Luxury Timepieces in Indonesia

2020 IMPACT

Sales of luxury timepieces slump due to enforced closure of retail stores

Deep declines were recorded in sales of luxury timepieces during 2020 as the influence of the COVID-19 pandemic put substantial pressure on the category. One of the main factors behind the category’s performance during the year was the government-mandated closure of all non-essential retail stores during the quarantine lockdown that was enforced throughout the country at the peak of the COVID-19 pandemic.

Emergence of adverse, uncertain economic scenario puts the brakes on sales growth

Luxury timepieces registered positive sales growth in Indonesia for much of the review period. This was based on the favourable economic situation in Indonesia and the country’s positive economic development in recent years.

The emergence of a substantial second-hand market puts pressure on sales growth

The adverse economic environment that emerged over the course of 2020 due to the COVID-19 pandemic had an interesting effect on the market in luxury timepieces in Indonesia in terms of spurring significant development in the second-hand market. On the one hand, declining spending power and the significant pressure that came on household incomes due to the interruptions that were seen to commercial activity in several key sectors of the Indonesian economy motivated many people to sell their luxury timepieces, many of which were considered to be investment pieces.

RECOVERY AND OPPORTUNITIES

A slow and muted recovery expected for luxury timepieces

Demand for luxury timepieces is expected to remain low for several years due to the negative impact of the COVID-19 pandemic on the spending power of Indonesia’s urban middle-class. With consumer spending likely to remain heavily focused on more essential items, demand for non-essential luxuries such as luxury timepieces is expected to remain very muted.

Men’s luxury timepieces unlikely to lose its dominant status

Men’s luxury timepieces can be expected to remain the dominant category of luxury timepieces in Indonesia throughout the forecast period. Although recent years have seen more women began to wear luxury timepieces, sales of women’s luxury timepieces remain as low as 25% of sales of men’s luxury timepieces.

Technology set to be employed to and the category’s reliance on store-based sales

The severe damage done to category sales due to the government-mandated closure of all non-essential retail stores during the quarantine lockdown at the peak of the COVID-19 pandemic and the hesitant attitudes towards retail shopping among the population for much of the year due to fears of contagion underlined the importance of developing new technologies that can support growth in online sales of luxury timepieces. The main objections that most Indonesians have to purchasing luxury timepieces online include the fear of inadvertently buying counterfeit products and concerns over the security and safety of online payment systems when engaging in very high value transactions.