Should Luxury Watch Brands Chase the

The Great Divide in Luxury Watches

Over the past five years, the luxury watch industry has witnessed a stark polarization. Strong brands—think Rolex, Audemars Piguet, and Omega—have grown even stronger, while weaker names have struggled to stay relevant. Interestingly, both camps have adopted nearly identical strategies: actively courting younger consumers. Yet, the outcomes couldn't be more different. This suggests that market success isn't solely determined by strategic choices or execution quality. The generational baton has passed from Generation X to Millennials and Gen Z, and the industry is still grappling with how to adapt.

The Rise of the Young Luxury Consumer

In China, over 60% of luxury buyers are aged 20 to 35. These young consumers grew up during a period of rapid economic growth and digital transformation. Many come from affluent families, receive top-tier education, and have capitalized on internet, real estate, and financial investment booms. They have the financial means to splurge on high-end goods, and luxury watches are a staple on their shopping lists. This shift has created both opportunities and challenges for luxury brands, which often lack a deep understanding of this demographic. Fortunately, China's advanced e-commerce ecosystem—from Taobao and JD.com to Douyin and Kuaishou—has generated massive data, enabling brands to analyze and target these consumers with unprecedented precision.

Two Types of Young Luxury Buyers

Trust-Funded Youth: These individuals rely on monthly allowances from their parents, typically ranging from 50,000 to 150,000 RMB. Parents, while generous, are increasingly cautious about unrestricted spending, hence the fixed allowance model.
Self-Made High Earners: These are well-educated professionals who have succeeded in entrepreneurship, tech, or finance. They earn their own money and are discerning about their purchases.

Market Trends Among Younger Buyers

Concentration on Top Brands

Unlike older generations, Millennials and Gen Z gravitate toward established names like Rolex, Audemars Piguet, Omega, Cartier, and IWC. Swiss sales rankings show top brands capturing an ever-increasing share. Rolex, for instance, saw explosive growth and in 2021 alone surpassed the combined sales of all Swatch Group brands.

Polarization of Price Points

Young consumers view watches not just as timekeepers but as social tools that signal status and style. They either opt for smartwatches like the Apple Watch or jump straight to high-end mechanical pieces priced above 30,000 RMB. Mid-range traditional watches are losing ground, with no clear turnaround in sight.

Why Courting the Youth Often Fails

Despite their spending power, young luxury consumers have diverse interests and limited watch budgets. Many buy one iconic piece—like a Rolex Submariner or an Audemars Piguet Royal Oak—and then stay away from the market for years. For them, a watch is a necessary accessory, not a passion. This leads to a concentration of purchases among a few top brands, leaving little room for others.

Attempts to Attract Youth and Their Pitfalls

Product Diversification: Brands like Rado introduced the Captain Cook to tap into the sports-luxury trend. However, creating a new line is time-consuming, and it often fails to elevate the brand's overall image because it's seen as following trends rather than innovating.
Re-pricing Strategies: Lowering entry prices can boost short-term sales but risks diluting brand perception and alienating existing customers.

So far, no brand has successfully repositioned itself to win over young consumers. The internet, despite its promise of transparency, has actually amplified polarization. Algorithms push popular content to the top, making it harder for lesser-known brands to gain visibility. As a result, consumers default to the same few names—'one Rolex is enough' mentality prevails.

Lessons from Fashion and a Path Forward

In fashion, brands have successfully engaged youth through streetwear trends, collaborations, and artist partnerships. The watch industry, however, moves slowly. When watch brands finally attempt to adapt, they often find that young consumers remain unmoved. The famous 'Li-Ning' case, where a sportswear brand tried to appeal to Gen Z with a '90s-themed line, failed to resonate—a cautionary tale for watchmakers.

Instead of desperately chasing trends, brands should focus on building iconic products and staying true to their heritage. A recent conversation with a friend at a leading sportswear brand revealed that cutting marketing spend and skipping new product launches during Double 11 resulted in flat sales but significantly higher profits. This raises the question: is all the effort to chase young consumers just 'busy work'?

For high-end watch brands, the key may lie in creating distinctive, timeless pieces that command respect, rather than pandering to fleeting trends. By maintaining authenticity and cultivating a strong brand image, they can attract young buyers on their own terms.