What’s with the craze over some watch models, and why can’t anyone seem to get their hands on them?
There's never a dull moment in the world of luxury watches. The Quartz Crisis usually comes to mind first, of course, but one needn't look so far into the past. Just over a decade ago, the Swatch Group's decision to only supply complete movements to external buyers caused a cascade effect that saw brands scrambling to develop their own calibres. In turn, this gave rise to the narrative that in-house movements are superior and/or more legitimate.
More recently, the advent of smartwatches prompted brands to respond with their own takes, from hybrid movements to "smart" straps. The threat posed by smartwatches on demand for mechanical ones never came to pass, and most of these efforts were abandoned.
The latest trend concerns scarcity. Consider Patek Philippe's current version of the Nautilus ref. 5711, which has a green dial to replace the previous iteration's blue. Walk into any authorised dealer for the brand, and you'll quickly learn that stocks are unavailable. The salesperson attending to you will offer you a spot on their waitlist instead. You could receive the timepiece eventually—eight years is a commonly cited waiting time—if it hasn't been discontinued by then, that is. How the waitlist works at any dealer works is opaque though; perhaps “black box" is a more appropriate term. Here's the kicker: should you be lucky enough to be able to buy said watch today, you could sell it on the secondary market immediately for anything between eight and 10 times its retail price of S$46,000. What gives?
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Demand and Desirability
Clearly, there is a disproportionate level of demand for the Nautilus ref. 5711 that has spilled over into the secondary market, which explains the hefty premium it commands there. Neither Patek Philippe nor the Nautilus are alone in this though. Around the world and to varying degrees, watches from Rolex's Professional collection (i.e. its "sports" models) and Audemars Piguet's Royal Oak lines are facing similar shortages. To a lesser extent, a few other brands are experiencing this as well. But let's keep the discussion to these three manufacturers for now, and examine the factors that have led to the present state of affairs.
An easy answer can be gleaned with the reductionist approach—the price for any item is a function of its demand and supply, and demand has clearly risen in the past few years. Several reasons account for this. The most recent is obviously the ongoing pandemic, which has shifted consumption patterns. With travel spending curtailed due to border closures, many consumers have turned to luxury goods instead. In Singapore, for instance, many brands have (informally) shared with us that domestic spending has increased in 2020 and 2021, sometimes to the extent of more than making up for the shortfalls in revenue from tourists.
Beyond just the recent impacts of Covid-19, however, the winds of change have already been blowing elsewhere for several years. Horology and its related pursuits, which used to be the domain of aficionados hanging out in person or on specialist forums, have entered the mainstream. Information is now democratised, and the asymmetry that used to define the industry has largely disappeared.
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