Don't blame Asia you say?

[glamorama]

Yes I know we are all tired of investment and price threads, and this is one of those so you might as well stop reading now.

The Federation of the Swiss Watch Industry released their May report. Export to China is up by 81% YoY in May. This does not include the export to China where they basically vacuum any watches they see as tourists in Europe and other places.

There is a bunch of other interesting facts to be read on that website, for example PM and TT is up by 20% and SS down 12% in number of units exported.

Source: https://www.fhs.swiss/eng/statistics.html
Screenshot 2019-06-20 at 11.30.35.png

[watchmaker]

The word 'blame' suggests there is a problem.

The availability, or lack thereof of a luxury product can never be described as a problem in my view. It is by definition a nice to have thing that we do not need.

[mackychase]

Originally Posted by watchmaker

The word 'blame' suggests there is a problem.

The availability, or lack thereof of a luxury product can never be described as a problem in my view. It is by definition a nice to have thing that we do not need.

Agreed

It's all a matter of perception.

The way I'm looking at it, it's not surprising to see China's Swiss watch volume to grow year-on-year because it's a rapid growing economy. The Chinese are the world's largest consumer of luxury goods according to a McKinsey report (among others) aaand it's projected to grow steadily in the next five years.

The Swiss watch industry is a business, after all, therefore it is just natural that more products are shipped in that direction.

Not to mention Asia's 4.5 billion population dwarfs (by comparison) North America's 579 million. Considering, for instance 5% of each of those population will buy Swiss watches, where would you naturally export most of your products?

[uniqueMR]

Thanks for sharing.

[Armaniwatches]

Hmmm not bad IMO. Thank you for the info.

[mikkolopez]

That really is the way the fortune cookie crumbles.


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[playford]

It's following a global economy and a cashed up new Chinese middle class who want luxury goods. I'd put money on the same figures for anything from designer handbags to six figure cars.

[Crazy Lugs]

Originally Posted by playford

It's following a global economy and a cashed up new Chinese middle class who want luxury goods. I'd put money on the same figures for anything from designer handbags to six figure cars.

I keep hearing about these newly minted “cashed up” Chinese folks who had nothing and are suddenly loaded and ready to spend massive amounts on a whim.

Where’d all this free money come from? The sky? The communist government? I’ve had to work my ass off for even a modest slice of the pie- maybe I should move to China?

[ninjin]

Originally Posted by Crazy Lugs

I keep hearing about these newly minted “cashed up” Chinese folks who had nothing and are suddenly loaded and ready to spend massive amounts on a whim.

Where’d all this free money come from? The sky? The communist government? I’ve had to work my ass off for even a modest slice of the pie- maybe I should move to China?

As the years have passed in China, the wealth of its people slowly has increased. Due to the population size, even a minute percentage of the population becoming middle class makes for a huge number of actual people.

Now where has the wealth come from. At grass roots level, mainly 2 ways:

1. Government statutory purchase of rural land. Government buys up private land, for redevelopment. Owners get monetry compensation for the land purchase and also get given new land in a different area of the same size. So they end up with what they started with but also a large chunk of money.

2. The rural population of subsistence farming areas migrating to cities to find work at factories and services. To the majority of us who debate the Rolex procurement issue, these maybe low end jobs but it's still a galaxy away to them from farming at home.

By migrating to the city, many have worked hard and (with some luck on their side) into middle class.

As before, it's all to do with percentages. China's population is just huge.

[Terrakot]

Originally Posted by ninjin

As the years have passed in China, the wealth of its people slowly has increased. Due to the population size, even a minute percentage of the population becoming middle class makes for a huge number of actual people.

Now where has the wealth come from. At grass roots level, mainly 2 ways:

1. Government statutory purchase of rural land. Government buys up private land, for redevelopment. Owners get monetry compensation for the land purchase and also get given new land in a different area of the same size. So they end up with what they started with but also a large chunk of money.

2. The rural population of subsistence farming areas migrating to cities to find work at factories and services. To the majority of us who debate the Rolex procurement issue, these maybe low end jobs but it's still a galaxy away to them from farming at home.

By migrating to the city, many have worked hard and (with some luck on their side) into middle class.

As before, it's all to do with percentages. China's population is just huge.

The wealth come from USA, period. Thank to all this Chinese cheap junk on the shelfs and catalogues of Walmart and Amazon

[glamorama]

Originally Posted by Terrakot

The wealth come from USA, period. Thank to all this Chinese cheap junk on the shelfs and catalogues of Walmart and Amazon

This is quite a simplification. Perhaps this is how it started but now they create their own wealth too.

[Andad]

Originally Posted by Terrakot

The wealth come from USA, period. Thank to all this Chinese cheap junk on the shelfs and catalogues of Walmart and Amazon

[cloudplay]

Originally Posted by Crazy Lugs

I keep hearing about these newly minted “cashed up” Chinese folks who had nothing and are suddenly loaded and ready to spend massive amounts on a whim.

Where’d all this free money come from? The sky? The communist government? I’ve had to work my ass off for even a modest slice of the pie- maybe I should move to China?

The Rolex-buying Chinese "middle class" people like to reference are really the top couple of % in terms of income. A few years ago, $100k USD/year was enough to get one in the top 1% of the Chinese income distribution. But even 1% of the population are 14 million people.

People with an actual middle class income in China, e.g., a couple of 1000 USD/month in an expensive city, are not flying to London vacuuming up luxury goods. They may however still be working "996" - 9AM-9PM, 6 days a week.

[omx5o]

Looks like demand is up then.

[Fat_ninja]

Ghina

[Muxi]

Blame sounds a bit harsh.

[BLNR Nairobi]

Nice data

[teck21]

And even when they aren’t being actually exported to China, so much of what goes to every other market finds its way to China anyway.


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[glamorama]

Seems like some people take offence with the word 'blame', please just don't there is nothing there, just read it as "Increased demand in Asia" instead.

This forum is quite anglo-focused naturally and not everyone is aware that the economic powers have shifted from US/EU to the East or at least the scale and the volatility in demand it can create.

I'm simply stating the fact that DEMAND is UP, however there seems to be some truth to the other argument that SUPPLY IS DOWN, which it is for SS pieces but not PM.

Again this is overall industry statistics not just Rolex and it is on monthly basis which might vary a lot depending on holidays and length of month etc.

[1William]

Interesting Data. I would like to see the numbers broken out across the board for brands and how the other luxury items are selling. Women's purses, shoes etc. Thanks for the information.

[brandrea]

Interesting information. On the other end of the spectrum there’s Italy... is the economy struggling there? We just came back from vacation there and things looked vibrant from an outsiders perspective...

[omx5o]

Originally Posted by brandrea

Interesting information. On the other end of the spectrum there’s Italy... is the economy struggling there? We just came back from vacation there and things looked vibrant from an outsiders perspective...

I might be wrong but the national debt there is 143% of GDP. I guess if you borrow enough money you can party like there's no tomorrow.

[desertwanderer]

Originally Posted by omx5o

I might be wrong but the national debt there is 143% of GDP. I guess if you borrow enough money you can party like there's no tomorrow.

Close - 131%, although US is running at 105% on last published figures.

[glamorama]

Originally Posted by brandrea

Interesting information. On the other end of the spectrum there’s Italy... is the economy struggling there? We just came back from vacation there and things looked vibrant from an outsiders perspective...

Originally Posted by omx5o

I might be wrong but the national debt there is 143% of GDP. I guess if you borrow enough money you can party like there's no tomorrow.

Italian economy is not good and has not been good since the financial crisis. I think people in the north are doing well mostly on an individual basis. Haven't followed closely lately but they still have a lot of cleaning up to do (and unpopular decisions to take) in their banks that have debt overhang.

Speaking of debt, it's a worldwide phenomenon and even if central banks don't see inflation in their measurements we certainly have it in the luxury segment.

[Cru Jones]

Originally Posted by brandrea

Interesting information. On the other end of the spectrum there’s Italy... is the economy struggling there? We just came back from vacation there and things looked vibrant from an outsiders perspective...

Yes, there’s a growing concern with Italy. Italian recession + huge debt could tear apart the EU: https://www.businessinsider.com/ital...urozone-2019-4

Anyway, interesting to see Italy, at 20% of the population, getting half as many watches as the US.

[iheartrolexx]

i guess people should blame their own countries and leaders for poor economic performance and themselves for not making more money

[Luap1976]

That tatic of Asians going around eu sweeping up watches from ad would not work in the UK.if your a foreigner the ad will not sell you a hot watch.hell if your not from the same city they won't sell to you.so if a random group of Asians walk into the ad here they will get nothing. Plus there are no watches on display.maybe the watches are on display in Europe and it's first come first served but not here

I still blame the ads the Grey's and flippers as they are the cause of this issue.There is zero shortage of watches

[joli160]

Originally Posted by Luap1976

That tatic of Asians going around eu sweeping up watches from ad would not work in the UK.if your a foreigner the ad will not sell you a hot watch.hell if your not from the same city they won't sell to you.so if a random group of Asians walk into the ad here they will get nothing.

Wow, you have a problem with Asians ?

[TswaneNguni]

Originally Posted by Luap1976

That tatic of Asians going around eu sweeping up watches from ad would not work in the UK.if your a foreigner the ad will not sell you a hot watch.hell if your not from the same city they won't sell to you.so if a random group of Asians walk into the ad here they will get nothing. Plus there are no watches on display.maybe the watches are on display in Europe and it's first come first served but not here

I still blame the ads the Grey's and flippers as they are the cause of this issue.There is zero shortage of watches

Same in my country .ADs sell the "hard to get models" to locals.
Tourists have the benefit of claiming back 15% VAT at the airport.
So ,imagine a tourist buying a Daytona at an AD,getting 15% back, flying to Hong Kong,selling it in the secondary market ...HUGE profit.

Shop for Rolex in your own country .

[Onikage]

Originally Posted by Luap1976

That tatic of Asians going around eu sweeping up watches from ad would not work in the UK.if your a foreigner the ad will not sell you a hot watch.hell if your not from the same city they won't sell to you.so if a random group of Asians walk into the ad here they will get nothing. Plus there are no watches on display.maybe the watches are on display in Europe and it's first come first served but not here

Not everyone here who has landed a hot model is a 'local' customer. How you can claim to be familiar with how every AD in the country operates is beyond me. How every AD can distinguish who is local before the point of sale is also something of a mystery..