Chinese Millennials Are Diving Growth Across the Luxury Watch Market
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Chinese millennials have been defined as a key consumer group in the world’s second-largest economy.
In 2017, Chinese millennials are likely to develop spending habits, while not compromising on image or quality. Young Chinese consumers demonstrate themselves to be confident, select spenders willing to spend top-dollar for entertaining and personalized retail experiences.
According to data from the Federation of the Swiss Watch Industry, the early part of 2018 saw the luxury watch market’s largest growth in almost five years, with Hong Kong and Mainland China leading the comeback. From January to June of 2018, Hong Kong and Mainland China contributed over USD$ 237.6 million in exported sales, with the U.S. purchasing USD$ 108.6 million worth of luxury watch exports. China now seems set to lead the reborn of this entire industry due to e-commerce strategies luxury watch brands have designed specifically for a young generation of affluent consumers.
The Chinese Market is changing
The boost comes after a serious drop in the Swiss watch market that followed the Chinese government’s anti-corruption measures towards government officials and diplomats for engaging in lavish gift-giving or spending, near devastating many of China’s luxury industries that had previously relied heavily on these sales. The massive anti-corruption campaign resulted in the global export value drop for the Swiss watch market.
“Thanks to the recovery in the Chinese economy and consumers trading up, demand for high-quality watches increased,” said market researchers Euromonitor International in a company statement to Jing Daily, “and exports of Swiss watches to Mainland China witnessed a rebound over the recent 2018 review period.
Branding strategy in China: a Must for a luxury Watch Brand
Naming is of high importance for a brand entering the Chinese market. Whether it is the branding strategy or the products’ name, it does make a difference in the brand’s image for the local audience.
Famous watch brand Hublot was known in China as Heng Bao, but a few years ago, chose ‘宇舶’ (Yu Bo) as their official transcribed name. However, many people still use the previous name to search for the brand. Probably, because of the translation that made more sense and was somehow more elegant, or just because the previous name was already deeply imprinted into the consumers’ mind.
Monsters are coming
On the contrary, when naming is well-done, it can have a real impact on sales. Omega’s bestselling luxury watch in China is named the De Ville model. Its Chinese translation is 蝶飞 (Die Fei) which means flying butterfly, an elegant and easy-to-remember name. This might just explain its enormous success in China, as shown in the graph below:
The most loved De Ville, Rolex’s Oyster Perpetual Submariner green-dial version was named a “green water monster” (绿水鬼， Lu Shui Gui) on the Chinese luxury watch market, while the black dial version was called “black water monster” (黑水鬼 Hei Shui Gui).
The Power of the Chinese Influencer
Last month luxury watchmaker Audemars Piguet announced that Lu Han, a famous Chinese singer, would become the brand’s first-ever Chinese ambassador. The star has an incredible 50 million followers on Weibo – a number boosted by his massive fan base of loyal millennial consumers. It seems to be the very right strategy on how to make the most of the growing Chinese market.
The singer posted an image of himself on Instagram at the 25th Anniversary celebration of Audemars Piguet’s Royal Oak collection with the caption: “It is my great honor to be the ambassador of Audemars Piguet, such a wonderful night!” The post has gained nearly a million likes so far. Audemars Piguet took to its official Weibo page to share more photos of the star, much to the delight of Lu Han’s fans.
- “Chinese clients have become the largest group of customers for luxury goods worldwide, including Swiss watches,” said Audemars Piguet’s Greater China CEO David von Gunten to Jing Daily. “Chinese luxury shoppers are younger and affluent, they express themselves differently. They are avid fans of social media and use the platform to research, share and express their opinions about everything.”
In April, Audemars Piguet became one of the first Swiss watchmaking brands to launch a pop-up store on Wechat. For two months, the brand used the platform to launch four new products, offering clients access to premium services such as JD.com’s white glove luxury delivery service.
- “There are lessons to be learned from other luxury sectors in the innovative and engaging use of key platforms such as WeChat, as well as the creation of niche high-end apps, and use of buyer communities,” said Domenica di Lieto, CEO of the Chinese marketing consultancy Emerging Communications.
- “Often it is the level of engagement and authenticity behind messages from KOLs (key opinion leaders) and influencers that provide more value than using them based on a number-crunching media buying type exercise. The Roger Dubuis tie in with Pirelli with the Race Against Time Wechat campaign was a good example of how to get creative right.”
- The Roger Dubuis Wechat campaign encouraged the brand’s would-be consumers to take part in a game whereby they performed the role of a journalist by attempting to discover more about the timepiece at a racing competition. During the run of the campaign (May 29 through June 10) the promotion generated 5 million impressions on WeChat and steered hundreds of followers to the Roger Dubuis official account.
In January 2018 the leading player Swatch Group China, including Omega, Breguet, Harry Winston, and Blancpain, partnered with Alibaba’s e-commerce platform Tmall.com to stage “Swatch Tmall Brand Day”, a unique online and offline shopping event.
Swatch invited TFBoys member Wang Junkai to the event, where he wore a specially designed, Swatch-branded watch. On July 9, the brand’s official Weibo shared a photo of Wang Junkai wearing one of its Skinpole watches along with a link to buy the USD$ 200 watch. The link has so far amassed over 12,000 clicks. On August 13, an advertising video starring Wang Junkai was shared on Swatch’s Weibo page and has gained over 7800 likes in 24 hours.
A Far-reaching Strategy
It’s not just the marketing strategy that needs to be creative to continue to benefit from strong China sales. Chinese consumers are increasingly discerning in their taste. They are expecting qualitative product styles and unique experiences that address their needs.
Design innovation and exclusivity is key to reach Millennials consumer group. They want something others do not have, so there is great scope for limited editions, particularly based on historic design, and smaller producers of authentic high-quality watches. They do not have large global distribution, and Chinese millennials would prefer to buy the item to be difficult for others to source.
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Read also :
- Luxury Watch Market in China SCMP
- Top Luxury watch brand in China
- Market Luxury Brands into the Chinese Market
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