INTRODUCTION BY TIRATH KAMDAR, GENERAL MANAGER OF LUXURY AT eBAY
As a life-long watch lover who has always worked in the digital world, Swiss brands embracing ecommerce has always been an interesting topic. When it comes to new watches, it feels like the industry is 10 years behind most other segments of the retail landscape, and five years behind where customers want to be.
I enjoy the experience of browsing and shopping in a prestigious multibrand watch showroom as much as the next watch enthusiast, but virtually every journey towards buying an expensive watch begins online, and very often ends there as well.
The great thing about the online world is that there is unlimited space for watches from every brand and every era. If you have the money, customers can find and buy even the hottest Rolex watches — pre-owned or new — despite the fact that they have only a slim chance of finding them in the cabinets of an authorized dealer.
At eBay we want to provide the greatest choice of watches in the world while ensuring we provide an exceptional shopping experience. Part of that experience is making it simple for customers to search for and find exactly what they want. Just as important is to ensure the watches they buy are precisely as described and verified authentic by the sellers. This is where our Authenticity Guarantee comes in, which has been building trust and protecting buyers and sellers on eBay since September 2020, and sees every piece priced at over $2,000 checked by trained specialists before it is delivered to a customer.
The extra confidence this has brought to eBay’s community has driven sales of luxury watches to record levels, with more than 25,000 watches were sold in the first half of 2021 by top brands including Rolex, Omega, Breitling, Patek Philippe and Cartier.
We first introduced the Authenticity Guarantee in the United States, but have subsequently launched it in Japan. The UK and additional markets are on the horizon.
eBay is far from the only advocate for buying and selling luxury watches online, and it is exciting to see investment flooding into this sector. This is driving competition, which is raising standards across the board and flushing out rogue operators.
There has never been a better time to buy and sell precious timepieces online, and eBay is here as a trusted friend to help.
With shops shut for months at various stages of the pandemic, online sales have soared, particularly for hard luxury goods.
A survey this year by Vogue Business found that 69% of luxury consumers in the US purchased pre-owned luxury over the past year. However, the same survey found that, when it comes to shopping online for pre-owned luxury goods, 96% of shoppers wanted reassurance about the authenticity of what they are buying.
It is worth remembering the challenge that eBay and its peers have been addressing in recent years, which is that the internet was until recently seen as an unregulated and lawless place where fakes, frauds and Frankenstein watches lurked.
That reputation has been changing rapidly among well-informed consumers. Luxury watch sales on eBay have reached a record-high with more than 25,000 watches sold in the first half of 2021 by top brands including Rolex, Omega, Breitling, Patek Philippe and Cartier.
Following the launch of Authenticity Guarantee, many brands saw upticks in searches, such as IWC, whose searches increased +12% month over month. It appears that consumers have gained confidence from the fact that every expensive watch that is sold with the guarantee arrives precisely as described. Happy customers tell their friends, they shop online again and they are more likely to return to a site they trust if they ever choose to sell a watch.
“With the consumer shift to online shopping, the ecommerce market is stronger than ever. We know trust is important among the watch community, which is why we launched our Authenticity Guarantee service last year in the US, where all watches sold for over $2,000 are meticulously inspected and verified by independent experts,” explains Tirath Kamdar, general manager of luxury at eBay.
eBay knew it was onto a winner when the volume of watches being offered for sale on its platform rose along with the value of sales. “With our Authenticity Guarantee service, we are evolving our offerings and ensuring eBay watch customers get exactly what they want — incredible selection with an added layer of trust and confidence that their high-valued purchases are one hundred percent authentic,” Mr Kamdar suggests.
Major retailers in the pre-owned and luxury watches sector have worked independently on improving customer service, which has collectively increased trust between online buyers and sellers. Money back guarantees are relatively common with the biggest players such as Watchfinder, Chronext and WatchBox. This is contributing to rapidly rising average transaction values and volumes.
eBay goes even further. Once its authentication inspection is complete, watches receive a unique Authenticity Guarantee certificate with details about the item including brand and model. This card is NFC-enabled, a high-tech digital feature (used by contactless payment cards) that allows owners to look up a watch’s authentication information with a tap of a smartphone.
eBay always said that the Authenticity Guarantee was only its first step to improve its luxury goods offering across categories like watches, handbags and sneakers. In April, the San Jose-based giant added another layer of security in the form of an escrow payment option available for luxury watch transactions over $10,000. This means buyers and sellers can have their funds held by a specialist external escrow firm until their transaction completes. If anything unexpected happens with the deal, the buyer and seller are both protected.
Watches are not the only category where eBay offers an Authenticity Guarantee. It has expanded to include sneakers worth more than $100 and handbags priced at over $500 from more than 15 luxury brands. The lower price thresholds are not simply because footwear and accessories are cheaper, it is eBay’s way of building confidence in a system that will protect customers who might buy increasingly expensive items as they get older and earn more. Air Jordans can be a gateway drug for Audemars Piguet.
“eBay’s authenticated categories continue to expand, and we are always looking for ways to offer the best experience to our millions of active shoppers and sellers by enhancing our trusted experience on eBay for even more inventory across luxury categories. We also continue to explore opportunities to include more offerings that will drive the user experience forward,” Mr Kamdar reveals.
“We’re just getting started. Since we began authenticating watches and sneakers and now handbags, we have seen authentication driving trust and confidence for our community, which is evident through increased customer satisfaction scores and sales growth in these categories. Our luxury categories continue to gain momentum with recent quarter over quarter growth,” he adds.
The global market for pre-owned watches is estimated by McKinsey and Co to have been worth $18 billion in 2019, and online sales growth is outpacing person-to-person deals. The sector has become dramatically more competitive in the past five years, and success of the biggest players has encouraged investment to flood in. Much of the new money is being spent on improving customer service in a way that improves trust.
Chrono24, for example, revealed a fresh funding round of €100 million over the summer. “We’ve built a platform that not only supports and encourages evolving consumer behavior, but also provides invaluable proof of concept to an industry that has traditionally shied away from disruption,” says Chrono24 Co-CEO, Tim Stracke.
Traditional auctioneers face a different challenge to the digital natives. The likes of Christie’s Bonhams, Phillips and Sotheby’s are built on trust accrued over centuries, but building on that reputation with digital sales was not a priority until recently. The pandemic has changed that for good. The total value of online sales by the top six auctioneers was just CHF 7.8 million or 4.6% out of a total of CHF 162 million for the first six months of 2019. By the first half of 2021, online sales had risen to CHF 54 million from a total of CHF 241 million, a healthy 22.4%.
It is remarkable that the total value of luxury watch sales at auction by the top six houses rose by 49% from the first half of 2019 — pre-pandemic — to the same period in 2021 when the world was still heavily affected by lock downs, travel bans and other restrictions as the virus continued to wreak havoc.
Over that period, the value of sales at physical auctions rose by 21% from CHF 154 million to CHF 187 million but the value of online sales for the same auctioneers increased by 486% from CHF 7.8 million to CHF 53.8 million. It is likely that a whole new cohort of customers participated in auctions online during the pandemic and then either continued to do so as restrictions eased or “graduated” to taking part in the sale rooms.
The market was massively depressed in the first half of 2020, selling watches worth just CHF 71 million, four times less than this year, and with online auctions accounting for 38% of the total.
Christie’s launched high frequency online auctions at the height of the pandemic last year, which might not have had a huge impact in 2020 but set the business on a course to sell watches worth CHF 84.5 million in the first half of this year when physical and online sales complemented each other.
Shifting towards online is one headline trend in the watch auction world, another is the emergence of independent watchmakers commanding ever-increasing prices. Remarkably, F. P. Journe watches generated sales of almost CHF 10 million from 44 lots in the first half of the year from the top six auction houses. To give that context, Rolex watch sales were worth CHF 21 million over the same period from 88 lots.
Was Rolex underperforming or F. P. Journe on fire? A bit of both, perhaps.
Certainly Patek Philippe remained the king of watchmakers for auctioneers, racking up sales worth over CHF 81 million from 180 watches going under the hammer.
Looking to the second half of this year, and with the autumn sales approaching, it is independents that are making much of the noise again.
Among the most eagerly awaited sales will be four Philippe Dufour watches, an example of each of the four timepieces that he has made in his own name, at The Geneva Watch Auction: XIV held by Phillips in Association with Bacs & Russo.
A complete set of four has never been sold at a single auction before. “This set of four Philippe Dufour timepieces has been an epiphanous moment for us. Offering his four creations — the Grande & Petite Sonnerie pocket watch, Grande & Petite Sonnerie wristwatch, Duality and Simplicity — is truly humbling. Dufour is a living icon and his creations are as coveted as oeuvres by the greatest artists of our time,” say Aurel Bacs, senior consultant Bacs & Russo and Alexandre Ghotbi, head of watches, Continental Europe and Middle East at Phillips.
Combined, the four watches have estimates totaling over $5 million, which does not seem so unlikely after A Collected Man set a new world record for a Philippe Dufour watch with the sale of a Grande et Petite Sonnerie watch for $7.63 million (£5 million) within hours of announcing it was on sale.
The same Phillips sale sees another unique set, this time of five F. P. Journe watches, on the block. The watches, each of which is ‘number one’ in its series, comprise a Tourbillon Remontoir (estimate CHF 300,000 – 600,000); a Chronometer a Resonance (CHF 200,000 – 400,000); and Octa models Reserve de Marche (CHF 50,000 – 100,000); Chronograph (CHF 100,000 – 200,000) and Calendrier (CHF 80,000 – 160,000).
The ‘subscription’ aspect refers to the fact that Journe financed the launch of his eponymous dial name in 1999 by taking part-payments for the first watches before they were made — a system used by the 19th century maker Abraham-Louis Breguet. The Tourbillon Remontoir on offer is, therefore, the very first watch to have been sold under the F.P. Journe dial name.
Independents aren’t the only watchmakers warming up, Cartier is also getting noticed.
A rise in auction prices has long been seen as inevitable to those in the know, such as noted Cartier dealer Harry Fane who highlighted just why the watches are so collectable when WATCHPRO columnist Simon de Burton interviewed him for the Financial Times last year. “The watches made by Cartier London in the late ’60s and early ’70s have become very sought-after, causing values to leap,” Mr Fane says. “But the quantities made were tiny — probably about 12 examples of the original Crash in the 1960s and between nine and 12 when the model was briefly re-issued in the ’80s”.
And it’s the models made in minuscule numbers that are hitting the big time at auction. Over the summer, an unprecedented two examples of the Pebble crossed the block at separate auctions within weeks of each other, causing a bidding frenzy among collectors on both occasions. The first, sold at Phillips Geneva in May, fetched a quadruple estimate £321,000 / $445,000, shortly after which Bonhams London sold an especially scarce version with so-called ‘turtle’ strap lugs for £225,250 / $312,000.
eBay is also seeing a number of luxury watch brands increase in popularity on its platform. “This past year, we’ve seen a tremendous increase in interest for luxury items, especially for watches. For example, over 25,000 watches were sold from the top brands alone, like brands like Rolex, Omega, Breitling, Patek Philippe and Cartier, in the first 6 months of 2021,” reveals Mr Kamdar. “Additionally, following the launch of eBay’s Authenticity Guarantee service for watches in September 2020, many luxury watch brands saw upticks in searches, such as IWC, whose searches increased +12% in October compared to September. We saw more than 22 million site searches for Cartier and more than 15 million for Tag Heuer in the past year as well,” he adds.
One reason demand is rising for a wider range of brands is that supply is tight for the most popular models from the likes of Rolex and Audemars Piguet, even on the secondary market. If the current Daytona or Royal Oak is tough to find at anything other than an eye-watering price, why not consider something just as well-made from Omega, TAG Heuer or Breitling?
Luxury watches sales reached record levels on eBay from January to June this year, and demand was spread over a wide range of brands. Tudor and TAG Heuer have been gaining popularity amidst the pandemic and onwards, while prices have been soaring for watches from Rolex, Audemars Piguet, and Patek Philippe.
Offering the largest choice of prestige watches is eBay’s ongoing mission, and it works with sellers of all sizes from large operations like Watchbox, Govberg Jewelers, Beckertime, Shopworn, Hessfineauctions, Chrono_Store, and smaller sellers like Luxurybazaar and Purewatches. “These are some of the top sellers who we have had the pleasure of partnering with to grow their unique business on eBay and we have seen substantial growth in these managed seller accounts,” Mr Kamdar says.
eBay has more watches on sale at any one time than any other platform, and has the advantage that more 100,000 new, pre-owned and vintage watches marked with the Authenticity Guarantee badge.
“What sets eBay apart from its competitors is our unique selection of inventory from top luxury brands from new to pre-owned and vintage items. Our customers know they can find exactly what they’re looking for on our platform and again, we’re seeing quarter over quarter growth in the luxury category, and this will only continue to grow,” Mr Kamdar suggests. “As one of the largest luxury marketplaces in the world, eBay has one of the best pre-owned inventory of top brands including Rolex, which are not easily found on other marketplaces,” he adds.