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Luxury makes way for mid-range at world’s largest watch fair

The mounting global pressures impacting the horology industry were evident at the world’s largest watch and clock fair. MARTIN FOSTER reviews movements and trends from the event.

The Hong Kong Watch & Clock Fair (HKW&CF) opened its doors on September 6, 2016 at the Hong Kong Convention and Exhibition Centre.

The five-day fair attracted more than 20,000 buyers – up 2.4 per cent over the previous year – and reported a good increase in buyer numbers from Asian markets. These included India, Indonesia, Japan, Malaysia, the Philippines and Thailand, while a rise from other regions including Australia, Sweden, Russia, Canada, the US and Iran was also recorded.

This year marked the 35th edition of the world’s largest event for watches and clocks, and visitors came to see more than 800 exhibitors from 26 countries and regions. New this year were exhibitors from Iran, Lithuania, Monaco, Thailand and Turkey.

Of late the Swiss have taken notice of the growing importance of the HKW&CF and the access it provides to the world’s largest evolving and developing market. Within the fair, the high-end Salon de TE showcased luxury timepieces from around 150 established brands, including 40 leading Swiss brands from both the Swatch Group and Richemont stables. Many of these exhibited under the umbrella of Hong Kong distributor Prince Jewellery & Watch Company, which is the supplier for Blancpain, Bovet, Breguet, Bulgari, Chopard, Corum, DeWitt, Franck Muller, Glashütte Original, H Moser & Cie, Jaeger-LeCoultre, Piaget and Zenith.

Catering for Asian demand for top-quality Swiss watch brands, the Swiss Eminence pavilion within the Salon de TE returned to the fair. It had been introduced at the 2015 event, and this year showcased six Swiss brands – Balco, Buler, Doxa, Enicar, Juvet and Sultana. The Swiss Independent Watchmaking Pavilion also brought seven watch brands bearing the concomitant ‘Swiss Made’ label.



Indicative of the global issues assailing the watch industry, Swatch Group recently reported an appalling 54 per cent fall in turnover for the first two quarters of 2016. Swatch Group is optimistic that there will be improvements in these results during the remaining months of the year but these first half-year results created an underlying frisson of nervousness when talking of the industry prospects.

Earlier this year Richemont group announced that it would cut up to 350 jobs in Switzerland and has just recently reported its half-year figures, also showing a significant tumble in turnover.

Hong Kong Trade Development Council deputy executive director Benjamin Chau alluded to the contraction of luxury markets in a press release from fair organisers.

“Amidst the economic downturn, demand for luxury watches and clocks remains weak,” Chau said. “We can see that the industry is shifting from traditional luxury brands to mid-market brands, independent brands and even new smartwatches in the market… since the smart and light-smart watch market is booming, more and more traditional watch companies are seeking to gain a share in the sector. I believe more varieties will be introduced into the market and offer more choices to buyers.”

The major brand houses are openly sceptical of the smartwatch phenomenon and they rightly point out that price points and the product descriptions are utterly different; however, some opinion offered during the fair suggests that those who have never worn a watch and who buy a smartwatch will tire of it and graduate to a ‘real’ watch. The industry shall see what transpires and comment in due course.

Chinese head west

Every year Chinese watch production shows an increasing understanding of what is required to join the elite company of the best European luxury makers and this was shown by a huge advance of quality and finish.

Chinese, mainland watchmaker Sea-Gull exhibited some very special pieces but still doesn’t seem to understand – or perhaps want to understand – that its luxury products could be very attractive to western markets. Sea-Gull has no promotional material in languages other than Chinese and rejects any approach to give their watches exposure in the western press. Thus, there’s simply nothing to report from the world’s biggest producer of low to mid-range watches today.

Shanghai Watch Factory, one of China’s oldest watchmakers, has been very difficult to penetrate in past years; however, it has recently opened up to western marketing.

The manufacturer produces an 18-carat gold men’s model with a rolling tourbillon under a bubble dome in one-piece sapphire crystal. If more tourbillons are preferred then Shanghai Watch Factory also makes a model with dual tourbillons mounted within a 12-hour carrousel platform, visible within part of the dial.
In addition, it produces a range of watches with exquisite enamel dials of traditional Chinese subjects, which are striking in any language.

Swiss independent watchmaking pavilion
Swiss independent watchmaking pavilion
Exhibitor stand of sea-gull
Exhibitor stand of sea-gull

A Hong Kong/China company seeking wider opportunities is PTS Resources. This is a well-established Hong Kong watch-movement business with more than 30 staff that enjoys a long-term partnership with mechanical watch movement factories in China.

PTS distributes high-quality mechanical and quartz watch movements including TMI, Ronda, Miyota, ISA and ETA, and it is able to manufacture custom-made pinion parts, wheels, rotors, bridges and other watch components according to buyer specification.

Over the last decade it has been easy to assess and compare the big advances in the quality of Chinese watches just by visiting PTS’s stand. Every year the variety of calibres PTS exhibits shows how well the mid-range Chinese production matches mid-range watches produced in Europe. The reasons are self-evident as to why China is now the largest producer of watches in the world.

All major European tool manufacturers again exhibited this year, such as Bergeon, Witschi and, of course, Chinese makers but these exhibitors really only have relevance for Asian, Hong Kong and mainland Chinese buyers.

The Swiss makers are having a hard time from an over-valued Swiss Franc in tandem with a fading world market for luxuries brought on by global political insecurities. In turn, this has created the worst scenario for the Swiss of having to buy back stock in an over-supplied market or stand back and watch the development of the hated grey market as accredited suppliers dispose of excess stock through the ‘grey’ pipeline. Both the Chinese and Japanese makers are well placed to take advantage of this and the industry must wait and see how the drama unfolds











ABOUT THE AUTHOR
Martin Foster

Martin Foster is a freelance journalist and Jeweller’s resident watch ‘guru’. Based in Sydney, Martin attends major international exhibitions covering the watch and timepieces categories.









Monday, 24 September, 2018 02:49am
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