e-commerce in the watch industry before, during, and after COVID

The evolution of e-commerce in the watch industry before, during, and after COVID can be traced through several key indicators that highlight shifts in consumer behavior, brand strategies, and market trends across Europe, the USA, and Asia. Here's an overview with relevant data points for each period:

Before COVID-19 (Pre-2020)

1.??? Traditional Retail Dominance:

o? Most luxury watch sales were conducted through traditional brick-and-mortar stores or authorized dealers. E-commerce was underpenetrated, especially in the high-end and luxury segments, where physical presence and personal relationships were key.

o? In the U.S., e-commerce represented about 5-10% of total luxury watch sales, with brands like Rolex and Patek Philippe largely resisting online sales.

o? Europe and Asia followed similar patterns, although digital platforms like Chrono24 were emerging as significant players in the secondary market, particularly in Asia.

2.??? Growing Interest in Online Marketplaces:

o? Platforms such as Chrono24, WatchBox, and Farfetch were growing in popularity, mainly focused on pre-owned and vintage watches.

o? China was showing early signs of e-commerce adoption in the luxury sector, with platforms like JD.com and Tmall Luxury Pavilion starting to cater to high-end consumers, although growth was still moderate.

During COVID-19 (2020-2021)

1.??? Rapid Shift to Online Channels:

o? Lockdowns and travel restrictions forced many luxury watch brands to pivot to e-commerce. Brands that had previously resisted online sales, like Rolex, Audemars Piguet, and Patek Philippe, began exploring online retail options.

o? Online sales of luxury watches surged by over 50% globally in 2020, with Asia and the U.S. leading the charge.

o? China emerged as a key driver, with online luxury sales growing by 30-40% in 2020. Tmall and JD.com reported significant growth in watch categories, driven by young affluent consumers who embraced digital platforms.

o? In Europe, online sales were also on the rise, but with a slower adoption rate than in Asia and the USA. European consumers still preferred the experience of buying in-store, but the pandemic forced a quicker shift online, particularly in countries like the UK and Germany.

2.??? Digital Strategies by Major Brands:

o? Richemont invested heavily in expanding its e-commerce platforms, particularly through Yoox Net-a-Porter (YNAP).

o? LVMH accelerated digital strategies for its brands like TAG Heuer and Hublot, focusing on direct-to-consumer (D2C) platforms.

o? Swatch Group also saw rapid growth in online channels for brands like Omega and Tissot, particularly in the U.S. and China.

3.??? Market Indicators:

o? McKinsey & Company reported that online sales of watches grew from around 12% of total sales in 2019 to about 23% in 2020.

o? Chrono24 saw a 37% increase in watch listings and sales during the pandemic, showing the increasing role of digital marketplaces.

o? In Asia, particularly in China, e-commerce share grew from 6% of luxury watch sales pre-COVID to 13-15% during the pandemic, marking a significant shift.

After COVID-19 (2022-Present)

1.??? Permanent E-commerce Integration:

o? Many consumers who switched to online shopping during the pandemic have maintained these habits post-COVID. The e-commerce share of luxury watch sales is expected to reach 30% by 2025, according to McKinsey.

o? In the USA, online watch sales now account for over 20-25% of the market, with platforms like WatchBox and Bob's Watches continuing to grow.

o? Asia, especially China, is leading the global watch e-commerce space, with up to 40% of luxury watch sales in China happening online by 2023, driven by platforms like JD.com and Tmall.

2.??? Omnichannel Strategy:

o? Brands have moved towards an omnichannel strategy, combining online and offline experiences. For example, Bucherer and Watches of Switzerland have developed seamless shopping experiences, where customers can browse online and purchase in-store or vice versa.

o? Europe remains slower in adopting full e-commerce for luxury watches, but countries like the UK and Germany are closing the gap, with online sales now representing about 15-18% of the market in these regions.

3.??? Secondary Market Boom:

o? The pre-owned watch market has exploded, driven by platforms like Chrono24 and WatchBox. The global secondary market for watches grew by an estimated 60% from 2019 to 2023, reaching a total market size of over $20 billion.

o? Europe remains a strong player in the pre-owned market, while the USA and Asia are seeing increased interest from younger buyers, particularly millennials and Gen Z.

Key Indicators of E-Commerce Evolution by Region:

·???? Europe: Pre-COVID: 5-10% e-commerce penetration → During COVID: 15-20% → Post-COVID: 18-20%.

·???? USA: Pre-COVID: 10% e-commerce penetration → During COVID: 20-25% → Post-COVID: 25-30%.

·???? Asia (China): Pre-COVID: 6% e-commerce penetration → During COVID: 13-15% → Post-COVID: 30-40%.

Conclusion:

The watch industry, traditionally resistant to e-commerce, experienced a significant shift during the pandemic, with online sales growing at an unprecedented rate. While brick-and-mortar stores remain important, especially in Europe, digital channels now play a crucial role, particularly in the USA and Asia. This shift is expected to continue, with brands increasingly adopting omnichannel strategies to meet evolving consumer expectations.

For further information, and request an offer for having our e-Commerce consultants working for your brand, please contact Antaes Consulting