The Luxury Watch market in China: Status, sophistication and counterfeiting

31Jan2020

Luxury Watch Market and Consumers in China

Rolex, Omega, Patek Philippe, Cartier, Channel, Longines, Tissot, Rado, Blancpain and Piaget are the top ten luxury watch manufacturers ranked in the Chinese market in 2019. The luxury market in China has been soaring from 2017 to 2018 with a compound growth rate at 40%, which makes China a big potential market for luxury manufacturers to acquire and compete. The luxury watch market in China is estimated to be worth 19.4 billion RMB.

Men between the ages of 25 to 40 are the main consumers in the luxury watch market in ChinaLuxury watch consumers in China buy watches as to depict status and consider 5,000 RMB as an entry price for luxury watches. Consumers learn information online but tend to purchase luxury watches in physical stores. “Swiss Made” watches are the first choice for luxury watch consumers in China.

[Data source: Forward the iresearch ‘luxury watch consumers gender/age distribution in China (2019)’]

Celebrity Endorsement and Soft Marketing

According to the research result given by the market research company Synovate, wealthy Chinese people like to purchase luxury with distinct visual logos and high brand awareness. Therefore, brand awareness becomes a key factor of Chinese consumers’ purchasing decisions. As data provided by iresearch, the most efficient strategy to enter and occupy the luxury watch market in China is celebrity endorsement.

[Data source: Forward the iresearch ‘The marketing strategies of luxury watches in China that are popular among consumers (2019)’]

Chopard China marketing strategy

In May 2018, a Swiss luxury watch brand, Chopard in China declared Wang Yuan (Roy Wang), a pop star, as its ambassador. The declaration Weibo was reposted over one million times.

[Source: Weibo ‘Chopard declares Wang Yuan as its ambassador’]

However, the celebrity effect is not always long lasting. As of January 19^th, 2020, only 7 of Chopard’s Weibo that were related to Wang Yuan were reposted over 100,000 times. They were usually reposted around 20,000 times. Chopard’s brand exposure grows when Wang Yuan has TV shows or films on and when Chopard in China has special campaigns with Wang Yuan, such as the Valentine’s Day event with Wang Yuan. If Chopard in China uses celebrity effect as its primary market strategy in the luxury watch market in China, it needs to adopt the most popular celebrity as its ambassadors and keep him active in the public eyes to maintain the brand exposure in luxury watch market in China.

Soft marketing of luxury watches

Some famous brands prefer to use soft marketing in the luxury watch market in China. Although they do not sign any celebrity to represent their brands specifically, they ask celebrities to be guests at their brand events, sponsor film festivals, or plant ads in films to enhance the brand publicity. In 2012’s Cannes Film Festival, two Chinese film stars Chen Kun and Qing Hao were wearing Dior wristwatches. What’s more, many other Chinese film stars were wearing luxury watches too: Zhou Xun with Channel, Gong Li with Louis Vuitton, and Liangchao Wei with Cartier. These are all parts of the soft marketing effort made by luxury watch brands. It is obvious to see soft marketing has become a sustainable marketing strategy widely used by luxury watch manufacturers to better compete in the luxury watch market in China.

Status and Rolex in China

Rolex watches are meant to represent the upper-class income group individuals who live a lavish life. Therefore, unlike Chopard, it uses undifferentiated niche strategy all over the world, including the luxury watch market in China.

Chinese netizens responses to the Zhihu question ‘what was the experience after purchasing your first Rolex in your life’. The response with the most upvotes said he had looked for a Rolex Yacht-Master watch for three years in many different countries and finally got it in a small Rolex exclusive store in London. He felt purchasing a Rolex watch was a turning point in his life. Whenever he had the urge and pressure to make a decision, the Rolex reminded him to calm down because people who wear Rolex watches have to be sophisticated. When he noticed other people were staring at his Rolex, he felt proud and extraordinarily satisfied. Rolex was the first luxury watch brand that entered the luxury watch market in China after the Chinese economic reform. Rolex in China has a special place in the hearts of luxury watch consumers in China. They do not only treat Rolex as a symbol of luxury and prestige as other luxury watches in China, but also a timeless masterpiece. Although, some of the luxury watch consumers in China do not buy Rolex in mainland China because of the limited supplies and relatively higher price.

[Source: sina.com.cn ‘Rolex with Li Na’]

Brand awareness without social media

Rolex in China does not focus on short-term brand exposure or social media marketing since its brand awareness is high in China and its target segment is concentrated. Rolex’s marketing strategy focuses more on advertising artistic and athletic activities. Rolex has continued sponsoring tennis tournaments for many years and aligns with excellence in tennis. In 2011, Rolex signed an endorsement contract with Li Na, a trailblazer for tennis in Asia. Li Na referred Rolex as a booster for the tennis development in China. Rolex is driving the technological advancement, state of design and positive brand image to be ahead in the luxury watch market in China.

Luxury Watch market in China Faces counterfeiting

[Source: xw.qq.com ‘Guangzhou Customs seized counterfeit watches’]

Switzerland and Guangzhou Customs made an alliance against counterfeit watches. They destroyed a large number of counterfeit watches at the end of year 2019, which were worth around 350 million dollars. Experts said those counterfeit watches bore a remarkable resemblance to the authentic watches. The counterfeit watches caught in Guangzhou were not sold in China, but exported to Europe.

[Source: xw.qq.com ‘foreigners buy counterfeit watches’]

Many people buy counterfeit goods at Xiushui Street in Beijing, which is famous for its fake but good quality products. Counterfeit luxury watches from Xiushui Street are one of the most popular goods among foreign visitors.

Luxury watch brands should put more efforts on content marketing about the value of authentic watches and encourage consumers to buy watches at authorized stores. On the other hand, brands should also ally with government organization to seize counterfeit watches and strength punishments against counterfeiters, authorized dealers and counterfeit buyers.