Luxury consumers in China seem unfazed by the recent global downturn. A study just released by KPMG reported that 62 percent maintained their spending on expensive goods in 2009 and 2010. Brand loyalty remains strong as many chose to stick with existing brands rather than downgrading to less prestigious ones.
According to Stephen Urquhart, president of Omega, the Swiss watchmaker, “There wasn’t much of a financial crisis here in China.” Demand for watches is surging in China. About 25 percent of all Internet searches for brands last year were for Swatch Group’s Omega while Rolex had 18 percent based on a report by research firm IC- Agency, which publishes the World Watch Report.
China accounted for 28 percent of 2009 sales for Swatch Group, which owns the Swatch, Omega, Breguet, Longines, and Blancpain brands. Its China retail partner, Hengdeli Holdings expects 2010 sales to be the fastest in three years. “Exports of timepieces from the European nation to China in March increased 90 percent to 77.9 million Swiss francs in March. Shipments to Hong Kong, where many retailers say most of their sales are to mainland Chinese, jumped 68 percent to 235.5 million Swiss francs. The city is the biggest market for Swiss watchmakers,” according to Bloomberg Businessweek. Many wealthy Chinese buy their watches in Hong Kong to avoid China’s luxury taxes.
China’s love affair with Swiss watches is going strong.
photo credit: omega