Long-term value will be the key to win Chinese consumers —— Julie Laulusa Interviewed by Europa Star

"The key to winning over Chinese customers will increasingly be cultural. The country is seeing profound changes in the structure of its distribution and buying habits." 

Dr. Julie Laulusa

Managing partner in Mainland  China

Member of the Mazars Group Executive Board

What are the most important developments to highlight in the Chinese watch market?

An important evolution concerns purchasing behaviour. Buyers of branded and luxury watches are much younger than in the West, between 25 and 40 years old. As everywhere, the development of e-commerce has been accelerated by the pandemic. But the particularity in China is that it is used by all generations. The maturity of technology has developed very rapidly with the pandemic and some second and third tier cities have seen their relevance increase in terms of luxury consumption. Watches must not only represent personal taste and social status, but increasingly embrace a notion of investment. People prefer to invest in timepieces that they can pass on to their heirs or resell with a financial gain. The notion of transmission is developing. Chinese customers are increasingly looking for models that embody a form of timeless elegance. Before, they didn't necessarily pay attention to this long-term value.

Could you share other findings?

Another important trend is the increasingly upmarket nature of Chinese watches, just as we see in sports shoes or beauty products. This is not to say that Chinese watches are attracting buyers, just that there is a recognition of the technology of Chinese timepieces. In the past, consumers rejected Chinese watches altogether. This is a progression, not a rush. Another major development is the popularity of live streaming, a phenomenon that emerged significantly during containment in 2020. This channel is increasingly attracting international brands, whereas at first it was mainly Chinese brands.

The government seems to want to encourage the consumption of domestic products. Is this a realistic development for the watch industry as well?

The government wants Made in China to become a label synonymous with quality, design, technology and innovation. For Chinese watches, it is di!icult at this stage to replace the Swiss brands. The Chinese brands should not be underestimated, but this is a matter of decades. A whole technical infrastructure is still missing. On the other hand, the phenomenon of national pride is particularly marked among Gen Z, the youngest generation. This is an important point that could become a game changer in the long term. According to our surveys, Gen Z are no longer buying the brand’s products so much as the brand’s values. In the past, Chinese consumers paid little attention to service and focused on buying. Today, younger people demand respect, smooth communication, cultural exchange and personal service.