Can Chinese watchmakers compete with the world's best?
It's no secret that China is fast becoming the most important market on the planet for makers of luxury goods.
Wealthy Chinese customers are almost single-handedly sustaining demand for high-end watches from traditional European brands, and now, a home-grown contingent of luxury timepieces has also stepped up and are hoping to cash in on their compatriots' indefatigable hunger for high-end watches.
A weakness for watches
Watches have always held a special place in Chinese consumer culture, especially for men.
After Western-style clocks were introduced to China by Jesuit missionary Matteo Ricci in the 16th century, they were the preserve of emperors and nobility for hundreds of years.
The establishment of the People's Republic of China in 1949 spelled a sudden end for European watch brands in the country, and local watchmakers were the beneficiaries of their absence.
Throughout the first 30 years of the PRC, the Shanghai Watch Co. rose to prominence as the choice of leaders such as Mao Zedong and Zhou Enlai and a good watch was considered one of the four essential “big things” in Shanghainese life – the others were a bicycle, sewing machine and transistor radio – commonly given as wedding presents.
The end of the cultural revolution not only signalled the beginning of China's rise to economic superpower status, it also saw the reintroduction of luxury goods from European brands, a move which led local watchmakers to fall out of favor with consumers.
The modern landscape
This trend has remained the status quo for over three decades, but in recent years, a change seems to be afoot, as Chinese-made luxury watch brands have reinvented themselves in order to compete with traditional powerhouses, such as Switzerland and France.
“It's a natural reaction to the realities of the market,” Jing Daily Editor Avery Booker explains.
Chinese consumers are buying an ever-increasing number of high-end watches, both for investment and in an attempt to connote status, and Chinese manufacturers are tired of seeing Western brands dominate the premium watch market.-- Avery Booker, Jing Daily Editor
“Chinese consumers are buying an ever-increasing number of high-end watches, both for investment and in an attempt to connote status, and Chinese manufacturers are tired of seeing Western brands dominate the premium watch market.”
Last year saw multiple headlines emerge about the renaissance of the formerly proletarian Shanghai Watch Co. and Seagull brands and the birth of new competitors, including The Chinese Timekeeper and Iguzzini, a watchmaker originally born in Shanghai in 1903.
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These brands appeal to Chinese nationalist sentiment by being crafted in China and incorporating subtle Chinese design elements, but opinion has been mixed as to whether this will be enough to compete.
“In coming years Chinese watchmakers will probably be thrilled to just capture some market share from their European competitors in the mainland China market – since it's got so much potential and is growing so fast,” Booker adds.
“Appealing to the lucrative home market will be easier than fighting to be accepted outside of China.”
A 'Made-in-China' makeover
Franco-Mexican brothers Stephane and Lander Michel first heard the story of Federico Iguzzini in 2005 and the tale of the Italian's dream to make quality watches in Shanghai so inspired them, they acquired the rights to the name and made it their mission to revive the moribund brand, which was relaunched two years ago.
“At the beginning people said, 'Luxury goods, based out of China?' They basically thought I was crazy. But we've basically put the 'We're from China' banner on our chests and gone to war with it,” Stephane Michel says.
Despite a marketing strategy that depends entirely on word of mouth for promotion, Iguzzini has found success with their very limited-edition designs (the company only makes 150 to 200 watches per year).
Stephane is confident that given the time and desire, Chinese-made watches will eventually make their presence felt in the high-end watch market both here and abroad.
“Chinese brands have to find an edge,” he explains.
“If you walk into a watch shop, everything looks the same, it's a very conservative industry and there is rarely innovation. So if Chinese brands let their dynamism run free, that can give them the edge. Quality is also very important, it doesn't matter how beautiful a watch is, it needs to keep ticking.”
Long way to the top
At the beginning people said, 'Luxury goods, based out of China?' They basically thought I was crazy. But we've basically put the 'We're from China' banner on our chests and gone to war with it.-- Stephane Michel, co-owner of Federico Iguzzini watches
A report published last year in QQ Luxury listed the top ten most popular watch brands in China, and there was nary a domestic brand in sight, with Patek Philippe, Rolex and Omega maintaining a lock on the top three slots.
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According to Booker, there may be competition from Chinese brands on the horizon, but a challenge to the dominance of European brands will be a long time coming, if indeed it comes at all.
“I think Chinese brands will almost certainly continue to move up the value chain, and be of comparable quality to many other high-end brands on the market, but I wouldn't expect to see them posing a serious threat to brands like Patek Philippe for quite a while,” Booker says.
“China's ultra wealthy won't be giving up their Rolexes or Cartiers any time soon,” Booker adds.
Federico Iguzzini doesn't have a shop in Shanghai. Interested buyers can purchase their watches through their official website.