The Present and Future of Luxury Watches, According to Patek Phillippe
Luxury watch sales are showing resilience despite the pandemic. Since October 2020, exports of Swiss watches costing over 3,000 CHF (~20,000 yuan) have been essentially back to pre-pandemic levels, according to data from the Federation of the Swiss Watch Industry. With a clientele of royalty, dignitaries, and business leaders all over the world, Patek Philippe sat firmly in their position at the top of the luxury watch market through the pandemic, just like how it lived through previous financial crisis with ingenuity and innovations.
As the most luxurious of all luxury watches, Patek Philippe produced the world’s most expensive watch ever sold at auction. The Grandmaster Chime Ref. 6300A-010 fetched over 31 million CHF at Only Watch on November 9, 2019. Since production is limited to around 60,000 pieces annually in order to maintain quality and prestige, getting hands on some of the popular models require years of waiting.
In 2020, Patek Philippe gained market share, according to a report by Morgan Stanley and watch industry expert LuxeConsult. It is now ranked fourth in sales for Swiss watches.
Balancing innovation and tradition
Patek Philippe’s long tradition can be traced back to 1839, but it also has a strong culture of innovation which has fostered a stream of technology and products. Over the past hundred years, Patek Philippe accumulated over one hundred patents. On April 12th, a new Perpetual Calendar with a patented mechanism, Ref. 5236P, was launched.
Patek Phillippe REF.5236P
There is a constant need for new models and movements. In 2020, Patek Philippe announced that it will discontinue one of the most in demand watches in the world, the Nautilus Ref. 5711. “We cannot put a single watch on top of our pyramid,” Thierry Stern, President of Patek Philippe, told the New York Times. The olive green Nautilus Ref. 5711/1A announced on April 7th will be the final of the series.
Patek Phillippe Ref. 5711
With enough good ideas in movement and design, there will be no need for gimmicks, Stern believes. Recently, the iconic Calatrava with the “Clous de Paris” bezel made strong comeback with a contemporary design and a new manually wound movement.
Forging relationships with clients
Unlike other brands that sold a lot to tourists, Patek Philippe has told retailers to focus on the local clientele since a few years ago. It does not mean they are not willing to sell to tourists, but retailers built a client base who shopped for Christmas, graduations, birthdays and other major occasions. With a limited production capacity, the decision to target local elite was a logical one, according to Stern.
This strategy kept sales strong even when stores were closed during the pandemic. Retailers have been calling clients and bringing the watches to their home or clients can pick up the watches at the store. This way, clients can still get tailored advice and physical experience of the product. Even if the pandemic continues, this strategy will keep sales volume up for a while, Stern believes. A prestigious brand like Patek Philippe simply cannot rely on online sales.
Patek Phillippe REF.6119R
Sale numbers in China is growing but with its total production capacity limited, the challenge is meeting demand. Deciding to only slowly increasing production each year by 1-3 percent to preserve quality, growth in demand outpaces supply. To be fair to all countries, the quantity must be distributed across the world.
China will be definitely one of the most important markets in those next years, Stern said. Younger Chinese clients who are passionate about collecting and wearing watches are particularly important, as Patek Philippe eyes brand expansion in the future.
Patek Philippe will bring major events coming to china to propose and to show products as soon as international travel resumes.
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