WorldWatchReport 2012 - SIHH Haute Horlogerie Preview

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

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

!

2012!

HAUTE HORLOGERIE PREVIEW


A MARKET STUDY LIKE NO OTHER. Since 2004, the World Watch Report has provided the luxury watch industry with an exclusive analysis of the leading brands, models and client preferences. The World Watch Report is based on more than 1 billion unaided client intentions entered into search engines. This search data is collected using Digital Luxury Group’s proprietary technology, and is translated into client intentions related to brands, models, distribution, replicas, price, accessories etc.*

*A detailed explanation of the methodology is available at the end of the document

© Digital Luxury Group, DLG SA, 2012 2



TRACKING 40 OF THE MOST RENOWNED LUXURY WATCH BRANDS.


IN THE TOP 20 MARKETS ACROSS THE GLOBE.


United States

Mexico

Brazil

Germany

United Kingdom

France

Spain

Switzerland

Italy

Saudi Arabia

United Arab Emirates

India

Thailand Singapore

Hong Kong

Taiwan

Japan

Russia

Qatar

China


•  15 Haute Horlogerie brands covered (out of the total 40 brands available in the full report)

•  Only key highlights and partial metrics provided

•  Full report on 40 brands to be released in March at Baselworld


RESEARCH SCOPE OF HAUTE HORLOGERIE MEDIA KIT.

Free document made for the solely purpose of the 2012 Edition of the Salon International de la Haute Horlogerie


China surpassed the USA as the leading market ~ for the first time since the study launched in 2004, China recorded the highest demand for high-end watch brands with 25% market share

IWC, Patek Philippe, Zenith are the category leaders ~ The top 3 worldwide Haute Horlogerie brands remain unchanged from the 2010 market figures gathering more than 50% of the worldwide market share

Jaeger-LeCoultre’s Tourbillon ~ The Le Sentier-based brand is currently the most in demand for highly technical keywords related to the search of “tourbillon” timepieces


THE HAUTE HORLOGERIE CATEGORY IN 2011 | KEY HIGHLIGHTS. See report on

P.9

See report on P.15

See report on P.19


Royal Oak vs. Reverso ~ Audemars Piguet’s Royal Oak overtook Jaeger-LeCoultre’s signature Reverso after 3 consecutive years in the first position

Singapore’s Collectors Hub ~ Singapore showed evidence of a very strong watch connoisseur market with 17.5% of demand directly associated to specific models

Impressive growth in mobile internet ~ The global market experienced a shift in media consumption with 17% of Haute Horlogerie searches performed through a web-enabled mobile device

Social media booming ~ IWC and Jaeger-LeCoultre proved to be the trend setters in both Western and Chinese social media


THE HAUTE HORLOGERIE CATEGORY IN 2011 | KEY HIGHLIGHTS. See report on

P.20

See report on P.29

See report on P.31

See report on P.23


GEOGRAPHIC SEARCH ORIGIN.


United States 21.23%

Mexico 0.65%

Brazil 1.04%

Germany 7.38%

United Kingdom 8.16%

France 6.84%

Spain 2.37%

Switzerland 2.74%

Italy 6.11%

Saudi Arabia 0.12%

United Arab Emirates 0.35%

India 1.13%

Thailand 1.51% Singapore 1.56%

Hong Kong 1.19%

Taiwan 1.15%

China 24.89%

Japan 6.14%

Russia 5.35%

Qatar 0.08%

The Relative Number of Haute Horlogerie Searches by Market

January to November 2011


GEOGRAPHIC SEARCH ORIGIN.


•  China surpassed USA as the leading market ~ for the first time since the study launched in 2004, China overtook the USA as the country exhibiting the highest demand for high-end watches, with a 25% market share

•  Strong foothold in the West ~ Demand from Europe and USA remained strong, gathering 55% of the total searches. Of note were early signs of decline from France and the US, experiencing drops of 1.4 and 5 percentage points respectively (at a constant perimeter)

•  South-East Asia leads midsize markets ~ Singapore and Thailand (3%) are positioned as strategic second-tier growth drivers, ahead of Hong Kong and Taiwan (2.3%), Brazil and Mexico (1.7%) and the Middle East (0.5%)


DEMAND FOR HAUTE HORLOGERIE IN CHINA | REGIONAL SEARCHES.


Share of Searches by Administrative Division

Baidu Data Only

Rank Administrative Division Share of searches

1 Beijing 北京 6.7% 2 Shanghai 上海 6.2% 3 Zhejiang 浙江 5.9% 4 Guangdong 广东 5.5% 5 Jiangsu Province 江苏 5.2% 6 Liaoning Province 辽宁 4.7% 7 Shandong 山东 4.5% 8 Henan 河南 3.8% 9 Hebei 河北 3.7% 10 Tianjin 天津 3.7% 11 Fujian Province 福建 3.6% 12 Sichuan Province 四川 3.6% 13 Heilongjiang 黑龙江 3.5% 14 Hubei 湖北 3.5% 15 Anhui 安徽 3.2% 16 Shaanxi 陕西 3.0% 17 Shanxi 山西 3.0% 18 Jilin 吉林 3.0% 19 Hunan 湖南 2.9% 20 Chongqing 重庆 2.6% 21 Guangxi 广西 2.5% 22 Jiangxi Province 江西 2.3% 23 Inner Mongolia 内蒙古 2.2% 24 Yunnan 云南 2.2% 25 Guizhou 贵州 1.7% 26 Xinjiang 新疆 1.6% 27 Hong Kong 香港 1.6% 28 Hainan 海南 1.6% 29 Gansu Province 甘肃 1.3% 30 Ningxia 宁夏 0.8% 31 Qinghai 青海 0.4% 32 Tibet 西藏 0.2%




•  A multi-faceted market ~ Composed of three major regions and 56 ethnics groups, China’s diversity requires an in-depth understanding of local culture and clientele preferences

•  Dominance from 1st and 2nd tier coastal cities ~ At the heart of most high-end shopping streets, coastal cities such as Beijing, Shanghai, Hangzhou and Dalian, gathered 56.1% of the nation’s demand for high-end timepieces, highlighting the concentration of consumers in these areas

•  Brand preferences vary across regions ~ Deeply rooted heritage brands such as Patek Philippe and Vacheron Constantin resonate favorably with traditional clients from the Beijing region, while IWC attract a relatively younger, urban and trendy audience from Shanghai, Anhui and even Hainan

DEMAND FOR HAUTE HORLOGERIE IN CHINA | REGIONAL SEARCHES.



Number of Haute Horlogerie searches per 1,000 Internet users HAUTE HORLOGERIE AFFINITY INDEX.




HAUTE HORLOGERIE AFFINITY INDEX. •  Swiss Watch Interest ~ The home of Haute Horlogerie

is also the country with the highest density of Haute Horlogerie searches

•  …Followed by Singapore, the Asian Switzerland ~ also recording above average results making it the Haute Horlogerie hub for watch enthusiasts




MARKET SHARES OF BRAND SEARCHES | WORLDWIDE. Haute Horlogerie Brands


•  IWC, Patek Philippe, Zenith category leaders ~ The top 3 worldwide Haute Horlogerie brands remain unchanged, gathering 50% of worldwide market share

•  Laggards' difficulties to follow the path ~ smaller brands such as Breguet, Franck Muller and Blancpain are losing share of the global demand while the leading brands such as Jaeger-LeCoultre, Vacheron Constantin and Audemars Piguet are gaining market share

•  Richemont leads the Haute Horlogerie market ~ 3 out of the 5 most searched Haute Horlogerie brands belong to the Richemont Group while the Swatch Group’s high-end brand Breguet, appears only in the 7th position


MARKET SHARES OF BRAND SEARCHES | WORLDWIDE.


MARKET EXPOSURE BY BRAND.


Weight of Regions in Haute Horlogerie Brands Searches

January to November 2011 Data for Middle East region was hidden in the graph due to its low visibility within the overall figure


MARKET EXPOSURE BY BRAND.


•  Strong Dependency in Asia ~ Patek Philippe (46%) and especially Richemont brands: Vacheron Constantin (64%), Jaeger-LeCoultre (44%) and IWC (38%) exhibit a strong recognition across Asia

•  The old continent still plays a key role ~ A. Lange & Söhne, Richard Mille, Zenith, Ulysse Nardin and Jaquet Droz remain heavily focused in Europe

•  Middle East at its digital infancy ~ Qatar, Saudi Arabia and UAE represent no more than 1% of the total Haute Horlogerie related searches. While their two favorite brands are similar to the global average, they show more interest for Audemars Piguet, the third most demanded brand in the region.


SEARCHING FOR TOURBILLON MOVEMENTS | US FOCUS.


Brand Market Share of Tourbillon Movement Related Searches



•  Jaeger-LeCoultre’s Tourbillon ~ The Le Sentier-based brand recorded the highest number of technical searches related to “tourbillon” timepieces thanks to its world-famous gyrotourbillon

•  Category leader IWC not as popular ~ Despite its leading market share in the US Haute Horlogerie market at 20%, the brand only gathered 5% of the highly targeted searches related to technical movement demand

•  Breguet rises in the technical search ~ Although relatively low in the Haute Horlogerie ranking (5%), client interest for Breguet movements underlines its highly technical perception among American clientele ranking 4th in the Tourbillon related searches

SEARCHING FOR TOURBILLON MOVEMENTS | US FOCUS.



TOP 10 MOST SEARCHED MODELS | WORLDWIDE.


Haute Horlogerie Brands

2. Portuguese IWC

1. Royal Oak Audemars Piguet

3. Reverso Jaeger-LeCoultre

2012 2011 Brand Models Total

1 2 æ Audemars Piguet Royal Oak 7.36%

2 3 æ IWC Portuguese 6.66%

3 1 è Jaeger -LeCoultre Reverso 5.68%

4 10 æ IWC Portofino 4.71%

5 9 æ IWC Pilot 4.44%

6 5 è IWC Mark 3.55%

7 13 æ Audemars Piguet Royal Oak Offshore 3.32%

8 7 è Zenith El Primero 3.29%

9 4 è IWC Aquatimer 2.97%

10 11 æ Patek Philippe Nautilus 2.54%

SUB-TOTAL 44.53%

OTHERS 55.47%

TOTAL 100.00% January to November 2011


•  Strong market share for the leaders ~ Among the 500+ Haute Horlogerie models tracked by the World Watch Report, the top 10 models account for 44.5% of the worldwide demand

•  Royal Oak vs. Reverso ~ After 3 consecutive years in the first position, Jaeger-LeCoultre’s Reverso has been replaced by Audemars Piguet’s Royal Oak due to the Royal Oak’s strong demand evolution in Western markets- specifically the US, UK and Italy

•  Strong Models Awareness for IWC ~ Schaffhausen’s brand accounted for half of the top 10 most searched Haute Horlogerie models worldwide


TOP 10 MOST SEARCHED MODELS | WORLDWIDE.


TOP 10 HAUTE HORLOGERIE "CONNOISSEUR’ MARKETS.


Weight of Models-Specific Searches by Country



TOP 10 HAUTE HORLOGERIE "CONNOISSEUR’ MARKETS.


•  Singapore’s Collectors Hub ~ Singapore shows evidence of being a connoisseur market with 17.5% of demand directly related to the search for specific models

•  Thailand Emerging ~ The Thai market can be considered as the up and coming Haute Horlogerie specialists; showing the most client interest for the 10th ranked model, the Patek Philippe Nautilus

•  The demand for models in the Western world ~ In absolute values, US, UK and Germany account for 55% of the total number of searches for models



TOP 10 HAUTE HORLOGERIE AMBASSADORS | WORLDWIDE. Relative Share of Searches for Haute Horlogerie Ambassadors

1. Sachin Tendulkar Audemars Piguet

2. Lionel Messi Audemars Piguet

3. Gerard Butler Roger Dubuis

2012 2011 Brand Ambassadors Activity Total

1 1 = Audemars Piguet Sachin Tendulkar Cricket 26.60%

2 2 = Audemars Piguet Lionel Messi Soccer 13.40%

3 - NEW Roger Dubuis Gerard Butler Cinema/TV 12.20%

4 - NEW Richard Mille Rafael Nadal Tennis 11.10%

5 4 è Jaeger LeCoultre Diane Kruger Cinema/TV 8.20%

6 - NEW Audemars Piguet Novak Djokovic Tennis 5.60%

7 - NEW Audemars Piguet Emmanuelle Chriqui Cinema/TV 4.40%

8 3 è Audemars Piguet Michael Schumacher Motor Sports 3.70%

9 6 è Audemars Piguet Quincy Jones Music 2.10%

10 5 NEW IWC Zinedine Zidane Soccer 1.70%

SUB-TOTAL 89.10%

OTHERS 10.90%

TOTAL 100.00%



•  The Little Master rules ~ Indian cricket legend Sachin Tendulkar remains the most searched Haute Horlogerie ambassador for the third consecutive year, as a result of the huge Indian fan base accounting for 90% of the search volume

•  Gerard Butler newcomer in the ranking ~ Following his passion for the brand, the Scottish actor boosted demand for the Geneva-based modern Haute Horlogerie manufacture Roger Dubuis, claiming the third position in the ranking

•  Audemars Piguet ambassadors network ~ Overall the celebrity endorsement strategy was largely dominated by Audemars Piguet – featuring 6 out of the 10 the most searched ambassadors


TOP 10 HAUTE HORLOGERIE AMBASSADORS | WORLDWIDE.


UNDERSTANDING CULTURAL-SPECIFIC BEHAVIOR.


Share of Specific Search Intentions by Country

Replica: All brand related searches that contains keywords associated to counterfeit intention. I.E. “Rolex Replica Watch” Price: All brand related searches that contains keywords associated to price. I.E. “Rolex Price List” Distribution: All brand related searches that contains keywords associated to the finding of a point of sales . I.E. “Rolex shop” Product Range: All brand related searches that contains keywords associated to the product itself, its movement, its color, its material, or its style. I.E. “Rolex gold”




•  Haute Horlogerie client interests differ ~ Client behavior for Haute Horlogerie brands varies widely across the markets and regions of the world

•  Price sensitivity of the Chinese~ Search patterns in China tend to be strongly related to price inquiries about high-end timepieces; it is actually the second most common search, right after brand related searches and just before Models & Collections

•  Counterfeit searches still an issue in the US~ American clients tend to search proportionally more for counterfeit versions of Haute Horlogerie, accounting 2.5% of their overall search patterns

UNDERSTANDING CULTURAL-SPECIFIC BEHAVIOR.



MOBILE USAGE OF THE HAUTE HORLOGERIE CLIENTELE. Share of Mobile Searches Per Country




•  Impressive growth in mobile Internet ~ While it is expected that mobile internet users will overpass desktop users only in 2014, the market is already witnessing this shift in media consumption: 17% of global Haute Horlogerie searches were performed through web-enabled mobile devices

•  Strong variations across markets ~ Nearly half of the searches conducted for Haute Horlogerie brands are through mobile devices in Japan, while European markets show less mobile use between 12-15% (the exception being the U.K. with 20% of mobile searches )

•  “On the go” client concerns ~ Points-of-sale related searches are performed twice as much from a mobile device than a desktop, which underlines the importance for brands to adapt digital strategies for their brick-and-mortar business

MOBILE USAGE OF THE HAUTE HORLOGERIE CLIENTELE.


SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON FACEBOOK.


Mapping Haute Horlogerie Brand Performance on Facebook


SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON FACEBOOK.


•  Exclusive time on Facebook ~ To date, half a million watch aficionados are connected to Haute Horlogerie brands on Facebook, the largest social network with 800 million active users worldwide

•  IWC leads the path ~ Consistently with its leading market position, IWC dominates the Facebook landscape for the second consecutive year on quantitative criteria (over 220,000 fans) whilst maintaining a favorable level of community engagement (0.41% average)

•  Jaeger-LeCoultre as the challenger ~ A strong and engaging editorial and multimedia strategy on Facebook led Jaeger-LeCoultre into the top with over 84,000 fans and 0.54% engagement rate

•  Patek Philippe stayed away from the social arena ~ The Swiss watch manufacturer remained the only Haute Horlogerie brand not to be officially present on social media


SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON TWITTER.


Mapping Haute Horlogerie Brand Performance on Twitter


SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON TWITTER.


•  Haute Horlogerie Tweets ~ Information sharing with clients and influencers on the micro blogging platform is part of today’s communication reality: more than 60,000 mentions of Haute Horlogerie brands were observed (excluding replica & discount related tweets)

•  Audemars Piguet’s leading position on Twitter ~ Among the 12 Haute Horlogerie brands active on Twitter, Audemars Piguet sets the trend while capturing over 35% of the total amount of Haute Horlogerie followers – with more than 5,000 followers and a 0.55% discussion rate

•  Engaging Jaeger-LeCoultre ~With a strong number of followers (over 3,000), Jaeger-LeCoultre maintains above-the-average discussion rate of 0.95%, translating the brand’s ability to adapt both content strategy and community management to the different social media platforms


SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON SINA WEIBO.


Mapping Haute Horlogerie Brand Performance on Sina Weibo

1st Dec 2011 – 1st Jan 2012


BRAND ENGAGEMENT ON SINA WEIBO.


•  High-end luxury watch brands reluctant to join the Chinese social media wave ~ to date, one third of the Haute Horlogerie brands are managing an official presence on Sina Weibo, the largest micro blogging platform in China. The 250 million users of the social platform account for half of the number of Chinese Internet users

•  IWC as a first mover ~ IWC’s brand positioning and local community management particularly reflects the brand’s ability to rapidly grasp China’s potential amongst a younger audience of watch lovers: registering the largest number of followers (+5,000) while reaching above-the-average engagement (+0.82% VS 0.56% average)


Search Queries Extracted from search engines, the search queries collected in the World Watch Report encompass a large semantic field of 17k+ keywords related to the brands including synonyms, plurals and misspellings.

Languages Search queries are tracked in all major languages according to each key market: Portuguese, Russian, simplified and traditional Chinese, Taiwanese, Japanese, French, Italian, Spanish, German, Thai and Arabic.

Search Engines Based on Google, Bing, Yandex in Russia and Baidu in China, the World Watch Report covers an average of 85% of search market share globally.

Data Collection and Analysis Public and professional tools are used to automate search volume collection, thanks to Digital Luxury Group’s strong partnerships with search engines. Once collected, this data is filtered, analyzed and translated into 14 intentions (brands, models, replicas, etc.) using exclusive Digital Luxury Group technology.

Harmonization As multi-products brands, such as Cartier, Chopard or Bulgari, may generate significantly more search volumes than watch-only brands, data is harmonized to identify watch-only demand and exclude demand for other products (for ex. “Cartier jewelry”, “Tag Heuer mobile phone”, etc.). Similar corrections have been made for brands whose names have different associations such as Montblanc, Omega or Zenith.

Social Media engagement rate The engagement rate is a qualitative indicator measuring the level of interactivity between a brand and its community on each Social Media platform. Its calculation is based on the average number of feedback (“Likes” and “Comments”) per individual post published by the brand (“Status Updates”), divided by the number of Fans on date of publication.

Deciphering Search Intentions: A methodological approach More than tracking single brand names, the World Watch Report monitors a range of watch related searches. Using in-house developed DemandTracker© technology, the World Watch Report actually tracks 17,229 keywords associated to luxury watch brands, currently managing 14 different intentions in order to better understand the real needs of the online luxury watch clientele.


METHODOLOGY.



IN THE PRESS.


About Digital Luxury Group Digital Luxury Group, DLG SA, is the first international company dedicated exclusively to the design and implementation of digital communication strategies for luxury brands. Since 2004, DLG has been publishing the World Watch Report 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: Nicolas HANSSENS

Research Manager Strategy & Intelligence Business Unit

[email protected]

Florent BONDOUX Business Unit Manager

Strategy & Intelligence Business Unit [email protected]

Digital Luxury Group, DLG SA

7 Avenue Krieg CH-1208 Geneva

Switzerland


WHO ARE WE?

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

WorldWatchReport 2012 - SIHH Haute Horlogerie Preview

Business

Transcript of WorldWatchReport 2012 - SIHH Haute Horlogerie Preview