It is no secret that many international financial markets are currently in a state of turmoil, in large part due to the sub-prime mortage crisis and the resulting fall-out. However, this constant threat of recession has not yet seemed to have any apparent effect on the global watches market, which is projected to exceed US$31.6 billion by the year 2009, growing at a compounded annual rate of nearly 4% during the 2001-2010 period. This growth is largely being fueled by the changing trend in the watch industry which is now seeing many consumers buying several different watches to suit their needs as opposed to one for all occassions. Many consumers, this author included, have several watches in their weekly rotation and may even buy a watch for a specific occasion or outfit.
An excellent indication of future trends in the market comes from a recent report entitled “Watches & Clocks: A Global Strategic Business Report” published by Global Industry Analysts, Inc. This report provides a comprehensive review of market trends, product overview, key markets worldwide, product introductions/innovations, and recent industry activity. The report analyzes market data and analytics in value sales for regions such as the United States, Canada, Japan, Europe, Asia-Pacific, Middle East, and Latin America. Each watch market has been broken down by the following product segments – Mass-Priced Watches (Priced under $50), Middle-Priced Watches (Priced between $50-$299) market, Upper-Priced Watches (Priced between $300 – $999), and Luxury Watches (Priced $1,000 and above) market over the period 2011-2015.
The report has determined that whilst the United States represents the largest watch market in the world and is projected to reach US$8.6 billion by the year 2010, registering a CAGR of about 2%, Asia-Pacific is actually the fastest growing clock market globally and is projected to register a compounded annual growth rate of more than 3.4% during the ten-year period (2001 – 2010.)
Whilst this represents an exciting opportunity for many of the world’s great watchmakers, it is also a strong indication of increasing consumer fickleness in an industry largely defined by brand loyalty. As many high-end consumers begin to seek timepieces that suit specific outfits and/or occassions brand may play second fiddle to the aesthetic features of the watch such as design and materials. Main stream consumers may compromise on price in order to be able to give their collections more depth, and thus watchmakers will need to respond to this accordingly.
Any way you look at it there are exciting times ahead for the global watch industry and this author will be watching quite closely to see how things play out.