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The western watch manufacturers are cheered up by their wonderful performance in China as their Chinese peers are struggling at the same time.
Influenced by the financial crisis, the global watch industry received serious blows in the traditional markets of Europe, America, Japan and so on. However, Dr. Ulrich Fischer, vice president of marketing for Tissot didn’t worry about repeating last year’s 4% growth in 2010.
The potential of the emerging Chinese market could explain his composure. In the past years, Tissot annually saw double-digit growth occur to its sales in China, much faster than in the traditional markets of Europe, North America and Japan. The sales in China last year already accounted for one fifth of its sales in the global market.
In truth, the middle-end watches priced at between 2,000 and 6,000 yuan (USD 292.9 and 878.7), like the products of Tissot, Titoni and Citizen, have already become a substantial part of the Chinese market.
Song Zhiyang, an expert in China’s watch market, said that the economic development was accompanied with the improving consumption level and taste of the Chinese people, as well as their higher requirements for the watches.
The drastic increase in demand for the middle- and high-end watches in China is even beyond the expectation of these watch makers. Dr. Fischer said that Tissot saw unexpected sale in China in 2007 and 2008 and some types of watches are even short in supply.
According to a source, the middle-end watch maker – like Tissot – can earn a large amount of profits in every process. The dealers in China can get these watches at a price with a 35% discount of the market price from the wholesalers in the Switzerland. The dealers sell these watches to the retailers at the price 15% lower than the market price. During this process, Tissot can earn 15% to 20% profits.
According to the statistics, there are 200 watch brands in China, of which there are 60 foreign brands, including Omega, RADO, Longines, Rolex, Tissot, Tudor, Titoni, Enicar, Citizen and so on. In this market filled with furious competition, even Tissot, which is the brand producing and selling the largest number of Swiss traditional watches, can not say that it could stand firmly forever in China.
Dr. Fischer’s primary task in China is to take faster pace into the Chinese second- and third-tier cities. In the major cities like Shanghai and Beijing, Tissot has the largest number of stores as well as the largest amount of sales. But a single store in the second-tier cities like Nanjing and Wuhan can enjoy higher sales than the ones in Shanghai and Beijing. That’s because Tissot has fewer stores in these cities where demand is not lower than the major cities. Dr. Fischer believes that there is great potential in these Chinese second- and third-tier cities and hopes that Tissot can take advance in controlling these markets.
When the imported foreign watches stirred up the Chinese watch market, the domestic watches seem to be at the losing side. According to the analyst, 40% of the sales in China’s watch market are realized through middle-end watches. The watches made by the watch makers in Europe and America (the Switzerland excluded), Hong Kong, Japan and Korea all belong to middle-end watches. However, only parts of the products from the domestic watch makers – Fiyta, Rossini and Seagull – stepped into the middle-end watch market.
According to the data from the Ministry of Commerce, 80% of the watches in the world are made in China. However, the total imports volume is 2 billion US dollars, only taking 10% of the global market. In China, the domestic-made watches, though taking 70% of the market share, only realize 30% of the sales in the whole market, much lower than their foreign peers.
“Though China enjoys the highest output of watches in the world, the Chinese watch makers and brands, haunted by their short history, can not establish high reputation and influential power in the international market. In a short term, it is hard for the Chinese domestic watches to compete with the foreign watches,” said Song Zhiyang.
Influenced by the financial crisis, the global watch industry received serious blows in the traditional markets of Europe, America, Japan and so on. However, Dr. Ulrich Fischer, vice president of marketing for Tissot didn’t worry about repeating last year’s 4% growth in 2010.
The potential of the emerging Chinese market could explain his composure. In the past years, Tissot annually saw double-digit growth occur to its sales in China, much faster than in the traditional markets of Europe, North America and Japan. The sales in China last year already accounted for one fifth of its sales in the global market.
In truth, the middle-end watches priced at between 2,000 and 6,000 yuan (USD 292.9 and 878.7), like the products of Tissot, Titoni and Citizen, have already become a substantial part of the Chinese market.
Song Zhiyang, an expert in China’s watch market, said that the economic development was accompanied with the improving consumption level and taste of the Chinese people, as well as their higher requirements for the watches.
The drastic increase in demand for the middle- and high-end watches in China is even beyond the expectation of these watch makers. Dr. Fischer said that Tissot saw unexpected sale in China in 2007 and 2008 and some types of watches are even short in supply.
According to a source, the middle-end watch maker – like Tissot – can earn a large amount of profits in every process. The dealers in China can get these watches at a price with a 35% discount of the market price from the wholesalers in the Switzerland. The dealers sell these watches to the retailers at the price 15% lower than the market price. During this process, Tissot can earn 15% to 20% profits.
According to the statistics, there are 200 watch brands in China, of which there are 60 foreign brands, including Omega, RADO, Longines, Rolex, Tissot, Tudor, Titoni, Enicar, Citizen and so on. In this market filled with furious competition, even Tissot, which is the brand producing and selling the largest number of Swiss traditional watches, can not say that it could stand firmly forever in China.
Dr. Fischer’s primary task in China is to take faster pace into the Chinese second- and third-tier cities. In the major cities like Shanghai and Beijing, Tissot has the largest number of stores as well as the largest amount of sales. But a single store in the second-tier cities like Nanjing and Wuhan can enjoy higher sales than the ones in Shanghai and Beijing. That’s because Tissot has fewer stores in these cities where demand is not lower than the major cities. Dr. Fischer believes that there is great potential in these Chinese second- and third-tier cities and hopes that Tissot can take advance in controlling these markets.
When the imported foreign watches stirred up the Chinese watch market, the domestic watches seem to be at the losing side. According to the analyst, 40% of the sales in China’s watch market are realized through middle-end watches. The watches made by the watch makers in Europe and America (the Switzerland excluded), Hong Kong, Japan and Korea all belong to middle-end watches. However, only parts of the products from the domestic watch makers – Fiyta, Rossini and Seagull – stepped into the middle-end watch market.
According to the data from the Ministry of Commerce, 80% of the watches in the world are made in China. However, the total imports volume is 2 billion US dollars, only taking 10% of the global market. In China, the domestic-made watches, though taking 70% of the market share, only realize 30% of the sales in the whole market, much lower than their foreign peers.
“Though China enjoys the highest output of watches in the world, the Chinese watch makers and brands, haunted by their short history, can not establish high reputation and influential power in the international market. In a short term, it is hard for the Chinese domestic watches to compete with the foreign watches,” said Song Zhiyang.