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Formerly interested Chinese retailers are looking at high-end watches as a better store in the face of the economic downturn and President Xi Jinping’s growing campaign against housing ideas.
A number of high-end watchmakers told the Financial Times that the business started in recent months when the wealthy stopped buying extra homes and instead spent their extra money on luxury watches like Rolex and Patek Philippe.
Procurement, experts said, has helped keep Chinese watches by 40 percent in the first 10 months of this year even if the economy recovers.
Camille Gaujacq, a research analyst at Daxue Consulting, a Shanghai-based market research company, said the decline in real estate sales, “soon” for the wealthy Chinese, prompted many to look for alternatives.
“High clocks could be the answer,” Gaujacq said.
Property has been a one-way bet in many Chinese cities since the country’s urban housing market was liberated in the late 1990s. But Xi’s desire to save Common prosperity, and the fall of Ideas for the China Evergrande Group and other high-power developers, have led to a low descent on real estate prices in recent months.
Researchers and buyers are increasingly expecting the decline to continue. The Politburo of China’s Communist Party reiterated Xi’s claim that “houses are residential, not fictional” although they are based on economic means.
On Monday, China’s largest bank announced a reduction of five percent in one year “Loan prime rate” up to 3.8 per cent but left the five-year rate, which applies to the loan rate, unchanged at 4.65 per cent.
While consumer demand has reached a critical juncture due to the economic downturn, high-end watches have become popular among the wealthy. An October survey of 1,500 Chinese officials with more than Rmb500,000 ($ 78,370) in annual homes by CSG Intage, a Hong Kong consultant, found that 88 percent of respondents planned to save or increase the cost of buying high-end watches, which cost money. Rmb76,700 approximately, in the next 12 months.
“The high end of the watch market is very strong,” said Simon Tye, the study’s co-author. “If you go to a Rolex store right now, it won’t be enough [watches] customer marketing. ”
For many wealthy consumers, high-end watches are not only a symbol of responsibility but also a barrier to rising prices.
In the eastern part of Jiangsu, Sam Yu, who owns a two-room electric heater, thinks his purchase of a Rmb700,000 Patek Philippe watch in August was a “smart” investment.
“After two years I can sell the watch and make a small profit,” says Yu, who bought the house recently five years ago, “and I can’t do that with the house. Considering the uncertainty of the point, it can take months to find a buyer unless I offer a big discount. “
According to Watcheco, China’s leading second-generation online watchmaker, the number of high-end models has increased dramatically in recent years. Popular brands such as Rolex Submariners can now order five times their original price.
“Prices are unlikely to fall in the future,” said David Wang, a top watchmaker in Shanghai.
The third driver of high-end watches is their move, which provides an easy way for wealthy citizens to move goods abroad if needed. Wang said some of his clients had spent thousands of dollars on clocks in order to escape the cost of sending $ 50,000 a year for shipping.
“Customs officials may not see your watch or know the amount,” Wang said. “This creates a safer and more efficient way to get your money out.”
Additional reports by Xinning Liu in Beijing and Tom Mitchell in Singapore
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