In Singapore, second-hand watch prices are increasing exponentially. Why?
By Charmian Leong (CNA Luxury)
In Singapore, second-hand watch prices are
increasing exponentially. Why?
Prices of sought-after models from established watch brands such as Rolex, Patek Philippe and Audemars Piguet can double the second they leave an official retailer. We explore what’s causing this boom in the secondary market.
Old is gold now in the luxury space. And we’re not even talking about museum-worthy jewellery pieces or rare vintage handbags. Even a pre-loved jacket from last season will find new life on the secondary market. According to the 2021 Luxury Resale Report released in August by The RealReal, the world’s largest online marketplace for authenticated, resale luxury goods, luxury resale is experiencing record growth, with the site seeing six million new members since the end of June 2020.
Sustainability and a growing distaste for fast fashion are the main drivers for this trend, but such noble motivations go right out the window when it comes to the resale of luxury timepieces. All that matters to players in this space is just how much you can flip these tickers for, because pre-owned watch prices aren’t just going up almost daily, but exponentially. Rolex’s recommended retail price for its 40mm steel Cosmograph Daytona Ref. 116500LN is S$18,140, but over on global luxury watch marketplace Chrono24, a used version of that model is going for a minimum of S$52,000. What gives?
“As international borders are still restricted, affluent customers are shifting experiential purchases such as travel to material ones,” said Ng Kean Seen, deputy CEO of local pawnbroker chain Maxi-Cash. “At the primary market, demand is outstripping supply, causing the resale market to be very active.”
Based on Ebay’s 2020: Luxury Watch Report, the best performing brands are, predictably, Rolex, Omega, Breitling, Tag Heuer and Patek Philippe. Over on Chrono24, specific models like the Rolex Daytona, Patek Philippe Nautilus and Audemars Piguet Royal Oak are almost always sold at premiums of 100 per cent or more. But anyone who has been collecting these since before the pandemic will know they were never that easy to come by in the first place thanks to the brands’ strategic scarcity.
Said Audemars Piguet CEO Francois-Henry Bennahmias in an interview with McKinsey & Company, “We could sell 2,500, maybe 3,000 of our
Royal Oak ‘Jumbo’ Extra-Thin models a year. But we only make 900. If we made 3,000 pieces tomorrow, no one would want it. That’s just how it works.”
But it’s not just strained supply – pandemic-caused or otherwise – that’s turning the secondary market into the wild west. The growing ubiquity of online platforms is transforming the pre-owned watch market into the industry’s fastest-growing segment.
According to McKinsey’s The State of Fashion: Watches and Jewellery report this year, the market is expected to reach US$29 billion (S$39 billion) to US$32 billion in sales by 2025 – more than half the size of the first-hand market. The report also states that watch enthusiasts and impatient shoppers account for about two thirds of total pre-owned sales, and are most likely to to be willing to pay a premium for a pre-owned watch.
Despite rising prices, Ng doesn’t believe that this will lead to a bubble forming. “Historically, retail prices have been increasing annually. And not all watches are the same: Discontinued and limited edition production models fetch higher premiums, so the downside risk is also limited for the popular brands and models. The current low interest rate environment also makes it a very attractive time to invest in luxury timepieces.”
Brothers Jarod and Joses Ng, co-founders of retailer Watch Capital agreed, stating that brands increase their prices about two- to five per cent every year anyway. So is it safe to invest in such timepieces now? “Yes it is. As they are not readily available at retail stores, resale prices will naturally eventually exceed retail ones, and the watchmakers won’t be flooding the market since that will dilute their brand.”
Source: https://cnaluxury.channelnewsasia.com/obsessions/second-hand-watches-singapore-prices-189861
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