Although younger generations of non-European upper middle class consumers are increasingly likely to purchase products in luxury timepieces in their own countries, Paris remained a key location for the purchase of luxury timepieces in the early months of 2020. Chinese customers, for example, are even more likely to purchase luxury timepieces in Paris than they are in Switzerland, even though most products in luxury timepieces sold in France are imported from Switzerland.
In 2019, local production and sales in luxury timepieces had just begun to recover from the year of bad performance in 2018 when the category was hit by the dramatic effects of the COVID-19 pandemic. The COVID-19 pandemic, then, came at an inopportune moment as the growth rate had begun to suggest an upwards trend at the end of the review period, before the COVID-19 crisis disrupted sales again, and much more severely too.
As the COVID-19 pandemic saw the closure of retail outlets in France, companies adapted to the global crisis by expanding their online presence through innovative developments. Although these innovations did not prevent double digit declines in sales, mainstream companies were able to reinforce their online visibility and boost their online sales.
Even though luxury timepieces are not expected to rebound instantly from the poor performance of 2020, with the category not expected to recover to pre-COVID-19 sales until the second half of the forecast period, the trend for self-indulgence is a positive sign for the category going into the forecast period. The self-indulgence trend is expected to target millennial consumers especially, who are more likely to look at luxury timepieces as treats for themselves than other consumers.
Two indirect competitors that could pose a significant obstacle for luxury timepieces are non-luxury timepieces and connected sports watches. Neither of these are included in the luxury timepieces segment.
Sales of second-hand luxury timepieces boomed in recent years, and the popularity of such products keeps growing. For those eager to own a beautiful watch, luxury timepieces have become affordable thanks to the wider availability of second-hand products, which are now also considered a good way to purchase.
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This report originates from Passport, our Luxury Timepieces research and analysis database.
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