The luxury watch market is anticipated to grow at a CAGR of 1.61%, USD 2.91 billion by 2027. Some major vendors gracing the list include Patek Philippe SA, Rolex SA, Breitling SA, the Swatch Group Ltd, Le petit fils de L.U. Chopard, Burberry Group Plc, Seiko Holdings Corp, among many others. The significant cause of this growing inclination is credited to the adults who use luxury watches as a sign of status.
Market Dynamics: Main Factors Boosting The Growth Of The Luxury Watch Industry
The growth of the luxury watch market from 2022 to 2027 depends on the following:
- Innovative product design
- Branding Strategies & Brand Positioning
- Fashion Trends
- Watches have now become fashion accessories due to changes in consumption patterns and customer attitudes.
- Watch manufacturers now offer various options to all consumer demographics by regularly updating their product lines as per the demand. They include precious elements like diamonds, gold, sapphire, ruby and others to fuel the growth-driving factor.
Major Emerging Trends
- An emerging trend in the luxury watch industry is the popularity of customised luxury watches. Many renowned luxury watch brands now offer customised watches, which entails changing the dial, bezel, and bands. For instance, Rolex offers the option to change the dial, strap and colour of watches.
- Customisation elevates the prices of the timepieces, which drives the growth of the global watch market.
- Companies are producing limited edition watches with unique designs and features to increase revenue.
- The fashion-conscious and young consumers are the main target during the forecast period, which is likely to increase the global market growth.
- A major obstacle in the coming times is the decline in the profit margin of the retailers and vendors. This is due to the high cost of raw materials and immense vendor competition.
- The widespread availability of counterfeit products is another reason why there is a decline in vendor’s profit margins.
- To gain an advantage over their competitors, retailers try to stock luxury watches, involving high inventory costs.
- The increasing value of the Swiss franc, the unstable market conditions and the drop in oil prices all impact the sales of luxury watches.
Which Are The Key Areas Of Target For The Luxury Watch Market?
Europe accounts for 27% of the global market growth throughout the forecast period. With its elongated history of watchmaking and reputation for producing high-quality timepieces, the European market plays a significant role in the luxury watch fraternity. Furthermore, the introduction of new items and design innovations will support this extension. Moreover, brands are no longer targeting the wealthy alone but also the middle section of the population.
Which Is The Fastest Growing Segment In The Luxury Watch Industry?
According to The Luxury Hut, the men’s segment will see the maximum growth in the upcoming years. Brands launching new products will act as one of the main drivers of this end-user segment. Additionally, as mentioned before, the customistaion and personalisation of the products will fuel this expansion.
Producers are trying to lure this specific segment of society with affordable luxury watches. Some vendors are also trying to release new models of iconic watches for men. For instance, in January 2023, Tag Heuer announced the release of the 60th Anniversary Edition Tag Heuer Carrera Chronograph. Many such product launches are anticipated during the forecast period.
Insights On Distribution Channels
While there are two major distribution channels-online and offline, the online segment is projected to expand at an exponential rate from 2023 to 2030 at a CAGR of above 5.5%. The key market players, including Rolex, are adopting online retail schemes to increase profit margins and cut operational costs. Moreover, it is also convenient for watch manufacturers to sell the watches at a global level through the online distribution channel.
The offline segment that dominated the scene in 2021 will also remain significant throughout the forecast tenure. This is because a major part of the consumer base prefers purchasing high-end luxury watches from retail stores as it is easier to understand the exact weight and size from offline platforms like stores, brand-owned retail outlets, etc.
The predicted growth of the luxury watch market by 2027 highlights the enduring appeal of luxury watches. As consumers continue to appreciate the blend of artistry, innovation, and heritage offered by luxury timepieces, investing in themnot only reflects a sense of refined taste but also holds the promise of enduring value. This is one of those times when investing in a fine luxury watch might be the best thing ever! As the prices continue to skyrocket, you can sell watches at an insane value later.