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China’s Watch Shoppers: Consumer Behaviour podcast

According to the latest HKTDC survey [1], mainland middle-class consumers have, on average, three watches and would “wear different types of watches for different occasions”. Both casual/fashion watches and smart watches are popular with consumers. As their spending power rises, 59% of the respondents said they have bought watches on impulse and, in that group, casual/fashion watches make up the highest proportion of such purchases. In this article, analysis is focused on the watch purchase behaviour of mainland consumers, including the types and prices of watches they currently own, the types and prices of watches they have bought on impulse, as well as the types of watches they want to buy next time and the budget they will set aside for that purpose.

The Average Respondent Has Three Watches

The survey reveals that on average each respondent currently has three watches. From this, it can be seen that mainland middle-class consumers are progressing from the stage of “having one watch for all occasions and for matching different clothes” in the past to “wearing different types of watches for different occasions”, and this should further drive watch sales.

When it comes to types of watches, the majority of respondents, irrespective of gender, have casual/fashion watches. It is worth noting that the average price of smart watches owned by female respondents (RMB5,025) is higher than the average price for male respondents (RMB4,026). While the proportion of female respondents who have jewellery watches is higher than for male respondents, the average price of those watches is lower than that of the jewellery watches owned by male respondents.

 

Table: Types of Watches Owned by Middle-class Consumers
Table: Types of Watches Owned by Middle-class Consumers

 

The higher the monthly household income of respondents, the higher was the average number of watches they had. The survey reveals that, for respondents with monthly household income of less than RMB10,000, the average number of watches owned was 2.78, while for respondents with monthly household incomes of more than RMB40,000, the average number of watches owned was 3.64. Meanwhile, for respondents with monthly household incomes of more than RMB40,000, the proportion owning jewellery watches (49%) was significantly higher than that for all respondents (27%). As mentioned previously, the proportion of this group of respondents buying watches as for investment purposes (17%) was also higher than that for all respondents (6%).

 

Table: Types of Watches Owned by Middle-class Consumers
Table: Types of Watches Owned by Middle-class Consumers

 

There were minor differences in the types of watches owned by respondents from different cities. For example, the proportion of respondents from Beijing owning sports watches (58%) was higher than that from other cities. The average number of watches owned by respondents from Beijing (3.28), Guangzhou (3.33) and Wuhan (3.17) was higher than the overall average (3.11).

 

Table: Types of Watches Owned by Middle-class Consumers
Table: Types of Watches Owned by Middle-class Consumers

 

For all types of watches, the average prices of those owned by Shanghai respondents were higher than those for all respondents taken together. In terms of watch types, the average prices of sports watches, casual/fashion watches, business watches and smart watches owned by Shanghai respondents were higher than all other cities. However, the average price of jewellery watches owned by respondents was highest in Beijing.

 

Table: Average Prices of Different Types of Watches Owned by Middle-class Consumers
Table: Average Prices of Different Types of Watches Owned by Middle-class Consumers

 

Women More Likely to Make Impulse Buys Than Men

As the spending power of mainland consumers increases, 59% of the respondents said they had made impulse purchases after coming across a watch they liked. The average amount spent on an impulse buy was RMB5,756. Among all respondents, 63% of women said they had bought watches on impulse, somewhat higher than the proportion of men (56%) having done so. Nevertheless, the average amount spent by female respondents on an impulse buy (RMB5,678) was slightly lower than that of male respondents (RMB5,868). In terms of different cities, the proportion of respondents who had bought a watch on impulse was highest in Guangzhou (64%) and Harbin (64%) and lowest in Chengdu (53%). Price-wise, the average amount was highest for Beijing respondents (RMB6,251) and lowest among their Chengdu counterparts (RMB4,742).

 

Table: Proportion of Respondents Who Have Bought Watches on Impulse and Amount Spent
Table: Proportion of Respondents Who Have Bought Watches on Impulse and Amount Spent

 

It is worth noting that the proportion of respondents who had bought watches on impulse and the average amounts they spent doing so did not increase with increasing monthly household income. For respondents with monthly household incomes in the RMB12,000-20,000 range, the proportion who had bought watches on impulse was only 56% and their average spend was only RMB4,278. A higher proportion (62%) of respondents in the monthly household income bracket of RMB10,000-12,000, said they had bought a watch on impulse, spending an average amount of RMB5,192. This shows that there is no correlation between household income and buying watches on impulse.

 

Table: Proportion of Respondents Who Have Bought Watches on Impulse and Amount Spent
Table: Proportion of Respondents Who Have Bought Watches on Impulse and Amount Spent

 

Among respondents who have bought watches on impulse, more than half chose to buy casual/fashion watches, probably because such watches are easier to match with clothes and suitable for wearing on different occasions. It could also be that prices for casual/fashion watches are more in-keeping with impulse buying budgets. The survey shows that, among respondents who have bought watches on impulse, only 11% chose to buy jewellery watches. This is the case probably because jewellery watches are more expensive and most consumers would have to consider carefully before making purchases of that magnitude.

 

Table: Types of Watches Bought on Impulse
Table: Types of Watches Bought on Impulse

 

Types of Movements of Watches Bought on Impulse

The survey reveals that, among respondents who had bought watches on impulse, 57% said they had bought mechanical watches, followed by quartz/electronic watches (40%) and smart watches (33%).

 

Table: Types of Movements of Watches Bought on Impulse (by City)
Table: Types of Movements of Watches Bought on Impulse (by City)

 

Among respondents with monthly household incomes in the RMB20,000-40,000 range who had also bought watches on impulse, 64% chose to buy watches with mechanical movements, a significantly higher proportion than for other monthly household income groups. Among respondents with monthly household income of more than RMB40,000 who had bought watches on impulse, 45% said the watches they had bought in this way were smart watches. This was a significantly higher proportion than among impulse buyers in other monthly household income groups.

 

Table: Types of Movements of Watches Bought on Impulse
Table: Types of Movements of Watches Bought on Impulse

 

Casual/Fashion Watches Most Likely To Be Next Purchase

The proportion of respondents (30%) saying their next watch purchase would likely be a casual/fashion watch was highest, and highest of all in Chengdu (40%). The second preference was for a smart watch, with 27% of all respondents planning to buy one the next time they make a purchase, including 33% (the highest of all cities) in Wuxi. In other words, most respondents said they would buy either a casual/fashion watch or smart watch next time. Respondents from Shanghai, however, said they would buy either a business watch (32%) or a casual/fashion watch (30%); while respondents from Wuxi said they would buy either a smart watch (33%) or a business watch (29%). For all respondents, the average budget for the next watch purchase was RMB6,873.

 

Table: Types of Watch to Buy Next Time
Table: Types of Watch to Buy Next Time

 

In terms of income, respondents with monthly household incomes of less than RMB20,000 said they would likely make a casual/fashion watch or smart watch their next purchase. Meanwhile, those with a monthly household income in the RMB20,000-40,000 bracket said they would likely buy a casual/fashion watch or business watch next, and those with a monthly household income of more than RMB40,000 intended to buy a smart watch or business watch.

 

Table: Types of Watch to Buy Next Time
Table: Types of Watch to Buy Next Time

 

In terms of gender, a higher proportion of male respondents said they would buy a smart watch or business watch the next time they make a purchase, compared to female respondents who said they were more likely to buy a casual/fashion watch or smart watch.

 

Table: Type of Watch to Buy Next Time and Average Budget
Table: Type of Watch to Buy Next Time and Average Budget

 

Conclusion

On average, mainland middle-class consumers today have three watches. They have progressed from “having one watch for all occasions and for matching different clothes” in the past to “wearing different types of watches for different occasions”. In general, casual/fashion watches are the most popular. This is borne out by the fact that currently most respondents owned casual/fashion watches and that among respondents who had bought watches on impulse, the proportion choosing a casual/fashion watch while doing so was also highest. It is also supported by the proportion who said they planned to make a casual/fashion watch their next purchase. Meanwhile, as 27% of all respondents said they were planning to buy a smart watch next time and more than half already own one, the smart watch craze looks set to continue.

 

Appendix:

Table: Focus Group Discussions
Table: Focus Group Discussions

 

Table: Online Questionnaire Survey
Table: Online Questionnaire Survey

 

Table: Average Monthly Household Income of Respondents
Table: Average Monthly Household Income of Respondents

 


[1]  HKTDC Research conducted a survey of mainland watch consumers through a series of focus group discussions and an online questionnaire survey from February to May 2016 (see Appendix for details).

Content provided by Picture: Alice Tsang
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