The global market remains polarized between manufacturers, historic or new, in the world of luxury and declining entry and mid-range brands. At the crossroads, trends at the heart of the watch industry: connected, second-hand watches and e-commerce.
The watch industry in 13 points
$ 224 million. This is the annual cost of counterfeiting for the watch industry. The number of counterfeit watches in circulation is very high: European customs have mentioned a figure of 40 million pieces a year, most of them low-end. It is said that genuine counterfeits, which are difficult to detect with the naked eye and are often sold for more than 1,000 euros each, exceed one and a half million copies.
Check-in time. After his workshop-museum, Audemars Piguet just opened the next Hôtel des Horlogers in Le Brassus. The same spirit of integration in the nature of the Vallée de Joux, the same architectural firm of the Danish firm BIG (Bjarke Ingels Group). Fifty rooms, two restaurants and a bar, a wellness area and conference rooms … Le Brassus Manufacturing continues to innovate.
Authentication. Origyn is a Swiss non-profit foundation with a very specific goal: create digital clones of luxury watches, to enable authentication. From hundreds of landmarks and using your phone’s simple camera, it is possible to clearly identify the object and, by extension, detect a counterfeit. Located in the blockchain, the Origyn system wants to enrich itself with the information provided by its users. On November 15, the foundation launched the reservation of its first tokens, the precious authentication certificates.
NFT. Fearing that the next revolution will be lost, as it initially rejected e-commerce, the luxury industry has already invested heavily in the world of non-consumable tokens (NFT). Of course, this should be of interest to watchmakers. A tangible sign, the Time to Watches program, the new event in Geneva, dedicated one of its days last month to “Watchmaking in the NFT Era.” Some brands simply produce clones of their physical models, while others launch creations that only exist in the digital world. Obviously, this new vein opens the door to treacherous initiatives: an American has marketed virtual models called Rodex, with a pretty obvious inspiration, some of which have been sold, in cryptocurrency, up to the equivalent of 17,000 euros!
774 million. the Swatch Grup, owner of some twenty brands -among them Omega, Tissot, Longines …- erased a year 2020 marked by its first losses in forty years: 774 M CHF in profits in 2021, which even exceeded the very good results of 2019, before Covid.
+ 31%. It is the rise, last year, of exports of Swiss watches, the barometer of the sector, according to the Federal Customs Office, after a decline of 21.8% in 2020. Result: it is a record year, with 22.3 billion francs francs! Better than in 2014, the most prosperous last year of the iconic Swiss industry. The crisis was quickly forgotten.
20/80. The watch industry likes precision: the law of 20/80, or the Pareto principle, applies almost perfectly to it. A small minority of players realize most of the value of the industry. The crisis has even helped to strengthen this concentration by polarizing the world’s fortunes to the top of the range. It is estimated that the four brands Rolex, Patek Philippe, Audemars Piguet and Richard Mille alone account for 40% of the Swiss watch industry’s 2021 turnover.
Patek Philippe unbeatable. Geneva’s manufacturing continues to spin collectors’ heads. Especially his model Nautilus 5711, of which he decided to stop production: his rating quadrupled almost immediately after the announcement! Only Patek Philippe accounts for 41% of the value of all auctions in 2021, well ahead of Rolex (16%). A limited edition of Tiffany Blue, produced in collaboration with Tiffany & Co., shot up to € 5.74 million last December in New York, to support The Nature Conservancy, more than 100 times its new price!
Christie’s, the queen of auctions. 2021 was the year of all-time clock auction records, which have become safe havens. Christie’s has pulverized its turnover by 134% compared to 2020, with $ 204 million made. The house, now controlled by François Pinault’s holding company Artémis, has benefited greatly from the boom in online sales, which has significantly expanded its customer base. It is slightly ahead of Britain’s Phillips ($ 203 million) and Sotheby’s ($ 153 million). Keep in mind that Swiss specialist Antiquorum ranks fourth behind these three majors, with $ 65 million in sales last year.
Vintage. Old-fashioned fashion continues to grow, and this goes far beyond the growing number of tribute collections or birthday editions. A thriving second-hand market that the manufacturers themselves are no longer unaware of: more and more of their stores are offering a dedicated vintage corner.
Connected clocks. The smartwatch battle is heating up. Announced years ago, Google’s Pixel Watch has finally been introduced, with the new Wear OS 3 operating system, which the Mountain View company equips, in particular, Samsung’s Galaxy Watch. In this high-tech, somewhat growing watch segment, the other Californian giant, Apple, largely dominates sales with a market share of 30% according to Counterpoint Research, and 50% of revenue with your premium positioning! In second place is Samsung, far behind (10%). No traditional manufacturer is in the top 10 in global sales.
In white. A few staunch ones resist the rise of e-commerce or its soft, “phygital” version. And they are doing very well! Like Audemars Piguet, who limited experience to rare partnerships in specific markets, Richard Mille opted exclusively for physical exchange with customers in his stores. An online strategy with its positioning and dazzling success. The brand, born just over twenty years ago, is also renewing its entire network.
Couple. Aurel Bacs and Livia Russo share an immense passion for watchmaking, as well as their office and home! Passing by Sotheby’s and Christie’s, the couple masterfully leads the Phillips auctions. The two experts have worked together for twenty-four years.