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Mass luxury watches expect stellar growth in China – Retail in Asia

Retail in Asia

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Mass luxury watches expect stellar growth in China

"It’s all about mass luxury goods in China this year, not the super luxury," said Joohee An, Asia Pacific portfolio manager at Mirae Asset Investments. "The country wants to grow a bigger middle class."

One area that is particularly feeling this trend is the watch industry. "The sales of luxury watches with a price tag of CNY50,000 (USD7,927) or above will slow this year," Zhang Yuping, chairman and founder of Hengdeli, the retail partner of Swatch Group in China.

However watches from Longines, the Swiss brand owned by Swatch Group, are doing well, attracting the burgeoning Chinese middle classes with price tags around USD1,500. Because of lower commissions paid to the brands, mid-priced watches can have higher profit margins. Sales of mid-priced watches are expected to grow at "strong double-digits" this year, he said, without elaborating.