Analysis of a luxury market report by Bain & Company suggests that the current secondary market for watches is already worth more than $17 billion.
That estimate may not be high enough, according to Philipp Man, co-founder of Chronext, who thinks that thousands of small-to-medium sized companies are trading in watches worth millions more.
“I think it is bigger than $17 billion,” Mr Man tells WatchPro in this months Big Interview.
“Switzerland exports watches worth something like CHF 20 billion per year; that is wholesale price. Add 20% sales tax and margins and you get watches worth around CHF 50-60 billion at retail prices. This is on top of watches worth around CHF 20 billion that are already being held in stock at any time around the world, so every year there is new stock in the market worth CHF 80 billion. That level has not changed much in the past 10 years, which means that CHF 800 billion of new watches have been in the market over the past decade,” Mr Man calculates.
“Watches do not go bad, so you can add watches from 10 years before that, and that’s before we get into vintage watches. If you accept that there is inventory worth CHF 800 billion, including pre-owned inventory, around the world, and 5% of that gets sold every year, that is realistic,” he continues.
Despite a number of secondary market specialists now trading watches worth tens of millions of dollars per year, none measures up alone against thousands of smaller operations making a living from pre-owned watches.
“Pre-owned is largely sold from pawn shops, small regional auction houses as well as Christies and Sotheby’s, Ebay, and all of the new players we are talking about and I can easily see how this becomes a CHF 50 billion per year market within the next 10 years,” Mr Man predicts.