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The State of the Global Watch Industry II: Four Emerging Trends

By Tom Mulraney
The State of the Global Watch Industry II: Four Emerging Trends
The State of the Global Watch Industry II: Four Emerging Trends

It’s been about a month since we published the first “State of the Global Watch Industry.” The goal of that article was to provide answers to the five most common questions asked by the Chrono24 community during the COVID-19 crisis. A lot has changed since the first update, and the situation is evolving on both a local and global scale. We’ve continued to compile and analyze data from user interactions on our website in the intervening period.

As a marketplace with more than 475,000 watch listings and 9 million visitors every month, we are in the unique position of being able to closely monitor market changes. With that in mind, here is our second “State of the Global Watch Industry” update, which highlights and discusses the latest trends we’ve identified.

Trend 1: Global recovery in sales

Global Sales on Chrono24 (weekly)
Global Sales on Chrono24 (weekly)

As reported in our first “State of the Global Watch Industry,” activity on the Chrono24 marketplace was down about 18% by mid-March, following confirmation that the coronavirus had spread outside of China. As a result, global weekly sales on our platform decreased by as much as 20-30% during this period, compared to pre-COVID-19.

Global Sessions on Chrono24 (daily)
Global Sessions on Chrono24 (daily)

In a matter of weeks, however, the number of daily sessions – defined as a visit to one of Chrono24’s local sites or a user opening the Chrono24 app – have ramped back up and are now only 5% below pre-crisis levels. This metric continues to follow an upward trajectory. More importantly for our sellers, checkouts – defined as the start of a transaction on our platform – are 14% above pre-COVID-19 levels. Likewise, weekly sales have made a strong recovery and are now 13% higher than they were before the crisis. There continues to be a lag, however, between checkouts and completed sales due to increased negotiating and limited stock (we will discuss this in the next point).

Global Checkouts on Chrono24 (daily)
Global Checkouts on Chrono24 (daily)

As expected, the rate of recovery varies by country and depends on the initial decrease seen. For example, the UK saw some of the sharpest declines in sessions and checkouts (-21% and -46%, respectively) but has since experienced the most significant recovery (+30% and +145%, respectively). It’s important to note that some countries, such as Italy, one of the earliest and hardest hit, are now seeing checkouts well above pre-virus levels (+24%).

Trend 2: Negotiation requests up, but success rate down

Median discount percentage requested vs. Price negotiation success rate
Median discount percentage requested vs. Price negotiation success rate
Median discount percentage requested vs. Price negotiation success rate
Median discount percentage requested vs. Price negotiation success rate

Negotiations on our platform are on the rise as users look to take advantage of perceived challenging market conditions for sellers. Potential buyers are requesting price discounts that are, on average, 16% higher than pre-coronavirus levels. This does not necessarily reflect actual market performance, however, since price negotiation success rates are well below pre-COVID-19 levels as dealers look to defend their prices. This is likely attributable to a number of factors, including:

  • increasing buyer demand,
  • stock issues due to limited supply on the wholesale market (i.e., dealers are less inclined to sell current stock at a discount if they are not confident they can replace it), and
  • luxury watches being increasingly viewed as safe haven assets (discussed more in the next point).

As a result, prices have remained more or less stable, with the exception of some super iconic watches like the ceramic Daytona and 5711 Nautilus, which have experienced some minor changes. We’ve already discussed pricing in more detail in a previous article, which you can read here.

Patek Philippe Nautilus Performance

Royal Oak & Speedmaster

Trend 3: Luxury watches as safe haven investments

Another interesting trend is the increase in users who have expressed an interest in finance, investments, and tangible assets. Since the start of the coronavirus crisis, there has been a 40% increase in the number of sessions by such users. Given these uncertain times and the resulting volatility of the stock market, this may indicate increased interest in luxury watches as safe haven assets, i.e., an asset that is expected to maintain or increase its value during times of uncertainty or market turbulence.

There is not sufficient data, however, to draw any strong conclusions here. It’s possible that these users simply have more time to browse and transact on Chrono24 due to less hectic work schedules, or perhaps they’re looking for a new hobby to relieve isolation-induced boredom. In any event, this audience is contributing to the overall increase in user activity on the Chrono24 marketplace.

Trend 4: Experienced buyers are more active

Seasoned Chrono24 users seem to think now is a great time to buy a luxury watch on our marketplace. If you look at the median length of time a user has been registered on Chrono24 at the time of purchase, it is clear that the share of purchases made by experienced watch buyers has significantly grown compared to pre-COVID-19. Again, this could be attributed to a number of factors, including:

– Experienced, and presumably knowledgeable, buyers believing that now is a good time to negotiate a better deal on one or several of the watches on their wish list

– More free time to spend browsing listings on Chrono24 and interacting with other experienced buyers on social media, thus generating increased interest and desire to make a purchase

Again, there is not enough data to draw any firm conclusions about what is driving this behavior, but it is nevertheless a trend worth noting for sellers.

Thanks for reading our second update on the state of the global watch industry. You can read the full report here. We will continue to monitor the situation and update this article over the coming weeks as and when any relevant information or new trends come to light.

Read more

Will the coronavirus crisis burst the Rolex bubble?

Market Performance: Is now the time to buy or sell?

The State of the Global Watch Industry: 5 Questions and Answers


About the Author

Tom Mulraney

Growing up in Australia in the 1980s and 90s, there wasn’t much of a watch scene. There was only one authorized retailer of high-end watches in the city I lived in …

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