December 16, 2018
by Ariel Adams
Early December 2018 in Shanghai and it’s snowing outside while energized watch collectors buzz around tables of rare timepieces and other luxury delectables. More than 200 strong, they crowd and converse in a tightly packed chic restaurant space atop what is a museum near the city’s central shopping district. The attendees represent the region’s most important new generation of watch enthusiasts with group members flying in from as far away as Turkey. In addition to being a well-organized “watch guy party,” some of Switzerland’s most celebrated independent haute horology brands are also on display – featuring a unique mixture of timepieces that are both loaned in from the brands but even better represented with pieces from the personal collections of members of the Shanghai Watch Gang. Rich with personality and humor, the Shanghai Watch Festival was quite unlike anything I’ve seen before after having attended countless collector events for more than a decade. At least one longtime independent Swiss watchmaker heartily agreed with my sentiment.
More than a mere meet-up and not quite your traditional watch industry product-viewing event, the Shanghai Watch Festival is a new breed of activity spearheaded not by the watch industry or the brands themselves, but by the collectors for whom they are meant to serve. I’ve become witness to the first serious watch show by collectors for collectors – and it merits some discussion of how such an event came about in the first place.
Daniel, Andy, and Kelvin – three local collectors and active members of the loosely defined social media group known as the Shanghai Watch Gang – put together the Shanghai Watch Festival event in an impressive short few months. Artistic details brimming with personality that decorate the space are perhaps the most unexpected feature in what might otherwise be a loose collection of presentation cases and people donning enviable wrist gear. A custom-made replica of the Infinity Gauntlet from Marvel’s Avengers universe was produced to hold watches in place of the expected “Infinity Stones.” A replica portrait of Monalisa and a self-portrait of Van Gogh are modified to appear as though a three-dimensional arm complete with hand and wrist extends out of the composition. On each wrist is placed a modern luxury timepiece. Canvas-sized comics created by the group with inside-jokes about watch collecting also feature holders for ritzy timepieces rare used as the punchlines of jokes. The humor is sharp, witty, and persistently relevant to the mentality of the group. They share together, they collect together, and they aren’t shy about merrily joking around together.
Most members of the collector group have a split personality that mixes Chinese heritage and also cultural and educational exposure in other parts of the world. Young, globally-mobile, and financially successful, these men define in many ways the new face of the informed luxury watch consumer – not just here in China but across the world. Groups akin to the Shanghai Watch Festival exist in many other developed financial sectors where money and diverse cultural interests intersect making the perfect formula for consumers to be interested in high-end timepieces.
At its core, the Shanghai Watch Festival is about human relationships and friendly bonds. Members come for the watch talk and stay for the comradery. One particularly accomplished collector addresses a seated dinner with an emotional tale of how his watch collecting hobby was entirely solo for more than 20 years. Finally meeting others like him who shared a similar passion changed his life. Watch collecting is a window to friendships as well as business networking. On multiple levels, finding other watch friends has proven to be a highly effective way for adult men to find like-minded friends and colleagues. Even though the social element is a massive draw, it is challenging to take the conversation off timepieces.
What’s also clear is that when timepiece enthusiasts come together – there is a natural outflow of commercial activity. Favorable recommendations from one group member to another go a long way in validating watches and tend to have a downstream demand creation effect. Watch brands keen to sell directly to buyers and further bypass much traditional retail are more than happy to investigate how they can market their products directly to enthusiasts groups. Though tastes can be finicky and group conversations about price and value leave little room for smoke and mirrors in the sales process.
For what it’s worth the traditional European-based luxury watch industry is along for the ride. Watchmakers and salespeople representing the hottest goods gladly mingle with buyers and their friends so long as it is good for business – which it often is. The marketing strategy of directly connecting with end-consumers is a winning formula for ultra-high-end watchmakers that produce sometimes only a handful of watches per year and for the most part make do without much of a traditional retailer network. Having experienced watch-lover bubbles sprout up all over the world in such diverse places as Brazil, Mexico, the Middle East, Russia, America, and a slew of financial-sector regions in Asia – the people from Switzerland in attendance with their collected experience sometimes feel they know the local Chinese collectors here in Shanghai better than the collectors know themselves. One prestigious Swiss watch brand representative tells me, “I know when a collector is ready for my products. This will never be their first watch, they need to build up to it. Until they are ready I don’t bother trying to explain my products to them. It doesn’t matter if they can afford it. I know when they are ready.”
Such wisdom about the trajectory of the watch collector from the Swiss perspective is at delicate odds with the ethos of the collectors in presence who believe they represent the face of the next generation of watch buyers. Intelligent, well-connected, and financially powerful, the consumer here knows their impact on the bottom line of many watch brands. With that said, as is the case in a rapidly changing Chinese landscape always looking forward – these local collectors sometimes forget breeds like them have come and gone in the past. Switzerland’s watch industry has been riding economic bubbles around the world since the 16th century. In the 17th century emissaries from Switzerland traveled to China in order to collector orders for bespoke pocket watches and other timepiece creations meant exclusively for the ruling class. Following those in power with the monetary means to show it off has been a Swiss specialty for generations.
In the last 30 years alone the luxury watch industry has focused significant energy on “BRIC” (Brazil, Russia, India, and China) countries as bright spots in developing worlds where huge pockets of wealth create new money desire for status and prestige. Timepieces for men remain one of the most palatable and enjoyable manners for men to have fun and show off at the same time. Out of all of the BRIC countries, China was clearly the most profitable for Switzerland, but the road there has been bumpy for the Swiss and local watch consumer alike.
Just a few years ago the massive growth of watch sales in China was unfortunately linked to the dubious practice of grafting. In other words, expensive watches were being purchased with state money or other inappropriate funds for bribery purposes. Such practices are apparently common in China and the real scandal was doing so with public funds. A local crack-down on grafting resulted in a demonstrable decline in watch sales in China – but by no means an end of China’s importance to Switzerland. The Europeans saw high Chinese demand for watches despite relatively little consumer sophistication about the products themselves. That means unlike more developed markets such as Europe where consumers had a better idea of how to purchase watches, Chinese timepiece spending was seen as being much higher than actual product knowledge itself. With the era of almost purely conspicuous timepiece spending coming to a close in China, it is being replaced by spending from a new crop of hyper-informed collectors and enthusiasts powered by social media and the connecting power of watches for men eager to find friends in a fast-paced and increasingly impersonal global business environment.
China currently experiences one of the highest taxes on luxury watches at a present date rate of 60%. Purchasing timepieces outside of China is also no longer a legal means of avoiding taxes. Yet demand stays strong and a thriving pre-owned market local to China is fueled by years of impressive inventory flowing into Shanghai as well as many other cities around China.