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Chinese Watches - The Next Phase


Usil

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We have been enjoying a plethora of great looking and semi-quality plus some not so good quality reps these past 14 months. This is likely to continue but for how long, who knows. At some point in the future, when the Chinese get beat up enough and finally have to succumb to the pressure of complying with international laws in manufacturing they will use their considerable manufacturing power to start making their own branded watches, possibly similar but maybe even better in design and function.

I predict this is the next phase of watches from China. Why not - they can make some pretty nice looking reps - why not start making originals with all the quality and workmanship you can get from an industry finally having to compete in the market place? - And at a price 10 to 20% of what we pay for Gens today from Breitling, Omega and Panerai.

Real watch manufacturing! Design department, movement department, assembly; quality control, high quality standards, sapphire crystals, super lume, water proof with guarantees and slick world wide marketing. They are quite capable of doing this. Same goes for manufacturing cars. Given time, like the Japanese, they can enter and impact this market too.

How much time? Many will speculate in this area but it is only a matter of time. Just look at the percentage of legitimate (every day) goods already entering the global market from China. Luxury items are next.

Usil

Edited by Usil
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@Usil: they have already started this many years ago. I went to GZ fair 2 years ago and met with a few manufactures in China. They can make prototype drawing and what the watch will look like in just a matter of hours. Final product to your specs will be done in just days.

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Yes and no....

No: If it doesn't say 'Vuitton' or 'Hermes' (or Rolex, Omega, Panerai, etc.) then no matter how good it looks (and how cheap it sells for) it won't be luxury.

Yes: Given enough time, it's possible that the Chinese (like the Japanese with electronics and automobiles) will be able to corner a certain segment of high-end sales on certain products. Watches? Only time will tell.

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No matter how good they are, no matter how nice the design, if they continue to copy designs and put a new name on them they will still be chinese replicas or homage watches. If they start their own unique designs they still won't live up to the reputation or have the respect of swiss watches.

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Yes they have the manufacturing ability to do this from CAD and the infrastructure to seriouly embark in this area of manufacturing. They are making mega-dollars right now with t-shirts and undies so it will take a little time for them to consider entering an established high-ticket items where they have to compete with people who care about the name on the brand but when they make their first branded watch that knocks the socks off of exiting watches in the market for USD 400.00 they will slowly be taken seriously when Watch Trade Journals start performing the teardowns and reviews with comparisons to established watches in the high end market. This will also put serious pressure on the rep market.

Usil

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This is not going to happen over night. You can not create any item that seriously challenges the establishment without a trial period (lasting years). Look at the first Japanese cars in the 70's. Look at them now. Don't we associate brand names like Toyota and Honda with quality ever good as Mercedes or BMW?

Usil

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This is not going to happen over night. You can not create any item that seriously challenges the establishment without a trial period (lasting years). Look at the first Japanese cars in the 70's. Look at them now. Don't we associate brand names like Toyota and Honda with quality ever good as Mercedes or BMW?

Usil

Funny, I was thinking about this just the other day. I remember when Japanese manufactureres first began to export Hondas, Datsuns and Toyotas to the US in the mid 70's. The cars were junk... my friends mini-bike had bigger wheels than those cars. Didn't take long for them to get competitive did it? Now they feature luxury lines like Accura, Lexus, and Infinity... really an amazing step in a relatively short amount of time. Still going from manufacturing proficency to design creativity is a long way to go. As Ryannon said, only time will tell.

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The first Honda car I saw was in the 1970's - a funny little 2 seat car very similar in shape to today's Smartcar but about 1/2 the size. It had a 4 cyclendar motorcycle engine in it. POS. What a long way they have come.

Usil

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At some point in the future, when the Chinese get beat up enough and finally have to succumb to the pressure of complying with international laws in manufacturing

I am curious - what makes you say the Chineese are getting beat up. China has a trade surplus with all western countries desirous of access to the largest consumer market in the world. The U.S. and E.U. have made no headway on the issue of the trade imbalance. They merely posture and complain for the home crowd. Human rights issues are not even on the table. Who is getting beat up and "succumbing to pressure"?

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China has a trade surplus
Did not mention anything about trade surplus.

no headway on the issue of the trade imbalance

Ditto on trade imbalence.

merely posture and complain
No where near talking about posturing ...

Human rights issues

Are you reading the post I just posted?

Who is getting beat up and "succumbing to pressure"?

To answer I simply have to complete the sentence part you neglected.

...get beat up enough and finally have to succumb to the pressure of complying with international laws in manufacturing

Usil

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It may happen, but not to the degree of Japanese cars. They might have the ability to make some fine watches, but everything about it's product's marketing. There is something just not appealing about a "Chinese" luxury watch. China manufactures way more common goods that any of us can imagine. They manufacture for other companies' products. Many famous clothing lines, computer parts/media, furtiture items, toys etc.. are made in China. They have the knowhow in building and design, but no clue how to market it. It took many decades for Chinese film industry just to correctly market their movies to the US. They have become the second largest economic superpower in the world and would easily take out the US if they had proper marketing and retail knowhow. Just think of this for a moment; a Swiss copy movement made in China, or an authentic Chinese movement? Most would consider the word "Swiss" a better buy.

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I am curious - what makes you say the Chineese are getting beat up. China has a trade surplus with all western countries desirous of access to the largest consumer market in the world. The U.S. and E.U. have made no headway on the issue of the trade imbalance. They merely posture and complain for the home crowd. Human rights issues are not even on the table. Who is getting beat up and "succumbing to pressure"?

There is no doubt that The Chinese Govt is being pressed by the WTO, US and other foreign govts to crack down on counterfeiting and is slowly beginning to respond. Eventually they will succumb, but it will take some time. Interesting article here:

http://www.iht.com/articles/2004/12/02/rfake_ed3_.php

and more recently here:

http://seattletimes.nwsource.com/html/chin...napiracy12.html

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It suddenly comes to mind that Airbus Industries have worked out some sort of tech-transfer deal with China, whereby a Chinese plant will be building the newest generation of Airbuses - prior to China offering their own models largely based on Airbus technology....

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jfreeman420,

You are not thinking long term enough. It will happen.

Usil

I'm sure it will happen, but these watches will never be held in as high regard as Rolex or Vacheron or Audemars. Cars are one thing. Most people who buy an automobile whether it's a honda or a mercedes want to have long term reliability and good gas mileage. The exceptions are the people who buy Ferraris and Lamborghinis. They could give a [censored] about the gas mileage and are happy to take it in for service once a month.

My point is, they may break into the mid level watch market and be very succesful. The $10,000 plus range is a bit more difficult due to the fact that people who buy watches for $10K, $20K, or $50K and above don't say hey my watch is quality and it will alst 50 years without service. They are saying hey look at me I am super rich and I have a Rolex. These brands have taken 100 years or more to build customer loyalty and reputation and brand recognition. The chinese may never achieve that.

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Yes I did read your whole post - you do not address the actual relationship as it stands between the western economies and China. I point out that western economies have accepted a disadvantaged trade position with China and opted to compromise principles for profit and entry opportunites to do buiness in China. I simply do not see how your point can happen. Who is beating up who? Nothing personal and no disrespect to you - I just disagree with your thesis and see the current Sino EU US continuing as it is now - advantage China. JMO

Did not mention anything about trade surplus.

Ditto on trade imbalence.

No where near talking about posturing ...

Are you reading the post I just posted?

To answer I simply have to complete the sentence part you neglected.

...get beat up enough and finally have to succumb to the pressure of complying with international laws in manufacturing

Usil

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