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19 July 2018, 01:32 AM | #1 |
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Is China responsible for the scarcity of SS Sport models?
Hi,
Reading the recent article from Fratello Watches asking why are there no Stainless Steel Sport models available (https://www.fratellowatches.com/you-...hes-available/ ) I'm reading all sort of good reasons, but it's surprising no-one has ever suspected it could be the same reason happening in many other manufacturing industries nowadays: the China demand. You guys have no idea of how people are spending money here. I live in an average middle class residence in Shanghai. People are just average white collar workers, mostly in their 30s-40s, but they spend like crazy with no concern on saving for tomorrow because they think they are in a eternal growth scenario... The average cars on the parking lot are Porsche Macan and BMW/Mercedes (3 series to X6 mostly). There are advertisement posters of Maserati in my elevator, proposing amazing loans to purchase a car on credit - they all do that. The worst thing is: it works. Maserati popping up now in the parking lot. We get any foreign luxury car much faster than other countries because brands are shipping most of them to China - where customers hate to wait and want the car right on the spot without any single day of waiting, otherwise they just switch to the competitor without thinking (replying you have to wait is making the customer lose face). People keep consuming like hell on credit. The result is: the Chinese debt is almost 300% of the GDP. They receive warnings from all global economics agencies, but it's another story... I see a lot of these people wearing SS Rolex. Submariners are extremely popular. They usually shop them both in China and surrounding countries, especially Hong Kong as it's close and cheaper. Hong Kong dealers are unanimously saying that Mainland Chinese drive their sales ( I was in HK 3 weeks ago: on some portion of Nathan road I counted 6 Rolex ADs in 200meters!!) Now you can imagine that effect spread on 1.3Billion people and a growing upper-middle class population. There are 1.2 million people in my small district, out of the 20 million population of the city. I didn't do the math but that represents a freaking load of Rolex in there!! It quickly dries out the global stock of many global manufacturing. In my business other global customers and distributors are complaining because they can't get their products, waiting lists are too long as China is placing too large orders, and our whole supply chain is impacted because we can't source the components fast enough. Our suppliers are having the same problem... The same goes with all businesses, and happens obviously with Rolex I guess. The problem is not the proportion of people wearing them or how famous the models are, it's more because of the volume of customers growing by millions every month. Rolex is produces "only" a million watches per year... |
19 July 2018, 01:36 AM | #2 |
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Sounds like China’s version of 1929...we all know how that turned out!
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19 July 2018, 01:37 AM | #3 |
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Sounds pretty logical to me. I was there for work for a month and in HK and noticed this.
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19 July 2018, 01:39 AM | #4 |
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Well..that's very 'American' of them!
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19 July 2018, 01:40 AM | #5 | |
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Quote:
3 months later: up again. Problem solved. Everyone forgot. Growing like crazy again. |
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19 July 2018, 01:43 AM | #6 |
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So they play rich but it’s based on credit. That situation will probably implode sooner or later.
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19 July 2018, 01:46 AM | #7 |
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19 July 2018, 01:46 AM | #8 |
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I don't think so, look at the oceans of DJ/TT/PM at every ADs, most Asian I know are happy with a TT gold DJ. I think this is a better article:
https://www.ablogtowatch.com/why-som...ssible-retail/ This scarcity has been going for 9 months and looks like it may continue for years, so I don't believe Rolex who makes 1 million a year cannot increase the production of SS Sport and reduce DJ/TT/PM to meet the demand. |
19 July 2018, 01:53 AM | #9 |
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This shortage started approximately a year ago , Chinese started buying since last year ?
If Rolex wanted to make more watches i think they can I think it is more of a Rolex manufacture move and no one really knows the reason
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19 July 2018, 01:54 AM | #10 |
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I swear I've read articles about Rolex trying to hedge the Asian market risk as they aware that is a bubble that can burst anytime.
The Chinese specifically, in my personal observations, are obsessed with big name brands and Rolex just happens to be that one for watches. Omega could've had the prestige of Rolex, even if everything else was the same, and I'm sure Omega would have been the brand of choice or anything else for that matter. Works the same way with LV over there. We have a lot of Chinese who come over to visit on vacation. I've seen people take multiple bags out of the Rolex AD. Apparently, the watches are cheaper here so they come and buy them for their entire family sometimes. The amount of money my local ADs must make off of Chinese and Middle Eastern (Gulf Arabs) tourists is mind-boggling to think about. |
19 July 2018, 01:59 AM | #11 |
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Make sense. The global economy is dependent on endless unfettered consumption to sustain perpetual growth, fuelled mostly by debt. Curious how long this really can last.
One thing about mechanical watches though, which is different from other goods, there is a finite limit to the supply of mechanical watches from top watch brands, especially those that are desirable, due to the human skills required that takes years of training. So it is not like supply can suddenly rise to meet demand, which is why we are in this "shortage" situation of popular watches. Just my speculation.
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19 July 2018, 02:00 AM | #12 | |
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19 July 2018, 02:02 AM | #13 |
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Your point seems valid, and quite interesting but at the end of the day:
It will still remain a mystery why certain Rolex watches aren’t available. Maybe if only Nostradamus is alive he can shed some light to this mystery.
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19 July 2018, 02:08 AM | #14 |
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Before China's crack down on "gift-giving" at one point Chinese buyers (whether bought domestically or abroad) accounts for over 50% of Swiss luxury watches. Still wouldn't surprise me if Chinese is still the biggest buyers of luxury watches now.
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19 July 2018, 02:11 AM | #15 |
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The same happened with scotch.
A surge in demand in the Chinese market due to changes in tariffs has impacted prices and some inventory over the past few years. They are a massive player in the world market. |
19 July 2018, 02:22 AM | #16 |
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We have all seen what happens when people become overextended on their credit. At some point, something has to give....then it gets ugly.
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19 July 2018, 02:25 AM | #17 |
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They might be #2. #1 is Watch Forum Members.
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19 July 2018, 02:30 AM | #18 |
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I was just in honk Kong as well...the number of Rolex AD’s made me question if they were authentic...never seen so many in one location (it’s basically like a Starbucks). They are authentic btw but still surprising...none of them had any sport models either and didn’t anticipate having any in the near future...and they really wanted my BLNR. But yea I have heard about China buying a lot of the SS sport models and driving all the prices up.
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19 July 2018, 02:33 AM | #19 | |
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19 July 2018, 02:40 AM | #20 |
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There are many affluent Asians. And they are not over-extended.
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19 July 2018, 02:44 AM | #21 |
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19 July 2018, 02:46 AM | #22 |
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As my teenage members of the family say "you are here for a good time, not a long time".
My take on the original question is yes, China has a lot of influence on the luxury goods availability worldwide. |
19 July 2018, 03:01 AM | #23 |
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Nearly every high end lux store in NYC/SFO and Europe has Chinese speaking sales staff to deal with these buyers. I was at Wempe NYC recently (bought three SS sports models) and the bulk of the store was Chinese buyers, paying in cash.
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19 July 2018, 03:06 AM | #24 |
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Like you say, many mainland Chinese do watch-shopping in Hong Kong (significantly lower taxes). I haven‘t seen SS Submariners and GMTs in Hong Kong AD‘s windows for years now, so I don‘t really follow your theory.
However greys at a premium are another story there. |
19 July 2018, 03:12 AM | #25 |
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19 July 2018, 03:15 AM | #26 | |
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Quote:
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He could not just wear a watch. It had to be a Rolex. Ian Fleming |
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19 July 2018, 03:28 AM | #27 |
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You sound very bitter. Are you sure the Rolex are real. Chinese likes precious metals.
SS is not. You might be seeing replicas or homage. Thank you for sharing. I still blame Rolex for controlling the supply. Its easy to blame the Chinese.
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19 July 2018, 03:36 AM | #28 |
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I would add demand from India could be a factor too.
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19 July 2018, 03:43 AM | #29 |
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19 July 2018, 04:03 AM | #30 |
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When I was visiting my home country Korea I stopped in several Rolex dealers.
They didnt have a single SS sports models or other entry Rolex models. So I asked, why such a short stock on display etc. I’ve got same answers from all the dealers I visiti, “Chinese tourists”. |
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china , stainless steel |
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