Is China Watch Industry A Serious Competitor To The Swiss?
China is big; I mean really big, so any commercial considerations by nature are also REALLY BIG! This means that over the last few years we’ve seen some rather dramatic ups and downs in the fortunes of modern consumer-oriented China. Once a powerhouse with a thirst for luxury wrist watches, the post-China consumerism bubble has expanded and contracted in some unexpected ways.
The China Overview
In terms of production, China is right up there as the biggest producer by volume, of watches estimated at 80% of total global volume, the southern province of Guangdong being considered its manufacturing hub. While this may be the reality in terms of figures leading some believe Chinese Watch manufacturing is catching up with the Swiss, there’s still some work for the Chinese to do.
But does this mean a Chinese expansion onto the international market will equate to a genuine competitor for the Swiss industry, or does this gap in the culture, history, and craftsmanship simply mean the gap between China and the Swiss watch industry remains firmly at odds?
It’s easy to see why the question of China and her part in the luxury watch market is always in the background, whether it’s the loss of consumer confidence that created a dip in sales, or her recovery and thirst for all things Swiss. Certainly, while the luxury Swiss market looks closely at its own practices as I talk about in my Wrist Review article, the jury is still out and only time will tell which way the industry will turn.
It might be we find ourselves at a crossroads asking whether Chinese watchmakers can emerge as rivals to Swiss brands. A gap persists, but as Chinese brands are expanding into the international market, many experts are asking if buying online from China is a good idea.
Reasons The Swiss Will Always Win
According to a report published by the Shenzhen-based industry information site chinawatchnet.com in August, the economic slowdown of 2013 to 2015 broke into recovery in 2016 with reports of sales totaling 1 billion Yuan up by 3.79%. Factors cited for the increased growth of imported watches is China’s growing middle class fuelling demand and increasing watch exports from Switzerland.
This year has seen exports of Swiss watches to China reached 959 million Swiss francs or $989 million between January and August, beating the total value of Swiss exports to China for the year 2016.
The Chinese Fight Back
It’s no secret China has a thriving watch manufacturing sector that’s been working with foreign brands for decades accumulating valuable experience in watchmaking. This globalization has seen South China’s Guangdong Province establish itself as a manufacturing hub for the global watch supply chain for large numbers of original equipment manufacturers.
So successfully in fact, that China’s watch exports now account for 80% of the total global supply, where Shenzhen City in Guangdong accounts for 42% of that total.
With the aim of becoming strong competitors of Swiss brands Chinese watch manufacturers such as like Memorigin and Dailywin have been encouraged by the local government of Shenzhen by heavy investment in R&D in recent years. For example, of the 3.6 million watches exported every year 600,000 come with watch cases and accessories made especially for Swiss companies according to Liu Ren, vice general manager of Dailywin Watch Group.
With experience and market share more and more Chinese watch manufacturers like Memorigin and Dailywin are answering the call to compete with traditional Swiss brands. Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry FH said of this “such competition is important for business.”
While the Chinese and the Swiss fight it out like a close family, it’s difficult to know whether the Chinese can pull it off. When Lian Hailin, board chairman of Shenzhen-based Memorigin Watch Co Ltd points out, their brand combines the western art of watch-making with Chinese characteristics such as swirling dragons, one has to wonder if this kind of thing will carry weight in the western world.
Double Whammy For The Swiss
The Chinese watch manufacturers have the experience, skills, and the passion to take on the Swiss machine, but unfortunately, this may not be enough to turn the tables on the old school. There’s another issue in play when it comes to breaking the Swiss Made label and it’s found at home.
The rise of the middle class has brought something of an international outlook and a taste for things and possessions with a cultural value. As pointed out by a Beijing based millennial worker calling himself Robin when asked about luxury watches, he notes his favorite Swiss watch brand is Rolex;
“It represents the country’s engineering excellence in wristwatch manufacturing, and I’m always obsessed with the stories and culture behind such high-end products,”
Far from being alone, Robin is just one of many with a strong desire for Swiss-made wristwatches. Shang, for example, ordered a TAG Heuer from a Chinese online retailer jd.com in May setting him back 12,590 Yuan or $1,909 on a pay later scheme, saying;
“I always esteem brands made in Switzerland,” he said. “A high-end watch can represent a man’s social identity.”
The Take Away
Although Chinese watchmakers are becoming more prominent they still lag behind their Swiss counterparts when it comes to techniques and operations such as handcrafted polish according to Lian.
Regardless of how the Chinese improve their products and processes or market their goods, it’s going to be difficult to reshape the passion that many watch enthusiasts feel. Forget everything you just read about the closing gap and the ups and downs of the luxury watch market, forget about globalization because none of this matters, why?
There’s one thing that will never change when someone’s looking for a luxury watch and that’s the idea of selling a lifestyle, a dream, an idea. Swiss Made isn’t selling a Watch, it’s selling a culture and the rich history behind the name.
Watch This Space….
So, if you’re looking for the perfect Watch at the perfect price, from a trusted source, you know it can be a stressful experience, with the right help and advice, you too can find your dream timepiece. As I’m considered an expert in my field and I write for other publications like Wrist Review I know you’ll benefit from my experience and avoid the pitfalls.
If you are considering buying online you may be interested in reading the “How to choose a watch for your wrist size” article here.
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