Mao Zedong wore one; Deng Xiaoping too. Shanghai Watch, China’s homegrown watchmaker, was for decades a status symbol among China’s revolutionary elites. Now, the largely forgotten brand is planning a comeback.
With a new marketing plan, a new logo and a much bigger price tag, the watch manufacturer hopes to join the ranks of wristwatch royalty, that has long been dominated by European brands. One of the watches it showcased at a Hong Kong watch emporium in February was a $100,000 timepiece coated in 45-carat diamonds.
The brand’s attempt to go upmarket is a departure from earlier strategies. In the 1970s, for example, the company’s mission was to produce mechanical watches to keep the proletariat punctual.
Nevertheless, two years ago Shanghai Watch’s owners began repositioning the brand to tap into the growing demand for luxury timepieces from newly wealthy consumers. It launched two high-end watches designed by famous Swiss watchmaker Eric Giroud. Today, even the more modest models, like a rose gold watch with alligator leather straps, retail for about $17,800.
Shanghai Watch’s strategy symbolises how far the country has come. “In the past people wore watches to read the time, now they wear them as a form of status symbol,” general manager Ni Haiming of Shanghai Watch told the Shanghai Daily (for more on Chinese consumer trends, see WiC’s Focus issue published last week: From Made in China to Made for China).
Watches also offer an alluring entry point for those Chinese aspiring to a luxury lifestyle. According to Sandy Chen, director of market research firm TNS China: “A watch is a must. They start with a luxury watch, next comes the luxury car, and last is the luxury apartment. Men compare and discuss watches, and they need a watch of a certain quality to be part of the social circle.”
Even though Shanghai Watch doesn’t disclose sales figures – so it’s unclear how successful its new tack has been – it is already thinking about exports: “We hope to sell our watches around the world,” Leonora Yung, president of the firm, told the Wall Street Journal last month.
But industry observers say persuading Chinese consumers to start buying mainland luxury brands will be a marketing challenge. Carson Chan, managing director and watch specialist at auctioneer Bonhams in Hong Kong believes that there is a “psychological barrier” that consumers of high-end watches will have to cross. That’s because they have long associated luxury watches with European brands.
It’s a lucrative market. Michel Chevalier’s book Luxury China reckons it was worth $1.3 billion in 2008 with 75% of those luxury watches given as business gifts.
China’s taste for luxury timepieces has also inspired another local firm. Its strategy, mind you, may have Geneva’s watchmakers wincing. Swiss Wongem has been heavily promoting its luxury collection, Supreme – fully-set diamond timepieces that retail for Rmb99,999 ($14,600). Ads for the watch have appeared in Beijing newspapers.
Even though its Chinese name means ‘Swiss Aristocrat’, scrutiny of the fineprint reveals the mainland watchmaker’s only connection to Switzerland is that the watches are powered by Swiss movements. Everything else is made in China. Clever marketing or just an old-fashioned scam?
Well, in a country that is regularly minting new millionaires, it’s probably not very difficult to find a few gullible ones who are willing to hand out serious money.
But to cater to China’s more serious watch connoisseurs, European watchmakers are now creating new models designed specially for them.
For instance, Piaget, one of the most popular luxury watch brands on the mainland, has latched on to the fact that certain numbers are auspicious in Chinese culture. So on the watch face of their products the numbers 2 and 8 – considered lucky numbers in China – are encrusted with diamonds.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.