The Chinese Time Bomb

Luxury watch brands are responding to booming Chinese demand in a number of ways. Joyce Yip takes the time to find out more.

What does Buzz Aldrin, who wore an Omega watch when he set foot on the moon in 1969, and Chinese actress Ziyi Zhang have in common? They both became Omega’s ambassadors in the same year in 2009.

While Aldrin’s fame has been spread over decades, Zhang, in 2008, was the highest ranking woman on Forbes’ list of China’s top 25 stars and was again named the woman with the greatest social influence in China in 2009.

Two years after Zhang’s recruitment, Omega has risen to the “second most searched for” luxury watch in 2011 worldwide with less than a 3% gap behind Rolex, according to the World Watch Report 2012. Within the total percentile, China accounted for 30% of those searches. This number comes as no surprise given the Mainland overtook the US this year as the leading market with the highest number of luxury watch searches.

Luxury watches have been speaking to the Chinese for some time now. Cartier was among the first to launch an entire jewellery and watch collection in jade, diamonds and jadeite in 2009. The year after, Panerai started its Chinese zodiac series, soon to be followed by Richard Mille’s Jackie Chan series and a Blancpain equipped with the traditional Chinese calendar.

But not everyone is as excited about the Chinese market. IWC, Patek Philippe and Zenith have remained poised, yet high on the radar. In light of the growing pressure from the East, even a sector that has always prided itself on its prestigious Swiss roots, feels the urge to cater to Chinese consumers, although its efforts have yet to be proven effective compared with the classics.

So for luxury watch marketers in the region, who will all admit they are dancing to a different niche of eyeballs, their challenge is to find the right choir to preach.

The Chinese enjoy the Western idea of luxury, but what does it mean to them as a culture? These special editions help spark that resonance.

Andrew Wong

Starcom MediaVest Hong Kong deputy general manager of digital

King Lai, managing partner of Group M which deals with Swatch Group in China, says it’s a matter of creating that next hot thing, no matter the orientation.

“Yes, timelessness works in China; people appreciate the heritage and prestige, but as consumers mature, they’re also looking for uniqueness,” he says. “And from the brand’s perspective, if it’s going to make something new, why not make it Chinese-specific?”

Andrew Wong, deputy general manager of digital for Starcom MediaVest Hong Kong which handles a few Richemont accounts, says the two approaches work in parallel where special editions speak to a more flamboyant niche and the classics sell a confident heritage.

“One believes it’s strong enough without changes,” he says. “The other talks to the type of audience who wants something really special, something to show off their social status. It’s a completely different set of self fulfilment.”

But that’s not to say these avant-garde crusaders are steering away from their roots. On the contrary, they need to have established a strong heritage for these special editions to work, says Simon Tye, executive director of Ipsos in Hong Kong, which recently released a report on luxury retail in Hong Kong and China.

“Luxury watches are meant for an elevated elite; they don’t need to change to speak to a mass consumer,” he says. “The Chinese enjoy the Western idea of luxury, but what does it mean to them as a culture? These special editions help spark that resonance.”

So if brands are not keen to recruit a new ambassador or pump out special editions any time soon, can they at least toot their horn on the fast-growing social media train in the country?

That’s what IWC did. It currently leads in the digital world with 220,000 Facebook fans and 6,000 followers on Sina Weibo, as recorded by World Watch Report in January 2012.  Interestingly, the size of IWC’s online stage is a contrast to luxury watches’ general reluctance to join the Chinese social media wave: the report found only one-third of the brands were on Sina Weibo at the beginning of the year. Patek Philippe even goes to the extreme as the only haute horlogerie brand without a social media presence.

But for Tye, both routes work.

“The people who buy these watches are a very different segment of luxury customer; they know what they want – so in that sense, they don’t really need the online space. On the other hand, these platforms create a sense of aspiration for the masses.”

Wong agrees and adds the importance of going digital doesn’t always ring true with luxury brands.

“The message can be delivered via private events, which watch brands love, and it’s something that has been proven to be quite effective. We also need to cater to the shopping tastes of our customers as well.”

Whether staying put or designing to their tastes is the way to go for luxury watches, one thing is true: China’s demands cannot be ignored – it’s just a matter of finding out what it wants and how it wants it.