If you thought luxury timepieces have had their day, think again. The watch you wear says a lot about you.
There was a time when Taiwan was famed for producing fake Rolex watches. They were so good it was hard to tell them apart from the real thing – though being sold in a night market might have been a bit of a giveaway.
The story goes that the Swiss watchmaker was so impressed by the replica versions made here that it sent representatives to find out how Taiwan manufacturers managed to build such quality timepieces at such a low cost. While the story may be apocryphal, it does illustrate the fact that Taiwan has moved up the value chain and has become more of a guarantor of quality than a producer of fakes. That dubious honor now resides in China.
High-end watches, by their very nature, are all about precision and quality. There is a timeless appeal about knowing that this watch will not let you down – and on the rare occasion it does, any respectable watchmaker or brand will stop at nothing to repair it for you.
At the Taipei 101 Mall, watches make up about 13% of total sales. Not bad for an item that has little practical function in an age when the correct time is ever present, updated by cellphone towers and synced with data networks. Not bad when the most interesting watches are arguably mini-computers gauging your body fat and determining how many steps you have walked in a day.
But there’s more to watches than telling the time. There’s the look, the investment angle, and – even more importantly – their value as status symbols. “What better way to declare your success than with a classy timepiece on your wrist?” says watch expert and auctioneer George Schooling. “High-end watches, by their very nature, are all about precision and quality. There is a timeless appeal about knowing that this watch will not let you down – and on the rare occasion it does, any respectable watchmaker or brand will stop at nothing to repair it for you. It is worth remembering the kind of people who buy these luxury watches tend to be high achieving, precise people themselves,” Schooling opines.
The most popular luxury watch in Taiwan has been and still is Rolex, with a market value of 11% in 2012 that makes it the only brand to be in double digits.
“Brand is also important. A Burberry or a Calvin Klein watch is much more likely to depreciate. Stick to the known watchmakers such as Cartier, Omega, and Rolex – unless the watch is so outrageous that the price can only go up, as with the Chanel J12 Tourbillon High Jewelry. Encrusted with white gold and diamonds and containing a fine movement, it has everything. Even with its US$1.27 million price tag, it can only appreciate in value.”
The most popular luxury watch in Taiwan has been and still is Rolex, which local collectors take a shine to because of its history, stretching back to London in 1905, its reliability, and sell-on value. It had a market value share of 11% in 2012, according to the most recent Euromonitor report, the only brand to be in double digits.
While Taiwanese previously tended to buy their watches abroad for reasons of price and authenticity, nowadays they need travel no further than Taipei 101 Mall, or a plethora of other retail outlets in the country’s major cities. International standard after-sales services are also now available locally.
Prices in Taiwan for timepieces are reportedly 20-30% less than on the mainland, plus visitors qualify for a refund on the 5% Value Added Tax. Wealthy visitors may buy products costing in the tens or even hundreds of thousands of U.S. dollars.
Still, Chinese tourists account for the bulk of the business. Prices in Taiwan for timepieces are reportedly 20-30% less than on the mainland, plus visitors qualify for a refund on the 5% Value Added Tax. Wealthy visitors may buy products costing in the tens or even hundreds of thousands of U.S. dollars.
“Serious collectors have to come here,” says David Tao, Taipei 101’s director of mall operation, since Taiwan is one of the world’s top five markets for watch collectors. As for 101, it boasts impressive outlets from most of the world’s best watchmakers. Patek Philippe, for instance, has set up its biggest flagship store worldwide in the mall and – most significantly – will earmark at least 1% of its production of limited edition watches, which works out to about 450 timepieces, for the store.
Limited editions nearly always represent a safe bet against inflation because they have scarcity value. But there are other forces in play if you’re collecting as an investment, says Schooling: “The right kind of watch will go up in value, or at the very least, retain its value. People do buy them for investment and have done well, but it does not apply to all of them.
“Diamonds and precious metals all help but they do need to be combined with a ‘limited’ release. Essentially, market forces operate here – so the more demand there is and the fewer editions there are, the higher the likelihood the watch will go up in value.”
“I think there is a strand of watches that will always do well, and those are ones with the highest quality movements within the watch,” Schooling continues. “The tourbillon watches have always been popular and continue to be associated with exclusivity and luxury.”
Aficionados are a demanding lot and don’t want just a pretty face to sell them a watch. Rather, they want someone who is knowledgeable about the technical details and mechanical movements to explain the potential purchase’s selling points. Hence, good service is crucial.
“For a serious watch lover, specialist stores are always the best places. They will tend to have people who can advise you – albeit a little biased – but part of the appeal of the luxury watch brands is client service, so they will serve your interest as well as theirs. Duty-free is great for a lower-end luxury watch, if you don’t really care about investment value.”
This is part of a 6-part feature story on luxury goods in Taiwan:
Aiming to be Asia’s Luxury Shopping Destination
From Bags to Riches
The Jewelry in Taiwan’s Crown
Luxury Watches: More Than Just Telling the Time
Upgrading to First-Class
Chinese Aesthetic with a Contemporary Style