The new marketing playbook for luxury watches in China

This article is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker and TikTok Trend Tracker, weekly Technology and Sustainability Edits and exclusive event invitations, sign up for Membership here. Before the pandemic, luxury watch brands relied on a tried-and-true approach to gaining new customers and stockists in China: engaging A-list celebrities for brand endorsements, and showcasing at large-scale international exhibitions. It was consistent, conservative and often costly. But then Covid hit, budgets were cut, and trade fairs were cancelled or shifted to digital formats. Erwan Rambourg, global head of consumer and retail equity research at HSBC, says this was a watershed moment for the luxury watch industry, whose “entire ecosystem was outdated”: “Brands needed something to lower costs, increase flexibility, and a more pragmatic approach towards marketing,” he wrote in his book, Future Luxe: What’s Ahead for the Business of Luxury, published in November 2020. Now, brands are using the opportunity to rip up the rulebook: dabbling in localised marketing and co-branding to target the younger consumer in China. By 2025, Gen Z and millennials will account for half of global personal luxury goods sales, according to the 2020 Global Luxury Power report published by Deloitte. Meanwhile, young consumers’ interest in high-end watches is gradually increasing, the Luxury Watch Market Share & Trends Analysis Report published by iResearch shows. For high-end watch brands, this means a focus on social media to create a connection with younger consumer groups. The global watch market slumped during the pandemic, but sales in mainland China have since rebounded and continue to grow. China's personal luxury goods consumption expenditure reached RMB 921 billion (£113.2 billion) in 2020, according to data from iiMedia Research. This is expected to reach RMB 1.2 trillion (£147.6 billion) by 2025. In 2021, the watch market in China was worth RMB 229.3 billion (£28.2 billion) — this is expected to increase to RMB 300 billion (£36.8 billion) by 2023. Underlying this is the rapid rise in Chinese consumers’ luxury purchasing power. Even when the major luxury brands cut their marketing and operating budgets under the pressure of the pandemic, their investment in the Chinese market increased, in many cases to make up for tourism sales lost abroad. Over the past two years, Swiss conglomerate Richemont Group has reached a strategic partnership with Chinese e-commerce giant Tmall, opening stores for IWC, Piaget and other high-end watch brands; while LVMH-owned Hublot is expanding its store network in China. The Chinese market continues to grow for Hublot, driven by younger consumers, says global CEO Ricardo Guadalupe. He adds that the brand’s motto — “Daring to be the pioneer, to be different, and to be unique” — appeals to the younger generation, and is the reason why Hublot offers limited-edition timepieces. The pandemic had an impact, as it did on all businesses, but it also created an opportunity for Hublot to promote its digital projects and cultivate local customers in China, he adds. Global CEO of Italian watch brand Panerai, Jean-Marc Pontroué, believes that Chinese consumers are gravitating towards brands that embrace innovation, and are using watches as an outlet for self-expression. In recent years, Panerai has released a series of high-tech watches, using materials such as Carbotech carbon fibre, which is more durable. Co-branded social media strategies attract younger consumers Traditionally, the watch industry focused on functionality and practicality. But today, high-end watches are no longer synonymous with business and formal settings. Consumers want luxury watches to be more casual, individual and inclusive. The internet and social media have changed the way brands communicate. Many are ramping up their investment in social channels that can reach younger consumers directly. They are also seeking to reach a wider audience, through digital marketing, co-branding and endorsements from local communities. Co-branding is perhaps the most common. Through partnerships with other brands and celebrities to create new products, brands can extend their reach, boost traffic and ultimately increase sales. Additionally, co-branded products are usually available as limited edition pieces, which creates a sense of scarcity, driving conversions. Swiss watch brand Roger Dubuis, founded in 1995, is known for its bold and avant-garde designs, and for its co-branded collections. In 2020, it launched Roger Dubuis x Urban Culture. For each watch in the collection, it partnered with a member of the art collective Urban Art Tribe, including tattoo artist Dr Woo, graffiti artist Gully, sculptor and painter Liu Wei, and, this year, Japanese illustrator and sculpture artist Sora Yamaki. Only 28 pieces of the limited edition Roger Dubuis x Sora Yamaki watch will be sold online, for RMB 471,000 (£57,580). This is not the first time Roger Dubuis has launched an unexpected partnership: in July 2021, it partnered with Formula 1 tyre supplier Pirelli to create a watch collection. In March of this year, luxury watch brand Omega teamed up with high street player Swatch to launch the MoonSwatch collection, inspired by the Omega Speedmaster Moonwatch series (both brands are owned by The Swatch Group). The 11 watches in the collection are named after the stars of the solar system and their surrounding dwarf planets. The round battery cover is painted with corresponding images, and the outer ring of the case back is engraved with “Dream Big”, “Explore the Universe” and other inspirational phrases. While not a limited edition collection, it still caused a stir — with customers lining up overnight outside stores for the release, and police called to the flagship in Shibuya, Tokyo, to maintain order. Originally selling for £230, on the day of its release in Macau, the resale price exceeded RMB 20,000 (£2,600). In June 2021, Swiss high-end watch brand IWC began posting a series of articles with eye-catching headlines on its official Wechat account. “Why would IWC open a video account”, “What if IWC makes TikToks”, “What if IWC makes content on Xiaohongshu”, “What if IWC makes content on Bilibili”. The articles aroused heated debate and attention among young netizens — showing how a move away from the stable and conservative marketing style of luxury watches, towards a more localised, digital and youthful approach, can attract a new generation to heritage brands. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author/on this topic: Decoding China’s Gen Z sustainable fashion consumer Why China’s 618 shopping festival is losing its shine Balenciaga NFTs and Louis Vuitton’s Wechat moments: How luxury brands made the most of 520 in China

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