Three sleek and gleaming second-hand watches are presented on a simple tray for a customer’s perusal. Luxury, artisanal pieces, their value is astronomical – collectively worth just over $1 million and increasing by the day – elegant symbols of a world awash with Covid recovery cash with prices for prestige real estate, cars, jewels, art and watches soaring into the stratosphere.
The three watches, (models by Patek Phillipe, A Lange & Sohne and F.P. Journe) are on display in the sleek Hong Kong showroom of WatchBox, an e-commerce watch platform with a global presence. Now billed as a world leader in the field with an estimated worth of close to US$1 billion, WatchBox in November raised a further US$165 million from investors for expansion in a market now bulging with watch buying options – from online auction houses to social media forums to e-commerce retail platforms.
With roots in Asia and the US, WatchBox buys, refurbishes, authenticates and sells luxury watches – it’s a booming business, and a perceived shortage of many watch models means collectors will pay up big for second-hand or “pre-owned” watches (sometimes prices many multiples of the listed prices for brand new models).
“When we started in 2017, this WatchBox idea, they were estimating market size was US$5 billion,” says chairman and co-founder Liam Wee Tay, 62, a Singaporean industry veteran who now lives in Hong Kong. “So nobody was talking about it; they were just second-hand watch dealers, which have existed forever.” These days, the market growth is spell-binding. Tay thinks second-hand watch market is now worth US$20 billion and McKinsey has estimated it will grow to between US$29 and US32 billion by 2025.
The Rolex Oyster Perpetual comes in many colours
“When you’re printing a lot of money and when you’re creating billionaires overnight, I think that’s a bubble,” Tay says of the world’s effervescent markets, including the watch market. “So people are looking at real assets to put their money into, that could also be one of the reasons they start putting into money in real estate, watches, cars – things that are valuable. Then it’s multipurpose – as an investment and also a hobby and a passion. This is a strange time we’re living in. It’s interesting to watch it develop.”
Tay, who once ran a retail jewellery chain in Asia, says the extraordinary surge in second-hand watch prices has fuelled some potentially dodgy on-line dealing.
“A lot of these places are called marketplaces,” Tay says of the on-line watch platforms where sellers can post a photo of an item for direct sale and then possibly provide an inferior or broken or faked product, leaving the buyer with little recourse.
WatchBox itself has had to deal with a handful of fakes in the past. “There have been a few cases where they ship us a fake watch and try and get a deal done,” Tay says. The frauds are partly in the nature of the transactions: sellers can retreat behind fake social media identities and it can be easier to simply accept the scam than try and fight it, particularly for international buyers.
“Everything is on consignment,” Tay says. “The seller posts and the buyer tries to buy it online and there’s no guarantee in terms of the condition of the watch, the quality of the watch. There’s a lot of misunderstanding or unhappiness.”
Recent watch-collector unhappiness of a different type has been vented by consumers who want to buy new models of various stainless steel sports watches, including certain Rolex models (such as the Daytona), or the Patek Philippe Nautilus and the Audemar Pigeut Royal Oak. Although these models are almost unobtainable new from dealers, they can sell second-hand for double or triple the listed price, and there have been allegations of scalping and flipping.
Tay thinks this shortage of certain new models is a recent phenomenon and result of limited production and pent-up demand for certain Swiss luxury models, particularly stainless-steel sports watches.
“Sports models have always in hot demand,” he says. “After Covid and the world went into this lockdown, I think it must have affected the supply chain and demand was pent up. These past two years, you see that – it doesn’t leave a nice taste in the mouth for all the consumers.”
Without the opportunity to buy new, many keen buyers turn to the occasionally uncertain world of buying second-hand online, and hope they avoid a “Frankenwatch” of cobbled-together bits and pieces or a watch with a broken movement that simply doesn’t work.
Tay adds that novice watch collectors appreciate the personal advice and guidance WatchBox can provide, and they can rest easy because the firm provides a global two-year warranty on watch purchases. “The whole idea is to create a trusted and safe environment for the customer so they can enjoy their hobby, their passion, with peace of mind.”
WatchBox specialises in post-1980s watches, although the firm does market a few vintage models. The company buys watches directly from owners (not via auction, Tay says), authenticates, refurbishes and then sells them – either online or via the firm’s bricks-and-mortar showrooms in cities around the world.
Customers who choose to visit in person, in places like the Hong Kong showroom in the Central district, meet a company representative, view and handle watches, and discuss models’ history and value. WatchBox has also made and posted around 5000 videos about watches.
Experts can also help collectors with advice on from lesser-known watch brands that may later explode in value. Smaller watch brands to keep an eye on, Tay and his colleagues say, include F.P. Journe, H. Moser, Rexhep Rexhelpi and DeBethune (WatchBox made a major investment in DeBethune in August).
Tay says there is a big pool of unused watches in the world, waiting to be sold or traded. Families are often reluctant to dispose of luxury watches, even if they’re not going, so they lie neglected in drawers and boxes, gaining in value and becoming something of a “sleeping asset”.
“A luxury watch has an intrinsic value,” Tay says. “Grandfather’s broken Rolex stays in the family and they just pass it down. The market has begun to realise and appreciate that.
“That’s where Watchbox comes in. We said alright, we’re going to make that experience very pleasurable for you. Don’t look at this second-hand market, where they have all the worst practices, we bring a service to you which is white-glove.”