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India Luxury Watch Market: Introduction
The luxury watch market in India is experiencing significant growth, driven by a booming economy and changing consumer behavior. As incomes rise, Indians increasingly indulge in high-end collectibles like art, rare wines, sneakers, and especially luxury watches. These timepieces have become a new obsession, particularly among millennials and Gen Z, who see them as a mix of fun, status, and exclusivity. For high-net-worth individuals (HNIs), luxury watches are no longer just keepsakes; they are evolving into valuable investment assets.
According to a recent Knight Frank report, luxury watches will emerge as the top investment choice for affluent Indians in 2023, surpassing art. A Deloitte survey also revealed that 78% of Indian consumers plan to buy a watch in the next year. Clearly, the luxury watch market in India is heating up.
How Did India Luxury Watch Market Grow So Fast?
Trade and Economic Partnerships
One of the key drivers of this boom is the Trade and Economic Partnership Agreement (TEPA) between India and Switzerland. This deal will gradually eliminate customs duties on Swiss watches over the next seven years, a huge incentive for the Indian luxury market. In 2023 alone, Swiss watch exports to India exceeded CHF 200 million, and the market has been growing at an impressive 11% annually for two decades. This agreement will likely fuel even more growth in the coming years.
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Brand Consciousness Among Indian Consumers
About 60% of Indian consumers purchase luxury goods annually, and watches are a significant part of that trend. Unlike global consumers who focus more on price-to-value, 64% of Indian buyers prioritize brand image, making prestigious Swiss brands like Rolex, Patek Philippe, and Audemars Piguet particularly popular in India. This brand loyalty, combined with rising disposable incomes, is driving the luxury watch market to new heights, with the sector already valued at $7 billion and growing rapidly.
The Rise of Pre-owned Luxury Watches
The pre-owned luxury watch market is also gaining traction in India, with over 50% of consumers open to purchasing second-hand watches in the near future. Cost savings and sustainability are key factors driving this trend, contributing to even more demand for luxury timepieces.
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Is Investing in Luxury Watches Worth It?
While luxury watches are seen as a lucrative investment, they differ from traditional assets like stocks and bonds. The value of a luxury watch depends on several factors, including brand, rarity, and trends. Iconic brands such as Rolex, known for their craftsmanship and limited production, have maintained their value over time. For example, Rolex’s stainless-steel models have been valuable since the 1970s due to their meticulous production process and scarcity.
However, luxury watch investments can be unpredictable. The WatchCharts Overall Market Index, which tracks the prices of 60 top luxury watch models, has declined by 8% in the past year. This is a stark contrast to the surge in prices seen in 2021 and 2022, when the index skyrocketed to over 95,000. Despite the recent dip, long-term trends remain strong, with luxury watches appreciating by 138% over the last decade, according to the Knight Frank Luxury Investment Index.
Key Factors for Watch Investments
- Brand and Rarity: The value of luxury watches is often tied to the brand’s reputation and the rarity of the models. Watches from brands like Rolex and Patek Philippe are known for their craftsmanship and limited production, making them highly sought after in the market.
- Trends and Popularity: The value of luxury watches can fluctuate based on trends, celebrity endorsements, and cultural moments. Being aware of which models are in demand can make a significant difference in their resale value.
- Patience: Investing in luxury watches is a long-term game. While some models may appreciate quickly, others may take decades to see a significant increase in value. For example, Paul Newman’s Rolex Daytona sold for a record $17.75 million in 2017, but it took years for that model to reach such high value.
- Hidden Costs: Investing in luxury watches comes with additional expenses like insurance, storage, and maintenance, which can eat into your returns. These factors should be considered when deciding whether to invest.
Conclusion
Luxury watches offer a unique blend of style, status, and investment potential. For many, the joy of owning and wearing these timepieces adds value beyond just financial returns. Although short-term gains may be modest, luxury watches provide a way to diversify investments and offer a stable alternative to volatile stock markets.
With the market poised for continued growth, thanks to trade agreements and changing consumer preferences, India’s luxury watch sector is one to watch closely—whether you’re in it for the style or the investment potential.
