According to Times Finance, the watch data monitoring platform Watchcharts recently released a report that the ** index of the Swiss high-end watch brand Rolex in the second-hand market was ** 0 again in December after ** in November**5%；The index is down 30% from its previous high. A Shanghai-based watchmaker revealed, "At the end of 2022, we had an Audemars Piguet Royal Oak 26585, which was as high as 3.85 million yuan. In July 2023, it was sold with a price of 2.35 million yuan, with a direct loss of 1.5 million yuan. In the past year, the biggest drop in the transactions he has handled has been this Audemars Piguet. It's not just Rolex that has fallen out of favor in the second-hand market. Watchcharts data shows that the overall **index** of pre-owned watches in 2023 is 138%。Rolex, Patek Philippe, and Audemars Piguet's three major high-end watches fell by .6% and 185%。
High-end brands represented by Rolex and Patek Philippe are gradually "falling out of favor" in the second-hand market, making second-hand watch dealers and leveraged speculators complain.
Shen Zhengqi, the founder of a small luxury watch shop from Shanghai, told Times Finance, "At the end of 2022, we will have an Audemars Piguet Royal Oak series 26585, which will be as high as 3.85 million yuan. In July 2023, it was sold with a price of 2.35 million yuan, with a direct loss of 1.5 million yuan. In the past year, the biggest drop in the transactions he has handled has been this Audemars Piguet.
However, Shen Zhengqi has seen far more cases of "blood loss" than that. According to its observation, many popular watches on the market have fallen by nearly 4% compared with the previous high, "many newcomers who have leveraged earlier have been 'cut' and scarred!" ”
Behind the loss of second-hand watch dealers is that the attractiveness of high-end watches to consumers is weakening.
Recently, watchcharts, a watch data monitoring platform, released a report that in December 2023, the **index of the Swiss high-end watch brand Rolex in the second-hand market was again **05%。The ** Index is based on the platform's tracking of 30 of Rolex's most popular phenotypes.
As early as 2022, the decline of Rolex** has begun to appear. According to watchcharts, the Rolex** index reached 3After a peak of $810,000, the index continued to last**, and by December 2023, the index was 2$630,000, down 30% from the previous high.
The second-hand market reversed
It's not just Rolex that has fallen out of favor in the second-hand market.
From the second half of 2022, high-end watches have been diving all the way in the second-hand market. Although this decline eased in early 2023, the inflection point has not really arrived.
According to a Morgan Stanley report quoted by Global Fashion**WWD, in the fourth quarter of 2023, high-end watches, including Rolex, Patek Philippe, Audemars Piguet and other brands, were in the second-hand market***28%, which is the seventh consecutive quarter of decline. According to a report by Morgan Stanley, the above three brands account for more than 60% of the second-hand market share of high-end Swiss watches.
Watchcharts data shows that the overall **index** of pre-owned watches in 2023 is 138%。Rolex, Patek Philippe, and Audemars Piguet's three major high-end watches fell by .6% and 185%。
In just three years, the watch market has experienced a reversal.
After the outbreak of the new crown epidemic in 2020, the United States, Europe and other countries implemented consumption stimulus policies, and luxury consumption soared. At the same time, global consumer risk aversion has surged, and a high-end watch with value preservation attributes has almost become the "hard currency" of the market.
According to Bain & Company's 2021 China Luxury Market Report, China's personal luxury goods market grew by 36% in 2021, nearly 471 billion yuan, nearly doubling its size compared with 2019. Among them, the growth rate of high-end watches reached 30%.
Times Finance also reported that at the beginning of 2022, the "Rolex" with soaring demand appeared in the second-hand market with a price of one day.
At that time, the public price (the official price of the brand) was 23The 190,000 yuan Rolex Black Circle Daytona soared to 31 in just a few monthsmore than 90,000 yuan; The public price is 46Patek Philippe can sell for 1.2 million yuan in the second-hand market for 10,000 yuan; The other is priced at 17Audemars Piguet Royal Oak for 10,000 yuan can sell for more than 550,000 yuan.
However, the current chill in the second-hand watch market has not been transmitted to the first-hand watch market. In contrast to pre-owned watches***, brands such as Rolex have completed multiple rounds of price increases in recent years.
According to Gorgeous Chronicles, Rolex has raised the price of its products again in January 2024. Among them, a Rolex Submariner** from July 7, 2023130,000 yuan rose to 7660,000 yuan, an increase of about 7%.
Regarding the reason for the price increase of first-hand watches, Zhou Ting, president of the VIP Research Institute, analyzed to Times Finance and Economics that it is more to promote sales. "The first is to create a price increase posture and give customers the 'illusion' of value preservation;The second is to further improve the brand image. The more high-end the watch, the more the price is for sales and profits, and the purpose is to realize it quickly. ”
She also revealed to Times Finance that although the price is **, the discount of a high-end watch brand and the brand's support for dealers are increasing. In addition to some popular products, many styles are actually being sold at reduced prices in disguise. Zhou Ting believes that this also has a great impact on the second-hand market.
High-end watches "disenchant".
Changes in supply and demand are the main reasons affecting the second-hand market**.
Bain & Company mentioned in the 2022 China Luxury Market Report that China's watch market shrank by 20%-25% compared to 2021. Data from the Federation of Swiss Watch Industries also shows that Swiss watch exports to Chinese mainland increased from 29 in 2021CHF 6.7 billion decreased to 25 in 2022CHF 6.9 billion. In 2023, the monthly data of Swiss watch exports to Chinese mainland also recorded a year-on-year decline several times.
Regarding the reasons for the weakening demand, Tang Xiaotang, an analyst in the fashion industry at No Agency, believes that this is not unrelated to the decline in young people's spending power. Xiao Xiao, founder and CEO of Wanwatch.com, once pointed out in a public speech that high-end watch collectors between the ages of 18 and 34 account for 42% of the total group.
Tang Xiaotang analyzed Times Finance, "They are an important consumer force in the second-hand watch market. In the context of rapid economic growth, young people have the expectation of wealth growth, and of course they are not soft to buy. However, as economic growth slows, their ability to resist risks is weak, which affects their willingness to spend. ”
In addition, Tang Xiaotang also pointed out that the rise of high-end watches in the second-hand market after the epidemic has been divorced from actual consumer demand, and the influx of many speculators has caused a large number of bubbles in the market. "Now, due to the downturn in the property market, consumer confidence and other issues, the speculation funds are withdrawing. He said.
After the bubble has faded, consumers' consumption concepts are also changing.
Shen Zhengqi bluntly said that watch consumers are returning to rationality, "The watch itself is an industrial product, and its wearing attributes are the essence of the watch, but due to excessive marketing, high-end brands will advertise mechanical watches as works of art, and its ** is far beyond itself." ”
He added to Times Finance that the increase in supply has also had a negative impact on pre-owned watches**. Not only are some watch collectors starting to sell and cash out in the second-hand market due to their own financial reasons, but brands in the primary market are also increasing production.
Rolex once stated to **: "The scarcity of products is not our strategy". In March last year, the company announced that it would create three temporary production sites in Switzerland to increase watch production. In September of the same year, Audemars Piguet built a new factory in Merlin, Switzerland, and the then CEO of Audemars Piguet, Fran Ois-Henry Bennahmias, revealed to ** that the brand was increasing production by a double-digit percentage per year.
The popularity of high-end watches is fading, and consumers are flocking to low- and medium-sized watch products. Recently, the Swiss watch giant Swatch Group has increased its revenue and profit in 2023. According to the data, the group's net sales increased by 12 percent year-on-year last year6% to 78CHF 8.8 billion, net profit increased by 81% to 8900 million Swiss francs. Swatch Group management noted that there is "extra strong demand" for the group's low- and medium-priced watches in the Chinese market.
This article is from: Times Finance Author: Zhou Jiabao.