The FT on Friday had a rather good liftout about the watches and jewelry industry. In short, it’s finally stopped melting down: Swiss watch exports below the 3,000 CHF mark bounced by 20% in January (year on year, so you’re comparing to last January which really isn’t saying much), but watches above 3,000 CHF are still flattish, depending on whether you measure by value (smalls down) or by volume (smalls up). Incidentally, if volumes of the expensive stuff are up but values are down, you could pretty safely say that your average watch buyer is spending a lot less per watch than they would’ve last year.
But all of the growth has been driven by the Chinese market. Europe is in a funk; Japan is in even more of a funk; and nobody in the USA has time to buy a watch because they’re all too busy strategically defaulting on their mortgages.
Which would be all well and good, but this is China we’re talking about, so you know there’s going to be something shifty behind all that growth. And ta-da, this little tidbit is buried on page 18:
The typical [Chinese watch buyer] is a man, for whom an expensive watch is regarded as a status symbol. About 75 per cent of watches are bought as a business gift, according to Michel Chevalier, co-author of Luxury China: “A common arrangement is for men to select the watch they want and for it to be paid for by a business associate”.
GODDAMMIT STOP PUSSYFOOTING AROUND AND SAY “BRIBERY”. THREE-QUARTERS OF THE CHINESE LUXURY WATCH MARKET IS BRIBERY.
But if you read JRE, you’ll already know that.