China - The New Frontier For Luxury Watch Brands

China has become the new frontier for luxury watches. Once known solely as the home of the knock-off, the Chinese market is booming as its burgeoning middle class scans the catalogues of the big international watch brands for ways to announce their arrival. They don’t want a replica. They want the real thing.

According to the Federation of the Swiss Watch Industry, exports to China jumped 58.8% last year, higher than for any other country. The World Watch Report 2010 found that online demand in the emerging markets of Brazil, Russia, India and China jumped 24.5% last year, and that China accounted for 59% of that jump. Omega and Rolex were the brands most searched for, Omega in China and India, Rolex in Brazil and Russia.

A piece on Current Affairs: The Definitive Luxury Blog reported that Asia-Pacific luxury watch and jewellery markets (excluding Japan) now account for 31.2% of the total global market, according to a Datamonitor study. The region's watch and jewellery markets are the fastest growing in the world and in five years time will account for half of global watch and jewellery sales.

Datamonitor analyst Ruta Perveneckaite told Current Affairs: “As wealth increases through the region and expectations of future prosperity build, the conventional inclination to save is declining…the leading watch and jewellery brands recognise the importance of developing operations in these markets."

One brand after another is looking to cash in, from Armani to Patek Philippe and there has been a surge in brand-controlled stores in China’s major cities. Omega has ten Omega Boutiques in Beijing alone, not to mention its other outlets. Small wonder, since it is a way not just of promoting the brand but of defending its quality in the face of the black- and grey-market threat.

It is not only Omega who, with a Chinese brand ambassador in the form of actress Zhang Ziyi [pictured above at a store opening] and sponsorship of the China Golf Tour, is homing in on this booming market. Parent company Swatch recently opened the Swatch Peace Art Hotel in Shanghai. It’s safe to say that this is more about watches than either peace or art. Rolex, meanwhile, is leveraging its nautical associations, sponsoring everything from yachting races to a touring exhibition on the deep ocean.

As China becomes more important to the big brands, those brands are also responding to Chinese tastes. In mens' watches, for instance, they are focusing on dress rather than sports watches, and on thin and sometimes super-thin profiles rather than the bulked up timepieces that emerged over the last bling-ridden decade.

A New York Times story earlier this year cited Vacheron Constantin’s razor-thin Historique Ultra-Fine 1955 and Piaget’s Altiplano as direct responses to the power of the Chinese market. It also noted that Omega’s biggest seller in China is the Constellation, a dress watch.

Check out Cartier, another big seller, and its Panthere watches which have a distinctively Chinese feel. Even Panerai has introduced a Luminor with a Chinese motif.

China may once have copied the hottest watches. Now it is beginning to set the trends.