Chrono24 is one of the main new actors of the watch market in the digital age. This leading global online marketplace for buyers and sellers of vintage and pre-owned watches, a German company with offices in Asia and the USA, is now aiming for a higher goal: convincing the brands themselves, which have been quite wary until now, to also sell their own watches directly on the platform.
With around one million registered users making transactions worth a billion euros annually, Chrono24 is sitting on a gold mine of data – meaning actual buyers of watches – to try to win their hearts and minds.
Among the main new actors that appeared with the advent of the internet era, Chrono24 has established itself as a leading global marketplace for buyers and sellers of vintage, pre-owned and, increasingly, new watches. Brands as diverse as Frédérique Constant, Porsche Design and Louis Moinet have indeed opened their own selling platforms on Chrono24. More brands will follow, says the company.
Is it the beginning of a closer relationship between the pre-owned market, which has been booming online this last decade, and the contemporary market, which has been struggling over the last three years and is now rushing to develop e-commerce solutions? More than 2,000 dealers already sell watches online on the platform, which is hoping to gain more leverage with global watch collectors.
This is why Chrono24, which employs more than 150 people from Germany to New York and Hong Kong, for yearly transactions of a billion euros thus organised a first “get-together” last January at its headquarters in Karlsruhe, Germany. “The event attracted more than 30 collectors, some of them from as far away as London or New York. We will now move forward with organising these kinds of meetings in other parts of the world and on a more frequent basis,” says Tim Stracke, co-CEO of Chrono24. Europa Star met him in order to better understand how the platform works, and what it hopes to achieve.
Could you share with us a few numbers about Chrono24, to give us a clearer picture of the platform? Such as the volume of transactions by year, the number of unique users, number of dealers, etc
We assume that one out of three watch lovers worldwide uses Chrono24 from time to time. And we assume that almost all collectors that use the internet also use Chrono24. When we talk to dealers, it almost never happens that they don’t know us. We attract between 10 and 12 million visits per month on our platform. In 2017, the transaction volume generated through Chrono24 was one billion euros. And it is growing by around 25% per year.
What is the profile of the watch buyers, on one side, and the sellers, on the other?
Almost all watch acquisitions are made by private individuals. People use Chrono24 for inspiration, to compare prices, to get information and ultimately to buy or sell watches. On the sales side, more than 90% of sellers are professional dealers. They include established names like Govberg in the USA. We have 2,400 dealers registered and active on Chrono24.
What is the average price of the timepieces traded on the platform?
It lies between 7,000 and 9,000 euros. The prices start at a few hundred euros, up to more than one million euros. Watches that are really expensive are usually not transacted directly through Chrono24. They still use our platform find the watch and communicate, and then operate the transaction on their own.
How does your business model work?
It is a mix of listing fees and transaction fees. Our current goal, however, is much less about generating revenue than about increasing the user base and expanding the platform through partnerships with brands and the sales of new watches. The main benefit for brands who join us is that they have access to a global user base through Chrono24, and can convey their very own message to these users.
Could you tell us more about the growth of the business of selling pre-owned watches online since you started, just a few years ago?
Chrono24 was founded in 2003. We have always focused on listing as many watches as possible, and this has attracted many sellers and subsequently buyers onto the platform. It has made us the global player for buying and selling luxury watches online.
But we are not only a marketplace. We are also a platform that holds a lot of information and data about its users. We want to use this information to help our users find the best watches. Now, we know pretty well what the users like, looking at their search profile and what they have bought. We have also introduced a feature where buyers can upload their existing watch collection so that we can make tailor-made suggestions to them.
Do you share this data with brands?
First of all, we take private data protection very seriously. We do share metadata with brands, to give them deeper insights into their industry. We also help them to get access to watch lovers and collectors worldwide – but we won’t and are not allowed to hand over any personal data to them. For instance, we know that when someone is looking for a certain model, he might also like another model.
Imagine you go to a store and you say that you are interested in an Omega Speedmaster, and the seller presents you some Speedmasters, as well as, based on our research, watches from other brands with the highest proximity. It is purely based on data. It gets increasingly interesting for the watch brands, even though they might not publicly work with us on our platforms.
KEY NUMBERS ABOUT CHRONO24
• 10-12 million visits per month
• 1 billion euros in transaction volume generated in 2017
• 2,400 professional dealers registered
• More than 90% of sellers are professional dealers
• 100,000 watches bought/sold through Chrono24 in 2017
• The most expensive watch ever sold through Chrono24: a Patek Philippe Sky Moon Tourbillon, for more than one million dollars
How do you intend to convince them to move to an official partnership?
More and more established watch brands do want to work directly with us, because of our global reach to potential buyers, but they also realise that it is sometimes easier to convey the brand message via the internet than in the store.
A lot of brands have a strong heritage and the question is: are all salesmen able to talk about it to potential buyers? In many cases, the founder or the watchmaker of the brand can do it much better and more emotionally, using videos and images. It is sometimes better than talking to a seller, who might not know the brand very well.
But will buyers of pre-owned or vintage watches convert to buyers of new watches?
Chrono24 already has the categories of vintage, preowned and new watches. The biggest by far is the vintage and pre-owned watch segment, but we are trying to develop the new watch segment as well. We are already working with brands that want to directly sell to our users.
Some brands do it openly in our newly established brand boutiques; other brands just advertise on our platform or work with us in other ways to build a direct bridge with the potential customer. For example, if a really exclusive brand wants to host a collectors’ dinner in Dubai or Tokyo, we can easily invite 20 to 30 people in the city, who have a very strong tendency to buy this brand or who have bought similar brands in the past.
Watch brands are very cautious about the pre-owned market, which may look like a “parallel market” jungle… What kind of relationship are you trying to establish with them?
We are in talks with almost all brands and are discussing potential ways of working together. Some brands are already openly selling on Chrono24, others use a partnership to connect to potential buyers worldwide, and we are just opening discussions with yet other brands. But there are very few brands that are ignoring us, and not looking for a discussion at all. We are open to discuss with all brands. But maybe we still need a few big names working openly with us, to overcome the psychological barrier.
You know the watch buying habits of millions of people around the world. How do you collect this data?
We know from our users what their core interest is by looking at their search behavior, and we use this to make better suggestions. We also gather data when users upload their existing watch collections.
But the brands that join your platform would also get access to data… and what about other brands that are not on your platform but which are interested in your data?
We are open to all kinds of partnerships.
Image: Most popular brands by clicks on Chrono24
What measures do you take to avoid counterfeits, a phenomenon that we see a lot online?
We do careful due diligence on all the dealers that join the platform, in order to be sure we keep only the best ones. In addition, when you buy a watch on Chrono24, we hold the money in an escrow account until the watch is safely delivered to your home. Only when you say that you are happy with the watch do we release the money.
Otherwise, you get your money back. It is very rare that a watch is really fake: there have been fewer than five returns over the last few years because of authenticity issues. And more than 100,000 watches are being transacted through Chrono24 per year. We would rather kick a dealer off the platform than risking having a single fake watch.
Another issue is when watches are not in the promised condition…
That is also part of our policy. You can return any watch that has been bought on Chrono24, no questions asked. But very few watches are actually returned: very low single digits. The most common reason for returns is that the watch is not as it was described on the platform. Only around 1% are returned without a specific reason, just because the buyer does not want it anymore, mostly because the watch is a bit smaller than expected, not because it is fake or damaged! Our total return rate is less than 5%.
Indeed, the “touch and feel” experience remains important when it comes to watches, to avoid the situation where you don’t realise until it has been delivered to your home that the watch is too small. Have you thought about ways of displaying the watches or organising meeting places for the buyers and sellers, like physical “lounges” in major cities?
We are indeed considering all kinds of measures to bring people together and to build trust during the transactions. Chrono24 is a lot more than a digital market place. We are also considering developing logistics services. There are a lot of developments to come yet.
Article originally published on Europa Star. Republished with permission.
Cover image credit: Chrono24. Image: Tim Stracke, Co-CEO of Chrono24