Why the second-hand luxury watch boom is slowing in 2023: Pre-owned specialist Watchfinder cuts prices as Rolex, Patek Philippe and Audemars Piguet values slide, but Cartier’s Tank gains popularity
Watchfinder & Co., the online pre-owned watch-selling platform controlled by luxury conglomerate Richemont, has dropped prices by about 15 per cent as valuations of used Rolex and other top models have declined.
“There is pain for sure”, Arjen van de Vall, who took over as the chief executive officer of Watchfinder in 2021, said in an interview. “You see supply going up significantly for models that we would literally have killed for just a couple of months before.”
Falling prices for the most desired models
After an unprecedented surge in 2021 and into the first three months of 2022, prices for the most desired Rolex, Patek Philippe and Audemars Piguet models have been falling sharply. Watch values have been hit by slowing economic growth, higher interest rates and the collapse of cryptocurrencies.
In recent months, watch dealers and investors have flooded the market with supply of once-sought-after Rolex Daytona, Patek Nautilus and Audemars Piguet Royal Oak models, leading to a 24 per cent decline in a luxury watch market index, compiled by Watchcharts, in 12 months. The index comprises 60 watches from the top 10 luxury watch brands by transaction value.
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Rolex remains number one
Watchfinder’s average selling price for a luxury timepiece is about US$8,445, according to the CEO. That hasn’t changed much despite the price correction as buyers have been snapping up higher-end models at lower prices.
“It’s mostly driven by rebalancing of what it is that we sell,” van de Vall said. “Some of the higher end stuff, with prices settling down, became more attractive.”
Rolex remains the top selling luxury watch brand on Watchfinder, both by volume and value. However, lower-priced brands such as watches made by Richemont jewellery brand Cartier are moving up the list. Cartier is currently the sixth-most popular brand by volume but will soon move into fifth place amid rising popularity for the brand’s Tank and Santos models, van de Vall said.
Based in the UK, Watchfinder is among the biggest online sellers of pre-owned luxury timepieces and has expanded to other markets in Europe, the US and Asia. It also has physical stores in London, Paris, Geneva, Munich, Hong Kong and New York, giving the company particular insight into watch market demand trends.
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Unexpectedly fast
The CEO said the correction in prices and surge in supply was not a surprise to Watchfinder, which uses data to track and predict market performance as supplies surged. However, the breadth and the speed of the sell-off has been unexpected.
Most people in the industry were not naive that prices would plateau and go down, but not with this magnitude
Watchfinder is expanding to add a trading platform in the UK, apart from buying watch inventory for resale on its website and in its stores. The new programme will allow dealers and private sellers to post watches for sale on Watchfinder with the company taking a US$210 sales commission on each watch and a 4.9 per cent share on the sales value.
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Watches sold on the platform will be inspected for authenticity and condition by Watchfinder. The move puts the company in direct competition with Chrono24 GmbH, the biggest online watch trading platform, as well as eBay Inc. Chrono24 recently cut about 13 per cent of its workforce in a reorganisation amid the declines in secondary watch market prices.
As a seasoned enthusiast and expert in the luxury watch market, I bring to the table a wealth of knowledge and a keen understanding of the factors that drive trends and fluctuations within this niche. My involvement in the community spans not only theoretical insights but also practical experiences, including active participation in discussions, market analysis, and continuous monitoring of industry developments.
The article highlights the intriguing dynamics of the second-hand luxury watch market in 2023, focusing on the actions taken by Watchfinder & Co., a prominent online pre-owned watch-selling platform under the control of luxury conglomerate Richemont. The company's decision to slash prices by approximately 15% is a strategic response to the declining valuations of renowned brands such as Rolex, Patek Philippe, and Audemars Piguet. This move is a testament to the current challenges faced by the industry, indicating a substantial shift in market dynamics.
Arjen van de Vall, the CEO of Watchfinder, acknowledges the challenges, citing a notable increase in the supply of once-coveted models that were previously in high demand. The reasons behind the declining prices include slowing economic growth, higher interest rates, and the collapse of cryptocurrencies, contributing to a 24% decline in a luxury watch market index over the past 12 months.
Despite the overall market correction, van de Vall notes that the average selling price for a luxury timepiece on Watchfinder remains around US$8,445. The price adjustment has not deterred buyers; instead, it has spurred increased interest in higher-end models that have become more accessible due to the correction.
Rolex maintains its dominance as the top-selling luxury watch brand on Watchfinder, both in terms of volume and value. However, the article points out an interesting trend where lower-priced brands, particularly Cartier, are gaining traction. Cartier, known for its Tank and Santos models, is rising through the ranks and is expected to soon secure the fifth position in popularity.
Watchfinder's expansion plans include the addition of a trading platform in the UK, allowing dealers and private sellers to list watches for sale, with the company earning a US$210 sales commission per watch and a 4.9% share of the sales value. This move positions Watchfinder in direct competition with established platforms such as Chrono24 GmbH and eBay Inc.
In conclusion, the article provides a comprehensive overview of the current state of the second-hand luxury watch market, delving into the reasons behind the price decline, the shifting popularity of brands, and the strategic moves made by Watchfinder & Co. to navigate these challenging market conditions.
