Lack of luxury watches boosts $ 20 billion second-hand market growth

Many companies, including the well-known online marketplace itself, are aiming to become a high-end watch eBay.

During the Covid-19 pandemic, the demand for high-end watches exploded. However, the Big 4 watch brands (Rolex, Patek Philippe, Audemars Piguet, Richard Mille) are sticking to the limited production that makes watches very rare. As a result, the business of buying, selling and reversing used and vintage watches is booming online, with more start-ups competing to become a major digital market.

McKinsey estimates that second-hand watch sales will reach $ 18 billion in 2019 and could exceed $ 30 billion by 2025. Second-hand watch sales will be about half the size of the new retail watch market by 2025. According to a consulting firm.

Toby Bateman, CEO of popular watch collector site Hodinkee, said: “There are many watch sales platforms. Customers don’t always know from whom they buy their watches. We can’t guarantee they’re genuine. We can’t guarantee they’re not Franken watches. And they can’t guarantee that the watch is working properly. “

Hodinkee launched a second-hand watch store on Tuesday. Here you can buy and sell watches manufactured after 1990. The company raised $ 40 million in December from NFL quarterback Tom Brady and singer John Mayer. Apple Alum’s Tony Fadell and investor Peter Chernin aim to be “the world’s leading brand of all watches.”

Hodinkee’s second-hand shop begins with an assortment of 250 second-hand watches and offers certification and refurbishment from state-of-the-art watch facilities in Atlanta. According to Bateman, the advantage over Hodinky’s list of competitors lies in its expertise and history as a trusted name for watches.

Still, rivals are in the spotlight of investors. Germany-based Chrono24 recently raised € 100 million ($ 116 million) from investors such as General Atlantic and LVM HCEO Bernard Arnault’s Agray Ventures. With over $ 1 billion in investment in Chrono 24, it became the first “unicorn” in the segment. According to the company, it sells about 500,000 watches from over 3,000 retailers and over 30,000 retailers.

Meanwhile, Switzerland-based Chronext plans to raise approximately $ 270 million in an initial public offering, which will add value to the company by more than $ 1 billion. However, Mr. Kronext said last week that he would postpone his debut due to “unfavorable market conditions for high-growth companies.”

Chronext has put together a star-studded board — including the former Facebook Marketing Chief Gary Briggs and Former Barneys New York CEO Daniella Vitale — and aim to expand in the US and Asia.

Companies such as Watchfinder, WatchBox and Watchmaster are also expanding and expanding their market share.flat eBay Targeting the Rolex crowd, we have launched an authenticity assurance program targeting high-end watch collectors.

The question is how long the current watch boom can last, and whether there is enough online sales to go around. All of the Big Four watch brands that drive most of the high-end collections are privately owned and maintain low production despite huge demand in order to maintain their renowned quality and exclusivity. According to a Morgan Stanley report, Rolex sold 810,000 watches last year, Patek sold 53,000 watches, Audemars sold 40,000 and Richard Mille sold 4,300.

Demand is expected to continue to outpace supply, at least in the short term. Stainless sports watches and other popular models are nearly impossible to buy in retail stores, with long waiting lists and low quotas, which are driving up secondary market prices. Patek Philippe Ref. The 5711 Green Dial, which sells for $ 35,000, was auctioned in July for $ 490,000. According to Chronext, the Audemars Piguet Royal Oak 15500ST (blue dial) has nearly tripled from 2017 to over $ 55,000, and the Rolex Day-Date 40 has increased 76% from 2017 to over $ 50,000.

Industry executives say the surge in online watch collectors and information sites, as well as the surge in global wealth driven by stocks and cryptocurrencies, has created a whole new generation of young collectors to buy and sell watches online. .. As more collectors flash the Swiss status symbol on Instagram and TikTok, so does social media. For watch buyers and sellers, start-ups, and online marketplaces, it is not yet known how many of these new traders will get stuck if second-hand prices and demand fall.

“Today, far more people think of themselves as collectors and enthusiasts than they were just a few years ago,” Bateman said.

Lack of luxury watches boosts $ 20 billion second-hand market growth

Source link Lack of luxury watches boosts $ 20 billion second-hand market growth

Back to top button