Luxury watchmakers realize it is time for change

These are strange days and unusual times. It is fair to say that it is not usual for Chinese consumers to see products valued over a million yuan ($141,100) sold through a livestream broadcast. But then, up until a few months ago, social distancing was a strange concept.

As one of the world's most established trade fairs for high-end luxury watches, the Salon International de la Haute Horlogerie, or SIHH, in Geneva, Switzerland, was considered an "exclusive" occasion, only accessible to top-tier retailers, professionals and celebrities.

Its organizer, the Fondation de la Haute Horlogerie in Switzerland, claimed what it described as "the biggest change in its history" by inviting the wider public to venues throughout Geneva for the 30th edition of the salon. It was supposed to have been held from Saturday to Wednesday under a new name "Watches & Wonders".

Due to the COVID-19 pandemic, the inaugural "Watches & Wonders Geneva" was canceled, at least in its physical form, but soon it reached an even wider audience through an online plan B.

FHH cooperated with Tmall, one of China's major online shopping platforms, to launch "exhibitions on cloud" throughout the originally scheduled timeframe of "Watches&Wonders Geneva".

Livestreaming broadcasts and other interactive online shopping channels were used to showcase the wristwatches, involving about 100 new and classic versions from nine major international brands, including Cartier, IWC, Panerai, and Vacheron Constantin.

Net-a-Porter, the British retail website for luxury brands, opened its official store on Tmall last year. It became the stage of this "exhibition", which was also attended by professionals to impart relevant horological knowledge and explain design ideas.

Official statistics of SIHH showed the four-day fair in Geneva last year attracted about 23,000 guests and journalists. By comparison, Saturday's four-hour "exhibition" through a livestreaming broadcast on Tmall attracted over 160,000 viewers.

A 2019 report by Chinese consulting company iResearch showed that 56 percent of high-end wristwatch consumers in China are aged between 26 and 35. Nevertheless, even younger buyers will be intrigued.

"For luxury brands, the market of Gen Z(referring to those born after the mid-1990s) matters hugely," Mike Hu, the managing director of Tmall in charge of fashion and luxury products, said in a press release.

Analysis of data through e-commerce can be a key to future development, he says in the release to the media.

Forty percent of today's Chinese consumers of luxury wristwatches will first refer to online shopping platforms to get information, according to the report of iResearch.

Change is probably not optional for international luxury watchmakers.

For example, in January, Cartier became the first international high-end luxury brand to open its own flagship store on Tmall.

"E-commerce platforms have a broad reach," Cyrille Vigneron, CEO of Cartier International, tells China Daily. "It is the same for the physical network of retail stores, which is equally attractive to all generations.

"The potential of e-commerce in China is tremendous," the veteran industry observer says. "This has been clearly reflected with the rapid growth of sales channels. In the digital realm, one should also consider that messaging platforms such as WeChat are now an inseparable part of everyday life."

The online boutique on the official WeChat public account of Cartier began operating in 2016. A similar approach on WeChat has also been taken by other brands, like IWC and Vacheron Constantin, in recent years, but perhaps a more immersive experience can be achieved by the whole industry.

Wang Mengjin, a senior counselor for the China Horologe Association, tells China Daily: "Multimedia channels supported by established Chinese e-commerce outlets can offer abundant formats to tell stories rather than just exquisite pictures on home pages or in magazines, which high-end brands heavily relied on.

"Watchmaking brands used to spend a lot of energy decorating their boutiques to make them as magnificent as possible," he says. "However, from now on, more budgets will be transferred to production of touching online video clips."

"Collections are staged in the same way as in the physical shop windows and offer visitors a unique experience, as if they were actually visiting Watches & Wonders," Vigneron says.

A new type of "exclusion"－accessible for internet users only, rather than "professionals" in the old definition－may create more opportunities for the whole industry getting cyber-savvy.

For example, about 40 new timepieces or novelties from different brands shown during the 5-day "exhibition" had never been put on a shelf anywhere else.

And, following the opening of the flagship store on Tmall in January, two collections of Cartier were exclusively pre-launched on the platform. Vigneron said the performance of the online store has largely exceeded expectations. It has attracted 418,000 followers.

However, the biggest unexpected situation is probably still COVID-19.

In March, this year's Baselworld, another world-class trade fair for watches in Switzerland, was also canceled, on the premise that some key brands had already announced they would quit before COVID-19 was classified as a pandemic.

According to statistics by Federation of the Swiss Watch Industry, due to the impact of COVID-19, the gross export of Swiss watches dropped by 21.9 percent in March, compared with the same period in 2019. However, its exports to the Chinese mainland still rose 10.5 percent.

"Dramatic change in the industry is irreversible, and the pandemic only makes it come earlier," Wang from the horologe association points out. "It is difficult for the traditional form of trade fairs－people in pavilions－to maintain their influence (even after COVID-19).

"Offline fairs may still function as 'experience centers', but e-commerce will be the main stage to play on," he says.

On Saturday, Cartier also launched a new digital platform, "Cartier Watchmaking Encounters", to release novelties in the absence of a major watchmaking fair this year.