|The third chapter in our Beijing Fashionista trilogy centers on timepieces. It is something not everyone gets as to why one needs an expensive watch when most of them at any price range keep adequate time. Moreover, how important is it that the time be that precise after all? Therefore, you would have to presuppose an expensive timepiece is needed to set yourself apart from the common riff-raff. These issues present a complex conundrum to the wealthy young Chinese trying to evidence pride in the “coolness” of modern China but not being able to fully showcase their level of wealth.
Recently, the FT published an article entitled China’s Young Luxury Consumers Warm to Home Grown Brands with a subtitle National Pride is Changing Attitudes, but Chinese Watchmakers Lack the Marketing to Compete with Global Rivals. You should remember the FT publishes a supplement named How to Spend It. If you are in a high-end, consumer-oriented business, and your product finds its way into that publication, you have made it! As an aside, millennial Chinese account for two-thirds of all luxury spending in China.
Watch enthusiast, Li Yanzhe, is one of 400 million Chinese millennials that will become a dominant force of Chinese luxury spending. Despite Li Yanzhe’s pride in the local brands of China’s products, he is reluctant to divert his $15,000 annual watch budget to local brands. Sit back and reflect on that comment a moment in so many different dimensions. Apparently, he struggles to connect with local watch brands. Perhaps people wear expensive watches not because of their mechanical time-keeping capability, but because everyone knows they are expensive. Moreover, China’s retail market for watches grew to $11.4 billion in 2018.
Accordingly, as it is a big business, how do the Chinese watchmakers crack it? Many say that the Chinese can make quality watches but lack the marketing capability to propel them into the higher end of the market. Not surprisingly, Swiss brands dominate China’s high-end timepiece market. The remainder of the lower-end market is left to the rest of the world. However, China is attempting to shift the market in its 13th five-year plan to move Chinese watches out of the low-end brand category. What does it take to make a premium watch?
There are several Chinese brands in the $200 to $500 price range, one of which is shown below.
These watches compete with the Japanese Seiko, Citizen and Casio brands, all of which have hip and cool looking watches. Therefore, maybe the answer to why Chinese watches cannot compete with the higher-end foreign brands is that they look like a bad dream. It is not the marketing but the design and appearance.
At the end of the day, it is design and taste whether it be clothing, watches or automobiles that make a product appealing. It is one thing for low-cost labor to crank out manufactured items at a cost far below what the rest of the world can do. International concerns have their products made in China for that very cost reason. However, it is another matter to design something appealing to attract others to identify with it and want to have it. The product might perform the task but the design must make it appealing.
If you or your ancestors only had Mao suits as a clothing option, you had no idea of freedom of choice or any other option. Therefore, perhaps design taste is a freedom that has yet to find its way into the Chinese culture since the time of a suppressive state. For a country that contributed so much to mankind, it has been lacking in cultural contributions since the Ming Dynasty which was a long time ago. Chairman Mao sort of forced everyone into the same mold so there was little freedom of choice or selection. Sadly, there is nothing on the horizon there that would suggest a change.