Loss of tourist spending in 2020 caused a severe contraction to watch brands’ sales, from high-priced to basic, as tourist spending used to be the major source of revenue with brands focusing on tourists in products and services before the pandemic.
To address the recovering local demand for watches in 2021, customisation and unique experiences are still important to engage with local consumers. Hong Kong consumers tend to value in-store services and experiences as part of engagement with brands.
As brands ramped up their digital presence via social media and e-commerce, internet retailing recorded historical growth for watches in 2020. Multiple brands launched their direct-to-consumer platforms to drive online growth.
Over the forecast period, after travel restrictions were lifted with the growing vaccination rate and pandemic control, high watches are expected to lead recovery ahead of their basic and mid counterparts. Though the sharp evolution of domestic travel retail and e-commerce in mainland China is slated to be growing competition for Hong Kong watch retail, the appeal to mainland tourists will remain in the long term due to VAT difference, especially for hard luxury.
With second-hand platforms recording further popularity among consumers during the pandemic, luxury brands have proactively tapped into this segment to embrace this as a new business model. In addition, they also rise to use digital technology to ensure the authenticity and reliability of transactions.
Consumers have grown to be more health conscious and increasingly demand smart watch features in order to better track and monitor their health and exercise. Cannibalisation of traditional watches by smart watches is expected to further grow over the forecast period, with brands such as Garmin and Fitbit, adopting craftsmanship and design from traditional watches.
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Understand the latest market trends and future growth opportunities for the Watches industry in Hong Kong, China with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Watches research and analysis database.
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