Fashion watches now a draw on the mainland
Updated: 2014-10-24 08:03
By Selena Li in Hong Kong(HK Edition)
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Watchmakers have jumped on the fashion-watch bandwagon on the mainland as consumers have become less inclined to go for premium and luxury watches amid the ongoing nationwide frugality and anti-graft campaign.
US-based watch supplier Fossil Group sees the watch industry as being strongly shaped by its business in Asia, including an estimated $3.4-billion mid-tier watch market on the mainland.
"There's a growing number of consumers who consider a watch as an accessory that complements what they are wearing," said Fossil's senior vice-president Jack Quinlan. "Chinese consumers are more fashion-oriented than their US counterparts," he said.
He reckoned that nearly 60 percent of watch purchases made by mainland buyers arises from a propensity to add brilliance to their daily fashion outfit.
If merely telling the accurate time appears boring to them, then mainland consumers would like to ask for more. "We aim to sell one piece for each outfit among our customers," Quinlan said, adding that middle-class mainland consumers have greater capacity to buy and choose what they want.
After years of vigorous growth, the mainland's watch industry is expected to post a constant compound annual growth rate of 11 percent from 2013 to 2018, propelled mainly by a steady demand for timepieces as daily necessities, according to independent market research company, Euromonitor International.
"Our group sees significant potential for doing business with medium-priced, Swiss-made watches in global markets, particularly in Asia," said Quinlan. Mid-tier watches mainly refer to those in the price range of between $100 and $1,000.
Fossil Group - the world's fourth-largest watchmaker with a capacity to produce 400,000 Swiss-made timepieces annually, particularly for its licensed brand Burberry, Emporio Armani Swiss and its own label Fossil Swiss watches - is bullish about sales opportunities for its Swiss-made products.
"For China, 67 percent of its people said they currently own one watch, which is a pretty amazing figure compared with only 38 percent in the US," Quinlan told China Daily, "Certainly, it's wise to let more Swiss watches land here."
Hong Kong, said Quinlan, is the gateway to a broader mainland market. Although the landscape has changed, the contribution by mainland visitors to watch sales in the SAR remains large. Sales, on the other hand, may have declined due to the fact that more watch retailers have set up shop on the mainland and in Macao.
"We don't see the declining number of mainland tourists in Hong Kong as impeding our revenue growth in the region. We have established more sales centers at alternative travel destinations, including South Korea and Japan, to win back mainland customers," Quinlan said.
According to Fossil Group's second quarterly report for this year, wholesale turnover for watches in the Asia Pacific region rose by 9.9 percent compared with the corresponding period a year earlier, and against 1.7-percent growth in North America.
"The business in Asia is growing as fast as the company itself," Quinlan said. In the past decade, Fossil's compound annual growth rate in Asia reached 26 percent - 9 percentage points higher than the group's global revenue growth.
selena@chinadailyhk.com
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Jack Quinlan, vice-president of Fossil-Asia Pacific, says international luxury brand names see Hong Kong as the gateway for mainland customers with strong purchasing power.? Provided to China Daily |
(HK Edition 10/24/2014 page8)