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China’s Watch Shoppers (Summary)

In China, the ranks of middle-class consumers are multiplying. As a group, these consumers pursue tasteful living and personal styles and are more willing to spend on personal items like mid- to high-end watches. Mainland consumers’ primary considerations for having a watch have already shifted from durability and price in the past to fashionable design and style. According to Euromonitor International, from 2016 to 2020, retail sales of watches in the mainland are projected to grow at an average annual rate of 6.4%. It is expected that, by 2020, the mainland’s retail sales of watches will reach RMB85.5 billion, thus promising a good prospect for the mainland watch market.

In order to assess the latest development of the watch market in the Chinese mainland, HKTDC Research conducted a survey of watch consumers from February to May 2016 through a series of focus group discussions and an online questionnaire survey (please refer to Appendix for details). The survey investigated in detail the consumption attitudes, preferences, buying considerations and shopping channels of mainland consumers.

A Perfect Accessory to Express Individuality

In recent years, as smartphones are getting increasingly popular, some of the younger generation are using their smartphones to tell time, yet the majority of the working population would still wear a watch to work. Watches can be used not only for time-telling but also for expressing one’s individuality and serving as a status symbol. According to respondents in the focus group discussions: “Watches should be worn on business occasions to show off one’s maturity and steadiness.” It is worth noting that 50% of the male respondents said they wear watches because they like watches, and there is no significant difference between young respondents (aged 18-35) and the more mature group (aged 36-55). Whereas for female respondents, the main reason for wearing a watch is that it is a perfect accessory (55%), with the proportion of more mature respondents (57%) markedly higher than that of the younger group (52%).

 

Chart: Mainland Consumers’ Reasons for Wearing Watches
Chart: Mainland Consumers’ Reasons for Wearing Watches

 

Buying Watches to Reward Oneself

The survey shows that, irrespective of gender, city of residence or household income, all respondents agree that “reward oneself/make oneself happy” is the top reason for buying watches. A respondent in one of the focus groups said: “I’d buy a watch to reward myself so that I’ll have the impetus to keep on going.” The survey reveals that, among all cities studied, Guangzhou has the highest proportion of respondents (64%) buying watches to “reward oneself/make oneself happy”. The proportion of respondents buying watches as a kind of investment to hedge against inflation was higher than the average (6%) in Beijing (9%), Shanghai (16%) and Guangzhou (8%).

 

Table: Mainland Consumers’ Reasons for Buying Watches
Table: Mainland Consumers’ Reasons for Buying Watches

 

Average Mainland Consumer Has Three Watches

As mainland middle-class consumers would wear different types of watches for different occasions, or would match different clothes with different watches, quite a number of them have watches of different types and different styles. The survey reveals that on average each respondent has three watches, which are mainly of the casual/fashion type and business type. The higher the monthly household income of the group of respondents, the higher the proportion who has jewellery watches. Thus, for respondents with monthly household income of RMB40,000 or more, 49% said they have jewellery watches; for those with monthly household income of less than RMB10,000, only 22% said they have jewellery watches.

 

Table: Average Watch Ownership of Mainland Middle-Class Consumers
Table: Average Watch Ownership of Mainland Middle-Class Consumers

 

Considerations in Buying Watches

In buying new watches, price is not a primary consideration for mainland consumers. For both male and female respondents, brand and style/design are the most important considerations. Among male respondents, the more mature respondents are more concerned than their younger peers about brand reputation, watch craftsmanship/technology and place of origin of the brand. Among female respondents, the more mature respondents are more concerned than their younger peers about craftsmanship, place of origin of the brand and the manufacturing location.

 

Chart: Considerations in Buying Watches
Chart: Considerations in Buying Watches

 

Burgeoning Online Shopping Market

Though the mainland online shopping market is growing explosively, consumers still prefer to buy watches through physical channels. So channels for online shopping of watches have yet to take off. Among all respondents, 84% indicated they buy watches in physical stores mainly for the following three reasons: genuine products guaranteed (65%), trying on in person (64%) and after-sales service guaranteed (56%). Yet in the current survey, some of the respondents said they are willing to try shopping for watches online. Of the respondents who buy watches via physical channels, 79% indicated that “If I come across a watch to my liking, I will shop online” and the price range they are willing to pay is RMB4,000-6,999. Only 21% of the respondents said: “I have reservation about buying watches online and may not give it a try”. Of respondents who have shopped watches online, their main reasons are: more choices in brand/style (50%), low prices (48%) and convenient/delivery available (44%).

Type of Watch to Buy Next Time

One question asked in the survey was: “What type of watch would you most likely buy the next time?” Most male respondents said they would buy a business watch (30%) or smart watch (30%) next time. Most female respondents said they would buy a casual/fashion watch (34%) next time, followed by smart watch (25%). The survey shows that, overall, 27% of the respondents indicate that they would buy a smart watch next time, whereas at present, 55% of all respondents already own a smart watch. From this, it can be deduced that the popularity of smart watch will further increase.

 

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

 

Impression of Hong Kong Watch Brands

The majority of respondents agreed that Hong Kong is a fashion capital where global watch brands are clustered. They reckoned that Hong Kong branded watches, because of their exquisiteness in watch face design, diversity in watch strap mix-and-match and distinctiveness in design and style, make a perfect accessory for any occasion. Nevertheless, because there are few watch brands with heritage in Hong Kong, when they shop for watches they would not specifically look for Hong Kong branded ones.

 

Chart: Impression of Hong Kong Watch Brands
Chart: Impression of Hong Kong Watch Brands

 

Tips for Entering Mainland Market

Mainland consumers seek watches that are fashionable in design and distinctive in style so as to express their individuality. As Hong Kong watches are trendy in style and make a perfect accessory for any occasion, there are definite potentials to be tapped in the mainland for watches designed in Hong Kong. Meanwhile, as more and more mainland consumers are interested in buying watches through online platforms, so other than selling from physical stores, companies should not ignore the prospect of the online market. Of course, good warranty and after-sales services are also key aspects for tapping the mainland watch market.

 

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
Content provided by Picture: Alice Tsang
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