This column, since it began in April this year, has always been from the point-of-view of a watch enthusiast, namely, me. But I’m not so different from other fans of mechanical wristwatches that you’ll find all across the internet. I spend a large part of my down-time looking at watches, reading about watches and watching watch videos. My Instagram account, at this point, exists primarily for watch content, and the global #watchfam doesn’t disappoint on that count. I follow watch photographers, watch publications, collectors of vintage watches, sellers of pre-owned or vintage luxury watches, as well as average watch fans with a few Seikos and an iPhone to take daily wristshots with. In fact, it’s the only kind of social media content that I like anymore these days.
The heightened digital presence of watch brands has made me, and hundreds of thousands of other watch enthusiasts like me, ringside observers of the many ways that the industry has changed since the start of the covid-19 pandemic. The two key changes that have underscored over a year of intense turmoil have been the changed circumstances of the Swiss luxury watch industry and the seemingly indestructible growth of the resale watch market, namely, auctions.
Last year, the pandemic threatened to send Swiss watchmaking into a tailspin not seen since the 1970s. Five decades ago, a combination of the rise of quartz watches and a slowdown of the global economy had resulted in the death of hundreds of Swiss brands, some of them centuries old. The industry recovered in the 80s and 90s partly through the consolidation of large watch conglomerates like LVMH (TAG Heuer, Zenith etc.), Richemont (Cartier, Jaeger LeCoultre etc.) and the Swatch Group (Omega, Swatch etc.), and by edging mechanical watchmaking towards the realm of luxury.
In the past decade, the 2008 recession and the rise of smartwatches had dulled the sheen somewhat, but things were actually looking up for the Swiss before the pandemic struck. In January 2020, Swiss watch exports totalled CHF (Swiss Francs)1,790 million, a 10% rise over January 2019. By April 2020, with Europe in lockdown and manufactures shut, watch exports were down by 81%, as compared to April 2019. May was equally bad. The single biggest thing that pulled the industry back from the brink, as it were, was the Chinese economy’s early recovery towards the end of last year. And through 2021, it is sales in the far-east, especially in China, that has kept the Swiss watchmaking industry optimistic. Hong Kong, which has been the undisputed number one market for years, was already slipping from its perch due to the pro-democracy protests and China’s resulting crackdown. In 2021, according to several industry reports, it had slipped down to number 3, behind China and the US. Industry watchers doubt if it will ever return to its pole position.
However, despite the rebound, mostly thanks to China and online sales, the outlook for Swiss watches remains in the ‘wait-and-watch’ category. The so-called ‘Big Four’ privately-owned luxury brands—Rolex, Audemars Piguet, Patek Philippe and Richard Mille—have become even more dominant. According to an 8 September New York Times report, these brands have gained from demand for their watches far outstripping supply, as well as the super-rich recognizing the brands’ flagship timepieces as global-shock-proof investment. “The watches from these brands are universal liquid assets now. Of course, they’re all well made and recognizable. But there’s comfort for collectors in buying from these brands because buyers and sellers will value their watches as a recognized currency,” Geoffrey Hess, a New York-based watch specialist told NYT. In 2020, Rolex alone accounted for 26.8% of the market share, according to a Morgan Stanley report from March, displacing the Swatch Group.
High demand and low availability means that it is now a seller’s market, which might indicate why the sale of pre-owned and vintage watches, and especially the auction of top-of-the-line examples, is booming. Vintage watches as collectibles has been a craze for at least five years now, and this is a market that’s driven mostly by watch enthusiasts. There are great bargains to be had in this space, like a vintage Omega Seamaster DeVille or a Universal Genève Polerouter for anywhere between ₹1.5-3 lakhs depending on the condition. Apart from the pleasure of enjoying such iconic timepieces, even as investments, such purchases are sure to retain value, and perhaps even appreciate.
At the upper end of this curve, reflected in watch auctions from the likes of Sotheby’s, Christie’s, Antiquorum or Phillips Watches, is where the silly money is being spent, sometimes even for brand new watches. Take the Patek Philippe Nautilus Ref.5711 green dial, which was launched in April this year. It’s retail price is $34,890, but it’s a piece that you may never get to own even if you have the money for the retail price; because of a sizable waiting list, which may require you to wait for 10 years. In July, Antiquorum auctioned a brand new piece in Monaco for $492,000.
Nor is this an outlier. Last year, Sotheby’s sold a 1968 Rolex ‘Paul Newman’ Daytona for $306,378. In May this year, a Patek Philippe World Timer ref.2523 from 1953 was sold for $7.8 million at the Phillips Geneva Watch Auction XIII. In early August, online retailer A Collected Man sold a Philippe Dufour Grande et Petit Sonnerie Number 3 from 1995 for a record $7.6 million.
While Hong Kong may have been displaced at the top market for new watches, it remains the biggest market for pre-owned and vintage timepieces. The Phillips Hong Kong Watch Auction XII in June this year saw total sales of $24.7million, the highest so far for Phillips in Asia. All eyes are now on the Phillips Geneva Watch Auction XIV from 5-7 November. It will be a lot of fun, for a watch enthusiast like me, to watch online from the sidelines with a bowl of popcorn while horological marvels like the Philippe Dufour Grande et Petit Sonnerie Number 1 are sold for eye-watering prices.
Handwound is a fortnightly column on watches and watchmaking.