The current market situation of the Chinese watch industry
As people’s spending power improves, Chinese consumers’ interest in luxury watches is becoming stronger. International watch brands are paying more attention to the Chinese market and increasing their market investment, with the market size of the Chinese watch industry reaching 82.33 billion yuan in 2020. Under the environment of consumer upgrading, the market size of China’s watch industry will continue to grow steadily. The market size of China’s watch market is expected to reach 96.16 billion yuan in 2022.
(Data source: www.askci.com)
According to industry insiders, the sales of imported watches accounts for 85%-90% in the entire Chinese watch market.
The future trend of Chinese watch market
Chinese watch industry: digital channels
The offline channel has become the main way of selling luxury and high end watches due to its irreplaceable value. Revenue from offline channels in China’s watch industry is growing steadily, and the watch market size of offline channels will be 71.59 billion yuan in 2020, accounting for 87.0% of the total watch market size.
In such an environment of high penetration of online business and e-commerce watch company and watch brands have gradually increased their attention to online marketing channels, opening directly-managed high end watch brand flagship stores or opening up online channel sales authorization for watch distribution service providers one after another in recent years. Over the past five years, China watch online sales revenue has grown faster, with a CAGR of 19.5% over the period.
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Chinese watch market: diverse segmentation
With today’s focus on materials, technology, sustainability and usage scenarios, we see a growing demand for individuality and character in the Chinese market. The rise of young Chinese consumers and technological upgrades are also driving innovation among Chinese or international watch brands, with technological refinements enabling deeper segmentation across watch brands to meet more diverse needs progressively.
Chinese watch market consumer segments analysis
Chinese watch consumer base
Data shows that young people in big cities with relatively stable incomes are the main consumer group in China’s watch industry. 77.4% of Chinese watch consumers are aged between 22 and 40, and consumers with incomes between RMB 5,001 and 15,000 and those who are married and have children each account for 60%. Company employees and business managers account for nearly 50% of the total. 82.5% of users come from China’s economically developed big cities.
(Data source: iiMedia Consulting)
Chinese Consumer Demand
In China, watches are no longer the exclusive domain of the rich. More and more young consumers want to express their personality and taste through watches, and no longer see high-end luxury watches as their only choice. As a result, light luxury watch products that are affordable but still have style are favored by a large number of young consumers.
This means that in China, young, fashionable and personalized light luxury niche watches are highly competitive and have a wide space for development and a large number of potential consumers.
According to iiMedia Research (iiMedia Consulting), the watch smartwatch category (46.5%) and young trendy brands (44.6%) will account for a relatively large share in 2021 in China. Light luxury brands (38.4%) and premium brands (33.8%) are also preferred by the public. Niche brands are gradually accepted by the public, accounting for 16.9%.
(Data source: iiMedia Consulting)
Key Platforms Influencing Watch Consumption in China
According to iiMedia Research, the main promotional channels for Chinese watch e-commerce merchants are social media platforms (84.3%) and e-commerce platforms to attract traffic (73.5%). 85.5% of merchants believe that promotion can attract traffic and increase the attention of their own stores, thus bringing conversion. 71.1% of merchants believe that promotion can directly increase sales. According to the analysts of iiMedia Consulting, Chinese watch merchants have obvious advantages in marketing compared to traditional offline merchants, which provides opportunities for small and medium watch brands.
(Source: iiMedia Consulting)
So for imported watch companies that want to enter the Chinese watch industry, digital brand marketing is very important.
A platform suitable for watch product recommendation – Little Red Book
Anyone who knows anything about the Chinese market knows that Little Red Book, the hottest “seeding(recommending)” platform for Chinese watch brands. Little Red Book, a powerful digital marketing channel, very competitive and very suitable for the promotion of high-end products like watches. Because its users are young, pursue life quality, have a strong desire to share, and have a high willingness and ability to consume. little Red Book platform is equivalent to China’s instagram.
In terms of placement strategy and content selection, watch brands have a lot of autonomy here. For example, they can cooperate with koc/kol, publish text and pictures, or shoot creative short videos, etc.
Besides, brands can also optimize their own long-tail keywords and use both search and information flow to expose traffic on Little Red Book for precise marketing.
WeChat, the official platform for watch brands in China
Another platform that is completely inescapable for watch branding in China is WeChat, the largest social media platform in China. For Chinese consumers, a brand’s official account on the WeChat platform is a symbol of authority and trustworthiness. In other words, Chinese consumers are in the habit of considering brands’ official WeChat accounts as their official websites (Chinese consumers are not in the habit of using brands’ official websites to browse for information and make purchases). So the information on the WeChat platform directly influences Chinese consumers’ perception of brand image and of course, their purchase decisions.
In the WeChat official account, the watch brand is able to perform all service functions such as new product launch, brand PR, consumer coupon distribution, interactive events, customer service and even purchasing. Once consumers follow the brand account, they can receive all kinds of information from the brand directly, which is important to increase user adhesion.
For products like watches, it needs to present a three-dimensional brand image for consumers and educate them (aesthetics, watch knowledge, selection methods, functional comparisons, etc.). Therefore, a fully functional and prestigeable WeChat platform is a necessary choice for brand marketing.
An efficient video marketing platform for watch brands – Douyin ( TikTok China)
The last thing that has to be mentioned is the huge traffic treasure trove that is the video marketing platform.
In China, Douyin (TikTok China) is very mature in terms of KOC’s product reviews, KOL’s recommendations and celebrity’s merchandising, especially live-shopping. TikTok provides a platform for all kinds of creative content and cross-border cooperation, which creates a very high impact for all kinds of products and brands. And TikTok’s advanced traffic pool algorithm can accurately explore users’ preferences, greatly reducing exposure costs, increasing customer stickiness and developing potential markets.
Imported watch brands need to put extra emphasis on their brand tone, and attractive images are especially important. With this need, TikTok is the most suitable marketing platform. Its marketing content can be entertainable, informative and fashionable, and it is easier to attract organic traffic on the Douyin (TikTok China) platform, which combines its entertainment ambiance with fashion perfectly . Therefore, imported watch products, as long as they can effectively produce original & intriguing ideas, it is not difficult to win wide attention on TikTok.
Watch brands’ sales channels in China
Watch brands’ offline distribution channels in China
Chinese consumers are still cautious when it comes to buying high-end watches with expensive prices, and they value trial wear, professional explanation and prompt after-sales service. In this case, the traditional marketing offline channel is particularly important. In China, the offline sales channels for watches are.
(1) Brand stores, operated directly by the brand and characterized by busy locations and a full range of SKUs, but offering few discounts. Different brands have different strategies, for example: Patek Philippe only sells through its stores, while Rolex does not use direct stores at all.
(2) Third-party watch retailers: These include branded boutiques, duty-free stores, or stores with a collection of multiple brands. Usually such stores have discounts for VIP customers.
Watch brands’ online distribution channels in China
Brand e-commerce platform
In China, brands that already have a high level of awareness and reputation can of course use their own e-commerce websites to sell their watches, which can save them a considerable amount of money. However, the brand needs to optimize the Chinese version of its website in order to win Chinese consumers’ trust.
Chinese online sales platforms
(Data source: iiMedia Consulting)
According to iiMedia Research, Taobao, Tmall (59.8%) and Jingdong (59.2%) account for a relatively large share of Chinese watch consumers’ watch e-commerce shopping platforms in 2021. Although the volume of comprehensive e-commerce platforms is relatively large, the volume of comprehensive e-commerce platforms has not pulled away from exclusive watch e-commerce platforms by a large margin.
(Data source: iiMedia Consulting)
Tmall International
Tmall Global, the import online retailing platform of Alibaba, is the most trusted platform for Chinese consumers to buy imported products goods and services. To date, more than 29,000 overseas brands from 87 countries and regions around the world have entered Tmall International, covering more than 5,800 categories, with more than 80% of them entering China for the first time. For watch products, this sound and fashionable platform is highly competitive.
There are two entry modes for imported brands in Tmall International.
- Tmall self-operated online store: brands buy and sell their products to Tmall as suppliers, and Tmall is responsible for the sales and service of the products.
- Brand official flagship online store: The brand opens its own official flagship store in Tmall and pays a fee for the brand to control the construction, management and operation of the store.
Jingdong International
Jingdong International is a brand belonging to the Jingdong Group, which focuses on cross-border imported goods product or service and has won a very high reputation among Chinese consumers for its efficient logistics and customer service, and is highly advantageous for watch products focusing on technology.
Jingdong International has attracted nearly 20,000 brands with nearly 10 million SKUs, covering product categories such as fashion, mother and child, nutrition and health care, personal care and beauty, and imported food from more than 70 countries and regions, including the United States, South Korea, Japan, Australia, France, and Germany.
- Jingdong self-operated online store：Jingdong self-operated from the manufacturers unified purchase, shelves for sale, the brand can enjoy the logistics and after-sales service of Jingdong self-operated stores.
- Brand flagship online stores：Brands or exclusive licensees of Jingdong use the Jingdong platform to open stores. The platform charges an annual fee for use, and Jingdong is not involved in specific operations, except for managing merchants and customer services (refunds, complaints, etc.)
There is huge potential for watch products to grow within the Chinese market. Now is a good time for new interntional watch brands to impress Chinese consumers with their unique features. With premium quality and effective marketing strategies, new international watch brands have great potential to develop within the Chinese market.
Want to learn more about the Chinese watch market, the Chinese e-commerce platform and effective digital marketing strategy for international watch brands ? Please contact STAiiRS.
STAiiRS has over ten years of marketing experience and provides professional digital marketing services in China.
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