Luxury Watches at 40% Off
Overcapacity at the luxury watch brands has created a flood of inventory that is now being hawked online.
By STACY PERMAN
April 21, 2017 11:30 p.m. ET
The gray market for luxury watches—that colorful internet-driven bazaar of unauthorized sellers often offering 40%-plus discounts on fine timepieces—is upending the global watch industry. It’s also just the latest manifestation of troubles whirring under the hood of the business, already hit hard by economic and political gyrations and China’s crackdown on corruption.
According to the Federation of the Swiss Watch Industry, last year exports fell nearly 10% to $19.4 billion, its steepest decline since the global financial markets collapsed in 2009. Sales fell 25% in Hong Kong and 9.1% in the U.S.
But the industry’s problems are a boon for the gray market, as overcapacity at the luxury watch brands has created a flood of inventory that is being hawked online. Websites like Jomashop.com advertise Omega Speedmasters at 42% off the list price; IWC Portuguese Chronographs are listed at 29% below retail at WatchWarehouse.com; and limited-edition Hublot Big Bangs are hawked at 35% off by PrestigeTime.com...
Internet forums and blogs have demystified the business and new digital entrants are changing the industry. Chrono24 is an online marketplace for new and preowned watches, based in Karlsruhe, Germany, that publishes all the available information about a watch, including its price. Co-founder Tim Stracke says that about 50% of the site’s listed pieces are new or “as new” (mint condition, unworn). Nearly 300,000 watches from Audemars Piguet to Zenith are offered from some 90 countries, by over 2,000 of the website’s dealers who are screened and preapproved. Last year, $750 million worth of watches were sold through Chrono24. Stracke claims sales are heading toward $1 billion...
“The biggest impact we’ve had on the industry is that we’ve created a global price transparency that’s become a de facto standard among dealers,” says Stracke. That means a watch buyer in Silicon Valley can now confidently walk into a local jeweler and compare the watch’s local retail price to its global “spot” price listed on the German website—and see if he is getting a fair deal...
Overcapacity at the luxury watch brands has created a flood of inventory that is now being hawked online.
By STACY PERMAN
April 21, 2017 11:30 p.m. ET
The gray market for luxury watches—that colorful internet-driven bazaar of unauthorized sellers often offering 40%-plus discounts on fine timepieces—is upending the global watch industry. It’s also just the latest manifestation of troubles whirring under the hood of the business, already hit hard by economic and political gyrations and China’s crackdown on corruption.
According to the Federation of the Swiss Watch Industry, last year exports fell nearly 10% to $19.4 billion, its steepest decline since the global financial markets collapsed in 2009. Sales fell 25% in Hong Kong and 9.1% in the U.S.
But the industry’s problems are a boon for the gray market, as overcapacity at the luxury watch brands has created a flood of inventory that is being hawked online. Websites like Jomashop.com advertise Omega Speedmasters at 42% off the list price; IWC Portuguese Chronographs are listed at 29% below retail at WatchWarehouse.com; and limited-edition Hublot Big Bangs are hawked at 35% off by PrestigeTime.com...
Internet forums and blogs have demystified the business and new digital entrants are changing the industry. Chrono24 is an online marketplace for new and preowned watches, based in Karlsruhe, Germany, that publishes all the available information about a watch, including its price. Co-founder Tim Stracke says that about 50% of the site’s listed pieces are new or “as new” (mint condition, unworn). Nearly 300,000 watches from Audemars Piguet to Zenith are offered from some 90 countries, by over 2,000 of the website’s dealers who are screened and preapproved. Last year, $750 million worth of watches were sold through Chrono24. Stracke claims sales are heading toward $1 billion...
“The biggest impact we’ve had on the industry is that we’ve created a global price transparency that’s become a de facto standard among dealers,” says Stracke. That means a watch buyer in Silicon Valley can now confidently walk into a local jeweler and compare the watch’s local retail price to its global “spot” price listed on the German website—and see if he is getting a fair deal...
