HK dominates luxury watch market

Hong Kong's position as the leading market for luxury watches is steadfast, even in times of economic hardship. According to the Federation of the Swiss Watch Industry, Hong Kong imported Swiss watches worth US$2.2 billion last year. That figure was down by more than 19 per cent from the previous year, but Hong Kong remained the biggest market worldwide for luxury - read Swiss - watches.

The city's imports from the global market were US$5.1 billion, compared with US$3.1 billion by the second-largest importer, the United States.

Hong Kong's location as a gateway to the mainland puts it in a strong position globally. According to the Asia-Pacific Wealth Report (2010) by Merrill Lynch Wealth Management and Capgemini, the mainland is second only to Japan in Asia in its number of high-net-worth individuals. The number rose 31 per cent from the previous year to a combined wealth of US$2.3 trillion.

Watch brands generally agree that the influx of mainland visitors to Hong Kong is the driving force behind its position as the leading market. Prices in Hong Kong are more competitive than those on the mainland, the choices are greater and the level of service is high.

Watch brands and retailers are targeting these customers and, for a significant number, they generate sales. 'Retailers work with watch groups and transform their outlets in shop-in-shop design, which is brand-orientated. Some of the watch groups even invest in retailers,' says Andy Chan, general manager at Breitling (Hong Kong).

The influence of mainland consumers is reflected in the number of luxury brands opening standalone boutiques instead of the more traditional shop-in-shop format. This trend kicked in a year ago when the former police headquarters in Tsim Sha Tsui reopened as a luxury shopping destination and hotel, 1881 Heritage.