Big Luxury Watch Brands Attract Big Interest in China

For the second year in a row Omega is the top luxury brand based on Internet searches.

China continues to show strong interest in Swiss luxury watches despite a slowdown in the world’s fastest growing economy, according to a survey of Internet searches released Monday.

The Geneva office of the Digital Luxury Group, a digital consulting and marketing firm for luxury brands, said its analysis of 65 international watch brands shows that every category of luxury watches from “prestige” to “haute horlogerie” has seen an increase in interest the first half of 2012 compared to the same period in 2011, with a near 40 percent increase in aggregate searches.

“This shows that the attention expressed for Swiss watches in China remains strong despite the reported macroeconomic slowdown and the economic uncertainty linked to the political changes,” according to the report released Monday.

“Interest for watches is increasing. This is opposite of what the media is taking about,” added Florent Bondoux, head of Strategy and Intelligence at DLG, in a recent interview prior to the release of the report. He did, however, stress that online interest does not reflect sales.

“We know that this information aggregation in fact does not translate to sell out trends,” he said. “The interest continues to grow, but there are indicators that the purchase cycle (as revealed by the data from the Federation of the Swiss Watch Industry) has slowed.”

In March, DLG, in its WorldWatchReport, revealed that for the first time, China surpassed the U.S. as the country exhibiting the highest demand for luxury watches based on Internet searches. 

The WorldWatchReport measured results in five market segments: “high range,” “prestige,” “couture,” “women’s jewelry,” and “haute horlogerie” The largest growth in Internet search interest is in the “prestige” category, according to the survey. In addition, the best known international brands also received the most interest.

Out of the 65 brands analyzed, the top 10 most-searched luxury watch brands (Omega, Rolex, Longines, Cartier, Rado, Patek Philippe, Vacheron Constantin, IWC, Piaget, Chanel) represent nearly 80 percent of the search market, according to the survey.

The trend toward the big names also includes models. The top models searched this year remained unchanged compared to last year’s survey but now account for more than 50 percent of all online watch searches. They are: Omega “De Ville” (19.6%), Omega “Constellation” (13.30%) Cartier “Ballon Bleu” (6.60%), Chanel “J12” (5.9%), and Longines “Master” (5.10%).

After years of growth in the major coastal cities, such as Shanghai and Beijing, interest has grown in the booming and vast interior of the country. Again, the advantage tends to lean toward the big watch brands as they are the ones who are able to invest locally in these communities, according to the survey.

Style (such as “men’s watch” or “classic style”) followed by price are the most important factors in searching for luxury watches, according to the survey. Bondoux said part of this reason is because the Chinese are becoming more sophisticated in luxury goods. It’s also easier for Chinese consumers to search for style as many of the names for models have no Chinese translation.

“Their overall knowledge is increasing,” he said. “We know that gifting is a very important factor in luxury watches. If you are buying for someone you would not necessarily look for the price but search for generic name.”

The report can be downloaded directly at www.digital-luxury.com/chinawatches.

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Timepiece Tuesday Part 2: Hubot Ad Turns Tragedy into Comedy, Omega Wins Lawsuit, a Clock that Acts Like a Sail

There’s so much going on the world of timepieces that it takes two issues of Timepiece Tuesday to tell it all.

A Black Eye Becomes a Punch Line
Bernie Ecclestone, president and CEO of Formula One, was mugged by four persons and robbed of jewelry worth £200,000 ($315,000) in London, the BBC reports. Among the articles stolen was his Hublot watch. The robbery happened November 25 and on that day he sent his picture of himself taken the day of the assault to Jean-Claude Biver, CEO of Hublot, along with a note: “See what people will do for a Hublot.” Biver told the BBC that Ecclestone wanted to use the picture and statement for an advertisement. Biver agreed and the untouched photo of Ecclestone sporting an enormous black eye and a bruised jaw appeared with an ad for the F1 King Power watch, the official watch of Formula 1 racing. The ad ran as a one-off on December 8 and 9 in the Financial Times and the International Herald Tribune. However, the reality-based ad may actually become a campaign, JustLuxe reports, although the company has yet to make such an announcement.  

Omega vs. Cotsco

 The U.S. Supreme Court has ruled that the Omega brand can effectively control the pricing of its luxury watches in the U.S., which means consumers will pay more, the Daily Finance reports. The decision was 4-4, with Justice Elena Kagan abstaining. Such a split decision upholds the lower court's ruling, which in this case was in favor of the Swatch-owned brand. However, divided 4-4 rulings don't have the same impact as true majority, the publication explains. So the collision of copyright law and "gray market" goods—items originally sold abroad, brought into the U.S. and resold here—is still largely unsettled. Costco was purchasing Omega watches on the gray market from middlemen abroad at prices below U.S. prices. More on the issues For example, Costco was able to sell Omega's Seamaster watch for $1,299, while other U.S. retailers were charging $1,995. Read more.


A Clock that Acts Like a Sail
A wall-mounted clock with a manifold that is connected to the two hands to create a 3D movement. At any given moment the manifold is located in a different position and different parts are seen. As the hour can be understood according to the traditional location of hands, a new reading of time is created. Called the Manifold clock, it was created by Studio Ve, an Israeli design company. A shout out to Fast Company's Co.Design, where I first learned about the product. Video of the clock in action below.


Manifold Clock from Studio Ve on Vimeo.

Timepiece Tuesday: TW Steel Honors Racer, Omega goes to Court, Hublot iPhone App, London Public Clocks

TW Steel Unveils Emerson Fittipaldi Signature Edition

Amsterdam-based sports watch brand TW Steel has created a timepiece honoring two-time Formula One World Champion, Emerson Fittipaldi. The TW Steel Emerson Fittipaldi timepiece was unveiled prior to the Brazilian Grand Prix, held Nov. 7 in Sao Paulo. The watch, available in 45mm and 48mm editions, was designed in conjunction with the racer, who is celebrating the 40th Anniversary of his first Formula One victory. It is based on the brand’s TECH style collection featuring 316L steel and a Chrono movement that measures time to 1/20th of a second. The timepieces are waterproof to 10 ATM. Incorporating the yellow from Brazil’s national flag, the color is used for the racer’s name on the tachymeter ring, on the watch hands and on the side of the black PVD coated case. The symbolic black and white checkered flag on the watch dial and case back further recognizes Emerson’s racing career, which included 14 Formula One victories and 22 IndyCar wins. 

Omega Faces the Supreme Court

The Swiss luxury watch brand Omega has taken its grievance to the U.S. Supreme Court in a case that could have implications for international trade. At issue is whether a copyright holder can block the re-sale of a foreign-made item, after it is later brought to the United States and sold for up to a third less than it might cost elsewhere, CNN reports. The items are Omega watches, and the seller is Costco, a membership warehouse retailer. Omega alleges Costco unlawfully obtained genuine Seamaster-style watches from third parties who had imported them into the United States. The stores then sold them for $1,299, a third below the Swiss firm's suggested retail price of $1,999. The watches were engraved with the Omega emblem trademarked in the United States.

Hublot Releases iPhone App
Hublot has gotten onboard the iPhone craze with its own application for enthusiasts of the luxury Swiss watch brand. One of the features of this app is an augmented reality section that allows users to take a picture of their wrist and then virtually try on watches from Hublot’s 2010 collection. In addition, there are 360 degree views of the new watches along with specs, a way to virtually build a Hublot watch and a game that requires the user to keep the power reserve full by shaking the iphone.

 The Public Clocks of London
 The Londoner Web site has a pictorial display of the many clocks inside the core of the British city with comments by Don Menard, London's heritage planner.

Swatch Group 2010 Sales Sets New Record

The Swatch Group reported Wednesday that sales for 2010 totaled 6.4 billion Swiss Francs ($6.6 billion), an increase at constant exchange rates of 21.8 percent over 2009 and 12.7 percent over 2008, despite capacity bottlenecks and adverse exchange rates. At constant exchange rates, the increase was 28.1 percent.

“The extraordinary strength of our brand portfolio was again reflected in an excellent performance by the Watch segment in practically all markets and price segments,” the company said in a statement. “Outlook remains optimistic in the entire year 2011 for further strong organic sales growth.”

The company’s Watches & Jewelry segment reported a 21 percent year-over-year gain at constant exchange rates, with indications that double-digit growth will continue into at least January. The company has a far reaching group of watch brands, from mass market to luxury: Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Tiffany & Co., Longines, Rado, Union Glashütte, Tissot, ck watch & jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak, Endura and Tourbillon.

The production segment of the company, which supplies movements and components to third-party watchmakers in Switzerland and around the world, reported an increase of 7.5 percent for the year.

The electronics segment, which supply electronic systems used in watchmaking and other industries and in the field of sports event timing, reported an 11.7 percent gain, year-over-year.

The company also it expects an improved operating margin compared to the previous year as well as higher net profit for the year, despite an unfavorable currency conditions.

The decline of the dollar and the Euro caused a three percent drop in revenue, the company said. But despite this issue, Swatch Group said it expects strong growth in 2011.

“The Swatch Group will further generate dynamic and organic sales growth in 2011 and continue investment in its distribution and the expansion of its production capacities. the company said. “Sales in January 2011 are already exhibiting a positive trend with double-digit growth in local currencies. The optimistic expectations are supported by the Group’s strategic positioning in all market segments and its geographic presence throughout the world.”

$1 Billion Increase in 2012 Swatch Group Sales

Swatch Group, the world’s leading supplier of finished watches and watch movements, said Thursday that annual gross sales for 2012 increased by $1 billion, year-over-year. Its 2012 gross sales totaled 8.143 billion Swiss francs ($8.88 billion), a 14 percent increase over 2011 gross sales.

The Swiss company said in a statement that its 2012 watch and jewelry gross sales increased 15.6 percent year-over-year, to nearly 7.3 billion Swiss francs ($7.96 billion), led by sales in China, with double-digit increases for all of its brands.

In the production segment of the company, capacity was expanded, resulting in improved performance. This led to a 10.1 percent increase in gross sales to 2.21 billion Swiss francs ($2.41 billion). Bottlenecks, which had been a problem in past years due to robust demand, were reduced in 2012, the company said.

Its electronics systems segment “is still exposed to a combination of strong price pressure and adverse exchange rates,” the company said. As a result, gross sales decreased by 7.4 percent in 2012 to 311 million Swiss francs ($339,373).

The Swatch Group brand, Omega, is the official timekeeper for the Olympics, which meant that the company had major marketing expenses during the 2012 London Summer Olympics. This along with “unsatisfactory currency developments” will hit projected operating profit and net income. However, the company said it still expects “good results.”

The company also said that the first 10 days of January saw strong sales, indicating “healthy growth” for 2013.

Based in Biel—the vertically integrated company with full manufacturing capabilities, branded retail outlets and alliances with other retailers throughout the world—owns and operates the following brands: Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado, Union Glashütte, Tissot, Calvin Klein Watches + Jewelry, Balmain, Certina, Mido, Hamilton, Swatch, Flik Flak, Endura and Tourbillon.

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