2012 was a year of record achievements and landmark change in the luxury timepiece segment. For the first time in history, Swatch Group – owner of Breguet, Harry Winston, Blancpain, Jaquet Droz, Omega, Tiffany & Co., Longines & Rado to name a few – achieved sales of over 8 million CHF, an additional billion Swiss Francs when compared to the previous year.
At the very same time, the group – also the owners of several components manufactures – made the decision to limit supply to competitors, sparking an onslaught of M&A; activity by LVMH, Richemont, PPR and Hermès, in a bid to protect future supply and ensure the uniqueness of their products.
All the while concerns were raised as to the sustainability of stellar market growth in China, as government crackdowns on gifting and corruption looked set to make a dent in the luxury watch sector, a long-time favourite purchase within circles of Chinese officials.
“ 2012 was a year of record achievements and landmark change in the luxury timepiece segment ”
So it is with great interest that we take a look at the regions and product segments set to drive the industry in the coming year. According to the 2013 WorldWatchReport, launched by Digital Luxury Group this week at Baselworld, it will be another year of growing interest from the BRICS.
Swatch Group remains the giant to beat, significantly outperforming other luxury conglomerates when it comes to global consumer interests. Haute Horlogerie and Watch and Jewellery categories continue to grow at the fastest rate, as the gap between industry leaders Rolex and Omega narrows further.
Here we share the key insights from the 2013 edition of DLG’s WorldWatchReport, examining 62 luxury watch brands in 20 markets. Looking at 1,500 models and collections, based on DLG’s proprietary consumer interest tracking technology DemandTracker™.
Top 15 most searched luxury watch brands globally
According to the report, global consumer interest for luxury watches grew 3.3%, dominated by interest from China (up 36%), Brazil (up 29.4%), Russia (up 28.5%) and India (up 19.7%). For the second year in a row, China consolidates its leadership position ahead of the USA, where one out of four luxury watch searches now originates from China.
“Despite a reported slowdown in China often attributed to the reluctance towards government gifting, we can’t realistically forecast a significant market decrease in the mid-term," explains Pablo Mauron, General Manager, China, Digital Luxury Group.
“As the fast growing middle-class, quick wealth creation from tier 2 and 3 cities as well as increasingly important travel spending are strong drivers that are here to stay.”
Early signs of demand decline were recorded mostly in historically established and mature markets: the United States (-11.6%), Europe (-8.3%) and Japan (-13.6%).
“ Early signs of demand decline were recorded mostly in the U.S., Europe and Japan ”
The Haute Horlogerie category grew the fastest (+10.1%) thanks to brands such as Patek Philippe (#10, +16.7%), Vacheron Constantin (#19, +31.5%) and Breguet (#24, +8.6%).
The Watch and Jewellery was the second best performing category, growing by +7.7%, thanks to solid performances from Cartier (#3, +11.6%) and Piaget (#18, +12.94%).
Exposure to Asia played a crucial role in fuelling categories’ growth with 44% and 46% of demand respectively.
Evolution of category search breakdown (Y/Y 2011 – 2012)
Brands shine in different product segments and geographical zones. TAG Heuer is the most sought-after for chronographs followed by IWC, remarkably rising two spots in 2nd place, ahead of Omega.
Patek Philippe remains unrivalled for Tourbillons-related searches but was approached by Hublot (#2; up 3 spots) and rising star Richard Mille (#3, up 13 spots), which saw the strongest increase in brand interest in 2012.
Finally, the gap between world leaders Rolex and Omega is narrowing further. Rolex continues to lead the Global ranking thanks to its domination in mature markets such as the US and Europe as well as the Middle East and India. Omega’s continuing leadership in large, fast developing markets such as China, Russia, and Latin America has helped it gain ground on industry leader Rolex.
“Omega is on its way to create a shadow over Rolex in the long run. Major sport event sponsorships, ubiquitous celebrity endorsements and a competitive product offering are some of the key ingredients for the Swatch Group brand to grow further," suggests David Sadigh, Founder & CEO, Digital Luxury Group. "This could ultimately end up in reaching Rolex’s unmatched popularity 3 to 5 years from now.”
For more information regarding Digital Luxury Group’s full WorldWatchReport, please visit www.worldwatchreport.com
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