HONG KONG — No other sector was hit quite as hard as luxury watches after China initiated its crackdown on officials’ gift-giving.
While the industry was left limping for a time, those days are over. Swiss watch exports to Hong Kong, its largest market, posted a 35.7 percent jump in February, the Federation of the Swiss Watch Industry reported on Tuesday marking the 10th consecutive monthly rise.
Globally, the industry may be contending with the Apple Watch nibbling market share, but Asia seems to be having a grand time. Longtime Panerai chief executive officer Angelo Bonati confirmed the brand was back to double-digit growth after dipping to single digits in 2015 thanks to Asia, while Swatch Group ceo Nick Hayek also confirmed to WWD that there was a strong acceleration in the last year boosted by China, with Swatch recording some of its best months in company history.
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In Hong Kong, one only needed to clock the upswing in-store openings across town this month. Thomas Meier, ceo of Glashütte Original, arrived to open the brand’s first boutique in Hong Kong in Harbour City, while Audemars Piguet felt confident enough to open up its VIP lounge concept, AP House, a space not aimed at driving direct sales but at cultivating the brand’s lifestyle. Its first house in Asia and fourth house worldwide, clients can use the location to “invite friends for lunch, organize a business meeting,” Audemars Piguet ceo François-Henry Bennahmias said. “There’s no obligation to buy a watch. You can take a seat, relax and chill out, if that’s how the mood takes you.”
The upbeat mood is also rippling across to the secondhand market, with Sotheby’s, Bonhams and Phillips all appointing new heads of watches within the last six months.
New to Bonhams is Tim Bourne, although the watch specialist has observed the regional market for the past two decades, first working in Asia in 1997.
“Yes, it has slipped back a little bit for the past two or three years but within the last six months to a year seen a resurgence in the market,” Bourne said of the region. “I foresee the sales will start to grow quite significantly again.”
“It is competitive, definitely,” said Thomas Perazzi, head of watches Asia for Phillips. Perazzi, who joined the auction house last November, moving from Geneva, has been struck by the youth of the new collector in Asia.
“‘I would say that in Europe and in the U.S., the average age is between 30 and 50 and here in Asia we basically have collectors that are as young as 20 years old and then some who are 60 years old — the spectrum is much wider,” he said.
Sam Hines, who took on the global head of watches position at Sotheby’s in January and is based in Hong Kong, said some of the collectors arriving on the scene are as young as 18. Vietnamese buyers, in particular, are starting to make a name for themselves. Hines also noted that wealth tends to cluster around tighter circles in developing economies, which are excellent conditions for brewing a bit of competitive collecting.
“At the moment, the collectors there have a huge hunger for Richard Mille,” Hines said. “The collectors who are wealthy enough at this level tend to mix in the same circles. When one collector has the ultimate Richard Mille, their friends want to have one, too.”
That’s not to say that the market operates by quite the same rules as it did a few years ago. There is a greater emphasis on value, with even elite-level collectors showing price consciousness.
“Back in 2014 during the golden years we had massive sales and really the hunger for any watches was huge,” Hines said. “I think that now we are getting thinking collectors who are more selective but there is a huge demand for rarity and very difficult-to-find watches.”
Bourne said big and brash record-breaking pieces make for great headlines but he hopes to distinguish Bonhams by listening to its buyers, no matter how deep or shallow their pockets are.
“A watch could be something that costs $50,000 or $500,000 but to that one collector that’s really, really important to him…There are very interesting and fascinating and quite historical watches that can be 50,000 to 70,000 Hong Kong dollars [$6,300 to $8,900],” he said.
Bourne added: “The auction houses, I feel, perhaps are not giving as much attention and are moving that type of merchandise straight online. It’s not a lot of interaction with the actual collector themselves.”
His advice? Respect the financial position of the customer and encourage all levels of watch buying.