PRIMETIME - Watchmaking in the News - Special 2018 Edition
Hello. And welcome on prime-time watchmaking. In a news and I know we didn't publish a November, episode because. Instead, we simply, wanted to share with you a special. And rather full 2018. Edition, coming back on the main watchmaking, highlights, and trends of the year but first of all thanks so much for, your appreciation. Of what we do here on the watches TV you are now close to eighty eight thousand, subscribe, to this channel, and we, clearly know that we mainly talk about some pretty nation, exclusive, things so, I think this is already quite remarkable. I guess, we, could be a bit more popular if we make some more affordable. Brands but. I have to say that unfortunately. We. Are a bit too privileged, having access to the very top of qualitative watchmaking and I just wanted to stress out that there is really nothing snobbish. About what we do we just love the art of watchmaking we, love the people behind these cross and we indeed prefer to focus on stories where this notion of art is at, its core and this is naturally found in those unique brands and places we can visit but. I would also, like to say your mega special, thanks to our patrons, who make it possible your support, really means a lot to us and definitely. Helps us very concretely and independently. In sharing what through watchmaking is all about and one, last thing because I have to confess that we are taking a bit more time than expected for. The formal introduction, of the Watchers club but, very soon you will know more and I just wanted to add that all patrons, will become automatic members. And gain some pretty cool advantages, so in soon Christmas, and all, contributions. Are, immensely, appreciated. And welcomed link below if anyone, inspired, so, off we go and let's say that 2018. Has been an interesting year with, some pretty important, structural, changes, throughout the business with. For instance the necessary, evolution, of what related events the predominance, of the big power brands, how the digital, marketplace, has finally, been embraced, by brands, the significance. Of independent. Watch makers impact. Of the revised swiss-made, criteria. The, general, trend of more affordable, watch collection the crazy world of auctions, and the development, of its spin-offs, well, plenty of things rather, rich program and you. Just hang in there and I'll try to make it as dense and summarized, as possible. Okay so let's start by talking about the business in general even though we don't have all the numbers concerning, this year but but, this doesn't prevent us of already interpreting, some of these figures and sharing with you some general trends coming back on recent history 2014. Really represented, a climax, of success for the Swiss industry, as a whole and it, followed a pretty crazy streak of uninterrupted, record. Years so what could go wrong when you only know success, well, that was about to change and we already talked about this a few times but, after a couple of difficult years for the industry, 2018. Seemed to show us like to rebound and reflect not only is like a better world economic, climate but also the brands ability, to come up with more desired, and better, positioned, product so Swiss experts, figures back, on the increase in terms of volume but. This has to be taken with some kind of fine caution, and this for a number of reasons expert.
Figures Just mean precisely this, export, figures watches. That have gone out of Switzerland and doesn't necessarily, mean, watches, that got actually, sold on the various markets coming out to the dealers and being bought by you guys and we. Know that, from the past that this, has been a very practical way of reassuring. Shareholders, that your company, your group was performing, well and you have to remember that most of the big brands, belong to publicly traded companies. Who, need to come up with some sexy numbers, to keep the value of their shares or, better increase them, so creating stocks, on the market has always been a very convenient, way of hiding, the true performance, and success. Of watch, brands, and the. Very immense, downside. Of this is that at one moment or another where these stocks where somebody has to take care of them I mean thus great market channels being fuelled discretely, and/or brands having to repurchase, these stocks at some, high cost for them so, one of the benefit of the small crisis, that did that hidden industry of the last few years at that brands and groups, took their responsibilities. Both back large, portions, of these unwanted Watchers and tried to dry, out this gray market, despite, the fact that you can still find so much out there but, nevertheless some, of the that their best but, in a system where eternal. Growth is seen as the only solution for survival, well I think this is highly questionable and, should we not focus, more on meaning, and sustainability, instead, well at least this is what we try to concentrate here on the watches TV ok so let's go back to this year's numbered because yes we saw increase in exports but that will mix numbers from, 2017. And 18 to make my point, overall, the Swiss industry, exports, 24 million watches per year representing, roughly 19 billion Swiss franc that's approximately, 19, billion billion. US dollars so 24, million, watches that's not bad but again you have to put this into perspective of, approximately, 1 billion watches being. Produced around the planet well, the Swiss industry, by definition represented. Very small part of this though, in value, it accounts, for huge, portion and this is what makes our position here in Switzerland very special, we benefit from an astounding, image worldwide, one based on quality, history legitimacy. Clever marketing, and so, forth and we can only be very proud, and happy about this but, we have for, sure some pretty strong challenges, of ahead of us anyway seriously to keep this in mind in the year 2000, export figures were presented, almost 30 million Watchers for a value of 9 billion in, other words and in a bit less than 20 years we export, 20%.
Less But the overall value has more than doubled meaning that the average read price has significantly. Increased and this is where it becomes very interesting for, us watch, is priced above 3000, dollars only represent 5 percent of overall export. But 50 percent in terms of value this segment of the Swiss watch industry is, the only one which has enjoyed us strong growth in 2018. Plus 11 percent whereas, watches below that price point I kind of only declined facing for instance very strong challenges from smart watches I mean the Apple watch is already selling more units, than the entire, Swiss, watch industry and, this, would continue an, even increase, in the next year's so, the main point to understand is that even if the high end segment is performing, pretty well well watchmaking, still needs the industrial, capabilities, and know-how to exist. Otherwise, I mean we would only be talking about artisan, brands and/or I mean prices, would be even higher for him for mid-level and high-end type. Of brands and their products, so additional, to this where are these watches mainly sold and if, you look at the figures while we clearly see very strong dependency. To the, Asian market in general in the top 10 countries buying Swiss watches 5, are Asians and Hong Kong with the population, slightly, above 7 million people is number, 1 but, you have to see Hong Kong more as a distribution. Hub and you, would say being second, and the UK Germany France and Italy also, in desktop them so yes as long as the economy is not doing too bad in these countries and/or, that tourism is still growing a lot of sales well I guess we're kind of ok but there, are already some signs of slowing economies, such as in China even, though the size of the market is huge by essence so, in a more unpredictable. World what impact, will this have in 2019. Still, really remains, to be seen and I don't want to be spooky, about it of course ok. A way of protecting the perceived value of Swiss watches has been the introduction of new Swiss made criterias meaning that today if 60%, of the waters value has to come from Switzerland before, it used to be 50% well. In general this is good but what it mean is that since a long time some Swiss brands have been subcontracting. Some of its manufacturing, to, cheaper, places and therefore parts.
Of Its know-how - in, the same process and it's not surprising to see some people talk more in favour some other alternatives. In terms of what provenance, since, you can find of course some, kind of comparable, quality and, creativity elsewhere, so this is very interesting but definitely represents, an additional form of competition and this is a in particular, for Swiss brands that are already kind of struggling and I say this because for me 2018. Really. Marks the dawn of the super power brands, I know we've always had stronger players and others but now this club of approximately, 10 brands are really in a category, of their own and I mean Rolex Patek Phillipe would not be gay of me Eugene. Blue Emil, are able to see Cartier, and a few others and they, are not all clones I mean there are not all in the same st., segments, neither produce the same number of watches but they all benefit, from a huge power of Attraction, mainly due to their mastery of marketing, with the budgets obviously that comes along but, of course when also. Identifiable. And iconic. And quality of products, brand whose product pricing in a certain way doesn't need to reflect some kind of a make Rosh Hashanah when, you're talking luxury one of its component, is often the decorrelation. Of the price of the object, and the cost of its actual production and are obviously limits to this but the absolute true judge of this is the market and for these brands well they seem to get everything right the highly desirable products. Even managing, scarce city pretty cleverly, think of the steal Rolex craze today promoting. The image with huge means and how frustrating. It must be for the remaining ones to, try to attach, their wagon on this rolling train of success which, by the way is getting stronger, and stronger it's a kind of a virtuous, or vicious circle. Depending on which side you, find yourself as a brand so enterprise to be part of the club is almost, unattainable today, and it really feels like this kind of winner-takes-all. Situation.
So Yes this may sound pretty bleak for the followers, and that's, the main reason why they have to be even more clever with their strategies. And try to remain appealing, regardless, but, probably accept, the position that they ink except, ting in some cases to produce less come, with more affordable, products, and this is something we started seeing more and more this year but. Then we have the type of brands that we love here and that are in the totally different category, and I'm naturally talking, about this independent. Watch making scenes brands. That are generally, headed by watchmakers, or visionaries, who stick with this notion of art mechanical. Art and we see and feel so. Much more interest, by the public for this and naturally, this makes me very happy, I mean, think for instance that the feedback we got from people attending Basel well this year and their, true appreciation. Of the Italian section of the show where people could meet and talk to the watchmakers, better, understand, their products, share precious, moments, with them and it, is something witness. Also through, other events. Held worldwide so. This obviously lets me rebound on the evolution, of these fair since 2018. Has really been marked by a clear defiance, from so many brands towards such events we've, seen huge numbers, of brands spooning out and 2019. Will most, certainly be, a very pivotal movement, and these fairs really have to be very extremely, careful, and they simply don't want to disappear, from the eunich and again. I really think that these events are really, necessary but, their mission must evolve, and implicate, much more the end consumer like I said previously the absolute, judge is you their consumer, whether active, or not and by this I mean that we caught all by super expensive watches but. We can all appreciate and, respect these products, we meaning you and me our part in maintaining the hype around them and this also creates a lot of value we are good advocates, and even for those actually capable of buying them knowing that a wider group of people understand more these timepieces, and, are even sometimes, literally drooling, at these objects, I think, it increases, their general, appreciation and, if you're privileged enough of possessing, such an object well you should feel even better or more proud of having such beauties, on your wrist so, these events should definitely.
Contribute, With, this mission and it's, really going to be very interesting. To see how Buzzard world will tackle this for. Its next edition, as they are the hardest, hit by. This for, instance I mean you know with the entire pull out of the swatch group can imagine this no one would have thought of this in a few years ago I mean it's quite shocking but you know welcome, to a new reality, well, I'm receiving tons of emails from the organizer, on the year of the show and I can really feel that they are trying and get us involved as much as possible I just hope it's not too late on, a personal, side, I really think that the industry should have the courage to put everything, on the table to do so free, of the history and pride and ultimately, I think that we should merge the two big Swiss events Basel would NS HH come back to a single event a year with, all the players under, one same roof yes these are trade fairs but they can't only be that I mean for instance having part of the event dedicated, solely to the business side of things during some reserved days and then, the, remaining days focused, on the public depressed. I mean host conferences, and forums be more interactive, display. The crafts and artists and the schools include. The vintage world have auction, houses involved, for instance so, yes I may be a little bit dreaming, but wouldn't that be so fantastic a, single movement where we could all mingle, and this can be done either in Basel, I mean it's a hundred-year-old and legitimate, event but why not in Geneva and have this managed by people that are real, organizers not only people kind, of simply renting out square meters or in the case of this I change mainly by one of the pyro group of the industry, main Englishman I know, there is a lot of politics, behind all this but for the sake of the industry, as a whole for Switzerland, to shine even better I really think that this sure would, be part of a solution brave. And courageous move, for the greater good of watchmaking, precisely. At a room at the moment, when, quality watchmaking is facing, an inevitable. Shift of its environment, like refusing, to see yes that there might be a serious, issue with global warming ok, I may sound a bit of an idealist but you know my love for his industry, but sometimes I'm gonna get again, take a bit scared of where things are going to be very honest with you and yes I know we're heading into an even more digital, world but for me mechanical. Time telling device will always, make me dream so much more than the latest gadget, and don't get me wrong I do like gadgets a lot too, much. And. We. Interrupt, this program that, you were most certainly thoroughly, enjoying for some breaking, news a couple of hours after our primetime show, had been recorded. Our editorial. Room received a shocking press release sent from both the SH H and Bowser, world announcing, that as of 2020. Both shows will now take place one, directly, after the other, Alleluia, they talk to each other and going, in the right direction and, schedule, has been seriously, revised, no, longer will people come in fries in Geneva in, January, as the, SI Shh will now occur between the 26th, of April. Through the 29th, followed, directly, by Basel from, the 30th to the 5th of May 2020. And this, synchronization, of both event has been agreed till, 2024. Let's hope they will make it till then okay let's be a little bit less cynical and yes this is good news but we'll have some consequences, there are a few brands one way or another on, both venue, I'm thinking for instance that some independent, brands from the Kinesiology.
Such As NBN f / H Moser and other, members, of this gang so, what will they choose, stay and they say change or go, to Basel well personally I'm pretty sure that Basel world will do what it takes to, make them choose buzzer better rates and so forth and the, sh8, will focus back on the big names but, as mentioned in the current, primetime you have many, brands organizing, special exhibitions, and sales meetings, in Geneva during this January, week the, LVMH, armada of tag blue, and Zenith for instance and plenty of other ones in various hotels scattered. Around the city so naturally, all these guys will stop this and for, Geneva this will represent quite, a loss in terms of accommodations, and so forth but at the same time it means savings, for all and this is good precisely, at a moment when people are starting to account very seriously, their marketing, budgets and maybe, this will free up some resources to organize, more things coming your way who knows anyhow. For us this will also have some consequences, because to cover both venues will for sure be a real wash marathon, or even, Ironman, material, are we looking forward the logistics, of this and better, get some serious training by then okay, you may now return to you primetime program, enjoy. Okay. Let's continue with some trends witnessed this year and I will talk a bit more about the retail side of things in particular this digital, side as many, brands are now offering, direct online sales and when, you cannot when you can more or less buy anything on the web well it's about time that this solution was. Finally, proposed, I naturally. Don't think it would ever supplement, the actual physical side of the business nothing better to go and test the watches yourself, but sometime it's simply difficult to do so and when you think since when people have been purchasing secondhand, watches on platforms, such as eBay well, it definitely proved, that many, were already willing to buy watches through a simple click but. There is a clear distinction, between new, products, and a secondhand one and that's also why we see more and more brands coming up with more, concept, store like experiences. Not only do brands internalize. Part of the margins by doing so but, very importantly, they want you to feel the brand experience the, brand and this is something which has been there successful, for instance flourish I mean since already a few years but now we see Audemars Piguet coming, up with, dedicated. Lounges, a trend, also witnessed with the IWC and more recently by Breitling I mean, it's a clear shift and we go away from a simple retail shop to something more personal there's, a club dimension, and this, for, me is something we will see more and more in the future and I quite like it I mean owning an object is one thing but living an experience purchasing, it makes, it definitely, more fun and meaningful and, talking, about the second-hand market digital. Well I had, to come back on some big moves this year in particular the, acquisition, of watch finder by the wishbone group after the full takeover of mr., Porter so, now they muster both ends new and secondhand. Digital. Sales and naturally, this will enable them to pump in the system some unsold, water then it seems they've, already, been pretty successful, at it and generating some serious, revenue with both endeavors, but, we've all seen also, seen a traditional. Platform such as eBay, strengthening. The seriousness of transactions, made there with some kind of trustworthy. Certification. Certification, of, sellers well, I mean the competition on, the digital side of thing is for sure getting, fear seems fiercer, and fiercer, but I still like to go and wander around some tiny boutique and find this special, piece talk about it with the seller negotiate. A little bit well something, something nice and obviously, human too but. When you talk secondhand, well what can we say about the world of auctions, I mean the trend of crazy prices, has continued, and the, refuge value of some pieces is more, than proven, with some clear confirmed, winners, for instance more and more Rolex, watches having, reached some real, stratospheric.
Prices, And we, don't see this really, changing, and completely, on a side note I'm pretty sure that the success of these Rolex contributors partly in today's hype for the brand I mean it shows a signal, of true worth it's, reassuring though, I mean the brand has never been as successful as today producing, record number of watches, despite, the steel product, the drought witness, everywhere, and people willing, to pay high premiums, for this year's GMT, absolutely, crazy but. It's true that Rolex is the only brand that has always benefited, from these hot commodity, status cash, on the wrist anyhow. The, big names of this auction industry, are clearly actively, doing what it takes to keep their hype around their business for, instance they all got away from contemporary, watches. Apart from exceptional. Watches, but, here too we start to see new, players trying to take a portion of the business we saw for example chrome, 24 coming with an online bidding solution, eBay mentioned, before and I'm pretty sure that in the near future we'll see some new initiatives and inventive, collaborations. Such, as this for instance recent. Partnership between Christie's. And German brand moritz Grossman, who, for the 10-year anniversary of the relaunch of the brand came, out with, a selection, of 24, unique, pieces, exclusively. Sold by, the auction house so, anyhow, what would. Be really interesting, to think about is what are the current modern pieces that might reach diese skyrocket. Prices in the next 20 years think, about it what could be the good Gambas if you were willing to sit on your investment, that long I mean just just food for thought okay. One last thing I wanted to mention in terms of trends seen, this year and this, I think is really going in the right direction well, it concerns the after-sales, dimension, of the business as more, brands are increasing. The duration of their warranties, on their products, we, have talked about omegas, overall, extension to five years but I, so that Faberge is now offering a 10 year warranty as long, as you service you watch after five years and please note that this service is free of charge okay, Fabio J is a big name but kind of a challenger, in the water department compared.
To Others and it's a clever way of standing, out but I personally, really like this idea I really, hope we'll see more of this in the future it's a very good signal one of trust and bran has in its product trust it wants to establish with its customers, well a strong and positive message, one that proved once again that when you buy a mechanical, watch you buy something durable something, for eternity. Like some, people would say and obviously. Something unachievable, never, with any electronic. Device something by the way acknowledged. By Apple superstar, designer journey I've who, recently said, that they shouldn't have called the Apple watch or watch ok, enough said about some, of these trends, of 2018. Can't, wait to see what will we'll be in for in 2019. And it will start already in early January, with the SH H here in Geneva is a slightly revised version lasting, four days instead of five a few more friends existing, nevertheless, but, at the same time quite a lot of other brands will be hosting events and shows in Geneva and we'll, do our best to cover these other venues, I promise. We'll also soon announce what, our watches Club wouldn't be all about for instance whether more these what tripping experiences, for their members and please remember that all our patrons will become automatic members. So if you want to join the club well link below, ok I know it feels a bit pushy, but sometimes has to be done and coming, back on some of our yearly videos I really think you guys liked these, walkthrough, videos some more coming same, regarding, don't, do this at home segment, with our good friend Peter and we'll, also continue with, our who's, who of watch making one, episode, coming, very shortly regarding. A big historical, name but I get also. Wanted to mention that it's this, time of the year for some serious, watch born and will soon publish some of our best shorts of 2018. And I know you guys also like this so, a bit less talking for me just a moment of pleasure for the eyes and I hope it will slightly compensate. From today's primetime, speech and, additional. To this we will also publish a special video about this year's winner of the GP Hg that's Beauvais.
It's Versatile. R22, because in a previous interview with, mr. Pascal Hoffa we had talked, together about the three members of this impressive, family of the acetyl, Watchers and since, that over the years we had the chance of filming all three well this will be another nice, little treat for the eyes okay, time to say goodbye and on behalf the small but totally, dedicated, team of the watches TV I just wanted to wish you a very happy Christmas from, our Geneva Club a fantastic. New Year and yes, off we go for it our traditional, Viva watchmaking celebration, but let's make it a little bit special and. Watchmaking. Always. Want to do this so see you real soon thanks, for watching commenting, sharing and. Active, support we, feel blessed thank you so much.