worldwatchreport™ 2013 key findings

The Leading Market Research in the Luxury Watch Industry. Since 2004

The Leading Market Research in the Luxury Watch Industry!Since 2004!

!

2013!

BASELWORLD KEY FINDINGS APRIL 2013


A MARKET STUDY LIKE NO OTHER.

© Digital Luxury Group, DLG SA, 2013 2

§  9th Edition

§  62 Luxury Watch Brands §  20 Markets, including BRIC

§  1’500 Models and Collections

§  250 Brand Ambassadors

§  Based on DLG’s proprietary consumer interest tracking technology DemandTracker™

§  Published in partnership with Europa Star and the gracious support of the Fondation de la Haute Horlogerie For more information on

methodology: www.worldwatchreport.com


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TRACKING 62 OF THE MOST RENOWNED LUXURY WATCH BRANDS.

© Digital Luxury Group, DLG SA, 2013


© Digital Luxury Group, DLG SA, 2013 4

IN THE TOP 20 MARKETS ACROSS THE GLOBE.


§  Global consumer interest for luxury watches grew +3.3% §  China consolidates its leadership position with 1/4 of all global

searches, growing by +36.0% §  BRIC markets show greatest year-to-year evolution (+33.0%) §  Swatch Group (+9.8%) overperforms luxury conglomerates §  “Haute Horlogerie” (+10.1%) and “Watch and Jewelry” (+7.7%)

categories growing the fastest §  Gap between industry leaders Rolex and Omega narrows further

5 © Digital Luxury Group, DLG SA, 2013

KEY TRENDS 2013 (1/1).


§  Chronographs and Tourbillons are the two most popular product segments

§  Iconic collections from Audemars Piguet, Cartier, Chanel, Omega and Rado shine in models ranking

§  Sportsmen make the biggest gains in the 2012 watch brand ambassador rankings

§  Facebook increasingly influential but engagement stagnates §  Watch forums most engaging platform among collectors and

aficionados

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KEY TRENDS 2013 (1/2).


- All calculations are based on the 62 brands featured in the report - Date range for all data is Jan-Dec. 2012 and Jan-Dec. 2011 for Y/Y evolutions


GLOBAL CONSUMER INTEREST FOR LUXURY WATCHES GREW+3.3%.



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§  China consolidates its leadership position with 1/4 of All Global Searches

§  BRIC Markets Show Greatest Year to Year Evolution +33.0%

§  Early Signs of Demand Decline in Historical Mature Markets



For the second year in a row, China consolidates its leadership position ahead of the USA. One out of four luxury watch searches originates from China.

Global demand growth was fueled by BRIC Markets with the highest year-to-year increases in China (+36%), Brazil (+29.4%), Russia (+28.5%) and India (+19.7%).

Early signs of demand decline were recorded mostly in historically established and mature markets: the United States (-11.6%), Europe (-8.3%) and Japan (-13.6%).



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“The numbers confirm a shift in demand growth drivers which started several years ago and which

shapes the whole industry further towards localization. From product design, brand

positioning to in-store service, luxury watch brands need to quickly adapt to client preferences

from emerging markets to grow further”

- Florent Bondoux, Head of Strategy & Intelligence, Digital Luxury Group



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§  +36.0% growth led by Prestige category brands (+63%). §  Rolex (#2, +97.8%), Cartier (#4, +71.6%) and Omega (#1, +70.4%) grew the fastest notably due to higher exposure from inner-China regions where the fastest growth rates were observed. §  Rolex overtakes Longines, landing in 2nd place. §  Western provinces showed the fastest growth rate in searches for luxury watches with +8.4%.

+36%

Top 3 Models

De Ville Omega

Constellation Omega

Ballon Bleu Cartier

CHINA CONSOLIDATES ITS LEADERSHIP POSITION WITH ¼ OF GLOBAL DEMAND.


Market growth Top 3 Brands


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“Despite a reported slowdown in the region often attributed to the reluctance towards government

gifting, we can’t realistically forecast a significant market decrease in the mid-term as the fast

growing middle-class, quick wealth creation from tier 2 and 3 cities as well as increasingly

important travel spending are strong drivers that are here to stay.”

- Pablo Mauron, General Manager, China, Digital Luxury Group


CHINA CONSOLIDATES ITS LEADERSHIP POSITION WITH ¼ OF GLOBAL DEMAND.


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SWATCH GROUP OVERPERFORMS LUXURY CONGLOMERATES.

§  Strong performances from Omega, Longines and Rado in rapidly growing BRIC markets substantially contributed to Swatch Group performance figures. §  LVMH and PPR watch brands analyzed in the report posted average declines of -4.4% and -10.6% respectively. §  Richemont Group remains close to the global positive trend (+2.1%). © Digital Luxury Group, DLG SA, 2013

Evolution of Luxury Conglomerates vs. Independent Brands Y/Y 2011-2012


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HAUTE HORLOGERIE & WATCH AND JEWELRY CATEGORIES ARE GROWING THE FASTEST. Evolution of Category Search Breakdown Y/Y 2011-2012

.

§  The Haute Horlogerie category grew the fastest (+10.1%) thanks to brands such as Patek Philippe (#10, +16.7%), Vacheron Constantin (#19, +31.5%) and Breguet (#24, +8.6%) – The Watch and Jewelry was the second best performing category, growing by +7.7%, thanks to solid performances from Cartier (#3, +11.6%) and Piaget (#18, +12.94%). §  Exposure to Asia played a crucial role in fueling categories’ growth with 44% and 46% of demand respectively.



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TOP 15 MOST SEARCHED LUXURY WATCH BRANDS GLOBALLY.

.



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TOP 10 FASTEST & SLOWEST GROWING LUXURY WATCH BRANDS. 2012 vs. 2011

.

-28.42%

-20.56%

-18.26%

-16.96%

-15.49%

-15.29%

-12.02%

-11.22%

-11.07%

-10.63%

3.27%

8.63%

11.03%

11.61%

12.94%

14.37%

16.71%

18.76%

21.48%

31.58%

60.98%

Baume & Mercier

Louis Vuitton

Ebel

Tudor

Panerai

Zenith

Breitling

Bulgari

Maurice Lacroix

Girard-Perregaux

Global

Breguet

Hublot

Cartier

Piaget

Blancpain

Patek Philippe

Omega

A. Lange & Söhne

Vacheron Constantin

Richard Mille



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GAP BETWEEN OMEGA AND ROLEX NARROWS FURTHER.

Historical search market share evolution at constant perimeter (25 brands, 10 markets)

§  Rolex continues to lead the Global ranking thanks to its domination in mature markets such as the US and Europe as well as the Middle East and India. §  Omega’s continuing leadership in large, fast developing markets such as China, Russia, and Latin America has helped it gain ground on industry leader Rolex.



GAP BETWEEN ROLEX & OMEGA NARROWS FURTHER.

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“Omega is on its way to create a shadow over

Rolex in the long run. Major sport event sponsorships, ubiquitous celebrity endorsements

and a competitive product offering are some of the key ingredients for the Swatch Group brand to grow further. This could ultimately end up in reaching Rolex’s unmatched popularity 3 to 5

years from now.”

- David Sadigh, Founder & CEO, Digital Luxury Group



CHRONOGRAPHS AND TOURBILLONS ARE MOST SOUGHT-OUT PRODUCT SEGMENTS.

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§  Brands shine in different product segments and geographical zones. §  TAG Heuer is most sought-after for chronographs followed by IWC, remarkably rising two spots in 2nd place, ahead of Omega. §  Patek Philippe remains unrivalled for Tourbillons -related searches but was approached by Hublot (#2; up 3 spots) and rising star Richard Mille (#3, up 13 spots), which saw the strongest increase in brand interest in 2012.


Top 2 Chronograph Brands Top 2 Tourbillons Brands


CONSUMER INTEREST IN ICONIC MODELS CONFIRMED.

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Haute Horlogerie #1 22nd Global

Royal Oak Audemars Piguet

Watch and Jewelry #1 8th Global

Tank Cartier

Couture #1 13th Global

J12 Chanel

Prestige #1 1st Global

High Range #1 25th Global

Seamaster Omega

Jubilé Rado



CINEMA/TV & SPORTS LEAD AMBASSADORS’ RANKINGS.

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As a result of the “Olympic Games” effect, sportsmen Michael Phelps (#5 with Omega, up 31 spots), Usain Bolt (#6 with Hublot, up 25 spots) and LeBron James (26th for Audemars Piguet, up 32 spots) are among the highest gains.

§  Sportsmen make the biggest gains in ambassador rankings

§  Cinema/TV remains ambassadors’ most important category Cinema/TV remains the most popular activity as world famous Aishwarya Rai (#2 with Longines, up 3 spots), John Travolta (8th with Breitling, up 7 spots) or Jet Li (9th with Hublot, up 4 spots) continue generating higher consumer interest with 54.8% of total brand ambassador searches.

Credit: Michael Sohn REUTERS/Stefano Rellandini



FACEBOOK INCREASINGLY INFLUENTIAL BUT ENGAGEMENT STAGNATES.

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§  Brands regrouped nearly 50 million fans on Facebook, growing by +135%. §  TAG Heuer leads watch-only brand ranking with 1M+ Fans. §  Brands stagnate in average interactions as engagement rate stabilizes (0.78% to 0.82%).



WATCH FORUMS MOST ENGAGING PLATFORM AMONG COLLECTORS & AFICIONADOS .

22 © Digital Luxury Group, DLG SA, 2013

Top 3 Brands on Watch Forums

§ Among top 3 analyzed watch forums, Chinese platform iWatch365 captures the lion with 49% of the 95 million total forum posts views, closely followed by pioneer TimeZone (45%) and PuristSPro (6%). § All 3 forums considered, Patek Philippe, Jaeger-LeCoultre and Zenith are the most popular.

Share of Posts Views by Forums 2012


About Digital Luxury Group Digital Luxury Group (DLG) is the first international company to provide luxury industry market intelligence and use this strategic viewpoint to create and implement digital marketing and communication strategies for luxury brands. With headquarters in Geneva, the company has offices in New York and Shanghai. Since 2004, DLG has been publishing the WorldWatchReport™ a baseline market study for the watchmaking industry in partnership with Europa Star and with the precious support of the Fondation de la Haute Horlogerie.

Contact: Florent BONDOUX

Head of Strategy & Intelligence [email protected]

Laetitia HIRSCHY WorldWatchReport™ Project Manager

[email protected]

Digital Luxury Group, DLG SA

7 Avenue Krieg CH-1208 Geneva

Switzerland

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WHO ARE WE?

Visit our website to get detailed information: www.worldwatchreport.com or www.digital-luxury.com


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