Watches in Malaysia

2021 DEVELOPMENTS

Road to recovery predicted in second half of 2021

Following significant declines in 2020 as a result of the pandemic, watches is predicted to record a much improved performance due to pent-up demand, although various restrictions in place over the first half of the year are likely to influence certain purchasing patterns with the continued absence of international tourists resulting in the category relying on domestic consumers to initially drive growth.

Players and retailers continue with various marketing strategies including price promotions, resulting in lower value sales

While The Swatch Group (M) remained the overall leader of watches in 2020, being particularly strong in high and mid watches where it offers Longines, Tissot and Omega, it lost share to its closest competitor Seiko Holdings Corp with the latter making notable gains, particularly in mid mechanical and basic and mid quartz analogue watches which it comfortably leads. Significant declines in demand for watches as a result of the pandemic has encouraged players and retailers to turn to various marketing strategies to gain consumers’ attention, including deep price promotions and exclusive or time-limited sales.

Omnichannel approach continues to appeal to basic and mid brands

A further shift towards e-commerce is likely in 2021 in terms of watch purchases in a continuation of greater value share gain for the channel the previous year when consumers perceived it to offer a convenient and safer retailing option during the pandemic. However, as with jewellery, many consumers prefer to see and try on watches before purchasing, for aesthetic and comfort reasons and to avoid the risk of buying counterfeit products.

PROSPECTS AND OPPORTUNITIES

International luxury watch brands to strengthen physical presence in Malaysia, appealing to affluent consumers searching for superior shopping experience

Demand for watches is set to further improve over the early part of the forecast period with particularly high growth rates in 2022, as consumers rearrange postponed weddings, birthday parties and other celebrations. The return of inbound tourists looking for mid and high watches at relatively low prices may also stimulate sales, with these price segments set to see the most impressive volume growth rates early on.

Further potential for digital sales and marketing

An increasing number of specialist retailers are not only expected to adopt an omnichannel approach to sales by investing in e-commerce stores but also using digital technology as an effective marketing tool. Luxury Swiss watch manufacturer IWC Schaffhausen launched its IWC Virtual Boutique in Malaysia in April 2021 through swisswatchgallery.

Social media platforms to gain popularity as strategy to attract tech-savvy consumers

Social media is also likely to be increasingly adopted as a marketing tool by players to attempt to appeal to affluent tech-savvy consumers, with Instagram and Facebook popular platforms. The first half of 2021 had seen a rising number of live sessions being held by brands such as Oris Instagram Live Session run in conjunction with influencers and watch collectors, and online retailers such as Solar Time’s Facebook Live Session, which showcased handpicked watches from brands including Cerruti 1881 and Bonia with special promotional offers.