Local firms losing time to foreign watchmakers
About 40 years ago, most Chinese dreamed of owning a Shanghai-branded watch. Nowadays, made-in-China timepieces no longer feature on Chinese wish lists.
Watches are no longer just for keeping time and instead are seen as something of a status symbol. And Chinese watchmakers are losing out to their foreign rivals.
Luxury Swiss brands such as Tag Heuer and Longines have boutiques on many city high streets, while counters in prime locations of many department stores only display fashion and sport watches like Casio and Swatch.
Chinese watches account for 70 percent of the market share in terms of sales volume, but they only occupy 30 percent of the total value, according to Ministry of Commerce statistics.
Industry insiders say the value of a Swiss-made watch is 224 times higher than a Chinese one.
China's high-end watch market is dominated by Patek Philippe, Breguet, Audemars Piguet and Vacheron Constantin. The medium-end is taken up by Swiss brands such as Rolex, Omega and Jaeger-LeCoultre. And Japanese brands like Citizen and Seiko and the numerous local brands compete for the lower end of the market.
Outdated technology, not keeping up with trends and price wars are the main problems in the local industry, Hao Huiwen, deputy general manager of Shenzhen Fiyta (Group) Corp Ltd, was quoted as saying by China Economic Weekly.
Fiyta is one of China's top four watch brands, along with Rossini, Ebohr and Tian Wang.
Meng Keren, chairman of the China Horologe Association, said the local industry is still competing for the low-end market and has little brand awareness, according to the China Economic Weekly report.
There are currently 200 Swiss watch brands in the world, and a number of Japanese players. But hardly any of the world's well-known brands are from China, although the country is a large exporter in terms of volume.
Local manufacturers cannot beat either the Swiss or the Japanese firms.
But the Beijing Watch Factory Co Ltd is on an adventure to reach the high-end market. The firm brought four expensive watches to this year's Basel International Watch and Clock Show, the world's largest watch fair.
All four are limited editions inspired by traditional Chinese culture and the Olympics, and are equipped with the factory's own technology on Tourbillon.
The Tourbillon mechanism, invented more than 200 years ago by Abraham-Louis Breguet, is one of the most difficult watches to make and is extremely complex and costly.
The move is actually Beijing Watch Factory's second trial. Last year, General Manager Miao Hongbo brought a sole-edition product, the Dragon and Phoenix Tourbillon Watch, to Basel, which was later sold for 1.08 million yuan to a local collector.
It is feasible for domestic manufacturers to enter the high-end market by connecting the 5,000-year Chinese history and culture with contemporary watch-making technology, said Liu Xingli, editor-in-chief of Trendstime magazine.
He said local manufacturers have the advantage in traditional Chinese arts such as micro-carving and cloisonne enamel, which are essential for competing in the high-end market across the globe.
Meanwhile, local watchmakers have solid production and research and development bases in traditional mechanical watches, and can maintain a consistently high quality of movements, since many of them have a long history of exporting mechanical movements abroad, Liu noted.
(China Daily 04/12/2007 page15)
