Many companies aspire to become eBay of high quality watchmaking, including the legendary online marketplace itself.
Demand for luxury watches has skyrocketed during the Covid-19 pandemic. But the Big Four watch brands – Rolex, Patek Philippe, Audemars Piguet and Richard Mille – adhere to limited editions, which makes their watches so rare. The result has been an online boom in the business of buying, selling and reversing used and vintage watches, as well as an increase in the number of startups competing for digital dominance.
McKinsey estimates pre-owned watch sales in 2019 will be $ 18 billion and could surpass $ 30 billion by 2025. By 2025, pre-owned watch sales will account for about half of the new retail watch market, up from about a third today. , according to the consulting company.
“The market for pre-owned watches is still very similar to the Wild West,” said Toby Bateman, CEO of popular watch collectors site Hodinkee. “There are many platforms for selling watches. And customers don’t necessarily know who they are buying from. They cannot guarantee that they are genuine. They cannot guarantee that this is not Frankenwatch. And they cannot guarantee that the clock is working properly. “
Hodinkee opened its second-hand watch shop on Tuesday, where it will buy and sell watches made after 1990. The company, which raised $ 40 million in December from the likes of NFL defender Tom Brady, singer John Mayer, Apple alumnus Tony Fadell and investor Peter Chernin, is aiming to become a “world famous watch brand.”
Hodinkee’s pre-owned watch store will start with a range of 250 pre-owned watches and will offer authentication and refurbishment at a state-of-the-art Atlanta watch factory. Bateman said Hodinkee’s advantage over a growing list of competitors is its experience and history as a prominent watchmaker.
However, competitors are catching the attention of investors. The German company Chrono24 recently raised € 100 million ($ 116 million) from investors including Aglae Ventures General Atlantic and LVMH CEO Bernard Arnault. The investment valued Chrono24 at over $ 1 billion, making it the first unicorn in its segment. The company said it sells approximately 500,000 watches from over 3,000 retailers and over 30,000 private sellers.
Meanwhile, Switzerland-based Chronext was planning to raise about $ 270 million in an initial public offering, which would have valued the company at over $ 1 billion. However, Chronext said last week that it was postponing its debut due to “unfavorable market conditions for fast-growing companies.”
Chronext has assembled a stellar board that includes former Facebook marketing director Gary Briggs and former Barneys New York CEO Danielle Vitale, and is committed to expanding into the United States and Asia.
Companies like Watchfinder, WatchBox, and Watchmaster are also expanding and looking to gain market share. Even eBay has targeted the Rolex crowd by launching an Authenticity Guarantee program and targeting higher-end watch collectors.
The question is how long the current hourly boom can last and whether there will be enough online sales to continue. The Big Four watch brands, which collect most of the luxury collections, are privately owned and have maintained their low production volumes despite huge demand in order to maintain their legendary quality and exclusivity. According to a Morgan Stanley report, Rolex sold 810,000 watches last year, while Patek sold 53,000, Audemars 40,000 and Richard Mille 4,300.
Demand is expected to continue to outpace supply, at least in the short term. With stainless steel sports watches and other popular models that are nearly impossible to buy at retail, long waitlists and limited allocations, aftermarket prices are on the rise. Patek Philippe Ref. The 5711 Green Dial, which sells for $ 35,000, was sold at a July auction for $ 490,000. According to Chronext, the value of the Audemars Piguet Royal Oak 15500ST (blue dial) has nearly tripled since 2017 to over $ 55,000, while the value of the Rolex Day-Date 40 is up 76% since 2017 to over $ 50,000.
Industry leaders say the rapid growth in global wealth driven by stocks and cryptocurrencies, along with the proliferation of online watch collectors and information sites, has spawned a whole new generation of young collectors who buy and sell watches online. Social media has also boosted sales as more collectors love to display their Swiss status symbols on Instagram and TikTok. It remains to be seen for watch buyers and sellers, startups and online marketplaces how many of these new traders will remain if used prices and demand fall.
“There are many more people today who consider themselves collectors and enthusiasts than there were just a few years ago,” said Bateman.