,000 people to watch, ranking first in the live broadcast room of Taobao watch glasses. Chopard's global brand ambassador, Zhu Yilong, also appeared at Chopard's flagship store to increase interaction with consumers.

In addition to inviting young people's favorite celebrities to endorse, brands will also shorten the distance with young consumers through offline experience activities. For example, Jaeger-LeCoultre's The Reverso water curtain music show enhances consumers' offline experience through a variety of presentation forms, and attempts to transform into a younger generation.

In addition, in the past two years, brands have also been actively creating immersive exhibition spaces to meet the preferences of young consumers. According to the data, WWG, which opened to the public for the first time in 2023, has an average age of 35 public day ticket buyers, and 25% of ticket buyers are under the age of 25, not to mention the estimated 700 million people reached through global social media communication. Jean-Frédéric Dufour, President of the Watches and Wonders of Geneva Foundation (WWGF), the organizer of the fair, also said in his opening speech at this year's WWG: "Young people remain a priority group. ”

WWG's "prioritization" of young people is more than just rhetoric. During the exhibition, large visitors can interact with watchmakers, and young visitors can also participate in hands-on workshops for children, and the immersive watchmaking experience can bring young consumers closer together. Last year's nighttime party also continued, with DJ sets, live music and street performances.

Investment attributes are reduced

High-end watches are making a lot of money, but we have to admit that the market performance is not as good as before. Previously, Volkswagen once used high-end watches as a financial tool, but in the past two years, high-end watches have also performed mediocre in the second-hand market. According to a report by Morgan Stanley and WatchCharts, Rolex has been frustrated in the second-hand market for seven consecutive quarters, with the brand's watch prices falling by 1.6% in the second-hand market in the fourth quarter of 2023 and continuing to decline since peaking in May 2022. Rolex was not alone, with Patek Philippe and Audemars Piguet also falling even more, by 4.4% and 4.5% respectively. According to the report, the three major brands account for 66% of the second-hand market share of high-end Swiss watches, and the price decline of the three major brands dragged down the second-hand high-end Swiss watch market by 2.8% in the fourth quarter of last year.

Since mid-2018, the prices of Rolex, Patek Philippe and Audemars Piguet watches have risen by an average of 20% per year, outpacing the average annual return of the S&P 500 of 8%, according to the Boston Consulting Group and secondary market dealer WatchBox. However, since the market peaked in the first quarter of 2022, the prices of popular watches such as the Rolex Daytona, Patek Philippe Nautilus and AP Royal Oak have fallen by more than one-third.

Jean-Frederic Dufour, CEO of Rolex, said in an interview that he was not in favor of comparing watches to stocks, and that they were making products rather than investments. In addition, he stressed that 2024 will be a challenge for the entire watch industry due to the sluggish market environment. In times of economic upturn, manufacturers tend to produce too many watches, and as the market cools, manufacturers respond to the pressure with discounts, which can hurt the value of the product.

Due to a number of factors, the popularity of the high-end watch market has decreased. In the future, whether the purchasing power of young people can bring high-end watches back to their peak, our reporter will continue to pay attention to the report.