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1) Brand

Watch Market Structure

The global watch market has very interesting characteristics due to the drastically different price differentials between tiers and is truly a luxury dominated market! Combining data from several industry reports / secondary market websites / Watch Metrics estimates... the tables below show the global watch market (~140 brands) broken down into 6 tiers based on average watch price sold (note that WM made adjustments using secondary market pricing due to used watches from a few select brands like Rolex trading at a premium versus MSRP unlike most brands that trade at a 20-30% discount versus new):

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  • Tier 6 ("Ultra-Luxury" is >$50,000) -​ < 0.5% of total unit volume but ~12% by $ value. Includes brands like Richard Mille, Patek Philippe, Audemars Piguet, Van Cleff & Arpels, FP Journe. 

  • Tier 5 ("High-End Luxury" is $15,000 to $50,000) - 2.5% of total unit volume but 31% by $ value. Includes several brands like A Lange Sohne, Vacheron Constantin that could just as easily be considered Tier 6 in terms of quality but are tier 5 due to the tier breakpoints chosen. Perhaps controversial to some, Rolex (2% of unit volume but 23% of total $ market share!) is bucketed into Tier 5 using this methodology due to the brand's high avg secondary price (~$13k) which comes in last in Tier 5. Other mainstream brands falling into Tier 5 include Breguet, Piaget, Hublot, Blancpain.

  • Tier 4 ("Luxury" is $5,000 to $15,000) -​ 4% of unit volume but 24% of $ value. Include many brands commonly known by the watch collecting community: Bvlgari, Zenith, JLC, Panerai, Cartier, IWC, Omega, Breitling. 

  • Tier 3 ("Entry Luxury" is $1,500 to $5,000) - 7.4% of unit volume and 12% of $ value. Notable brands include Tudor (near top of Tier 3 and trending toward Tier 4 if only considering recent models), Mont Blanc, Rado, Tag Heuer, Mido, Longines, Hamilton (at edge between Tier 2 / 3).

  • Tier 2 ("Premium" is $500 to $1,500) -​ 9.8% of unit volume but only 5.4% of $ value. 

  • Tier 1 ("Affordable" is <$500) - 76% of the 49 million watches produced globally but only 16% of the $56.4 billion production value.  

Veblen Goods
To those who are baffled by the 3 orders of magnitude difference in price between Tier 1 and Tier 6 watches, the sections below on this page will further address some of the real factors driving Brand value and scarcity. One must keep in mind that luxury watches are Veblen Goods which are not governed by the same supply/demand & pricing dynamics seen in typical markets. Those who purchase watches at the higher price tiers are paying some degree of exclusive signaling premium which some functionality & tangible metrics focused watch enthusiasts will never understand. As described under the philosophy and goals section of this website, Watch Metrics only aims to measure (rather than judge) the attribution of the brand factor across watches.  

More On Brands​

The most notable brands in the world of watches first acquired their reputation based upon design & technical achievements. The later adoption of such brands by global cultural leaders ranging from sports & entertainment stars to titans of industry has further reinforced and amplified such messaging to the masses.

Brand Recognition Premium: the smaller watch enthusiast / collector community may have interest in a brand's horological achievements but most watch buyers only know and care about the perception stemming from association with brand ambassadors. Watches produced by major brands carry a brand recognition premium. 

Stereotypes emerge with major brands. Examples:














Mass market advertising is effective (but costly) so only major brands do it.
















Control of Luxury Watch Market is Fairly Concentrated: the near-death experience of the global watch market following the quartz crises of the 70s and 80s resulted in consolidation of the luxury watch market into a few major conglomerates (Richemont / Swatch / LVMH) and a handful of independent brands. 










Switzerland continues to dominate the global watch market and its exports comprises much of the luxury watch market.










The widely followed annual Morgan Stanley watch market report shows the market share of these conglomerate and major independent brands. Rolex stands out within this group owning ~25% of the market by $ value.











Unlike the Major brands above, smaller independent brands have to compete on the basis of differentiated product offerings and selectively target the watch enthusiast & collector community. Although popularity and production count has grown over the last few years (Covid as a tailwind to interest in watches and awareness of such brands), these independent brands have much lower production levels. 

  • On the lower end of the market, emerging micro-brand tend to specialize in their product offering so to fill voids in the market vacated by the Majors. These brands typically sell at the sub $1,000 price point (https://www.nytimes.com/2022/06/14/fashion/watches-microbrands-collectors.html).

  • On the ultra-high end of the market, artisanal brands can outcompete the leading Major brands on quality and not have to worry about pricing that far exceeds the mid-tier luxury range (Rolex / Omega / Cartier) due to focus on more discerning and much more exclusive group of ultra-high networth buyers. 

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Production Process & Quality Premium - What does production technique have to do with quality of fine watch making at the higher end of the market (and scarcity as well)? SJX has an excellent article on this topic which highlights some of the production differences. 

  • Category 1 and 2 brands are extremely exclusive with each producing only tens to several hundred pieces of 'art' per year. The production process is time intensive (< 20 watches produced per employee at these brands versus hundreds per employee for category 5) and it is doubtful that the average person has ever heard of most of these brands before.

  • Category 3 brands are known to be high horology but also benefit from industrial scale. Some of these brands (including the "Holy Trinity") are known to the wider public and are aspirational brands that will average $20k+ per watch.

  • Category 4 and 5 brands are at the mid-upper tier of luxury (with arguably some interchangeability when looking at other metrics). These brands occupy the $5-15k price range.     






 
 

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Who Judges Quality? - at the luxury+ end of the market, one way for brands to renew their credentials for watch marking excellence or for independents to create a reputation for themselves is to win at the Grand Prix d'Horlogerie de Genève (GPHG), the most important annual watch competition that is likened to be the "Academy Awards for watch making". Awarded in November of each year since 2001, the GPHG includes prizes in important categories, including men's/women's, sport watch, technical innovation, and complication. Originally given by the Federation of the Swiss Watch Industry (FH), the GPHG became a registered public interest organization in 2011. The number of prizes awarded has expanded dramatically since 2013. The original ceremony, held in 2001, gave just 7 trophies. Until 2012, the number was roughly steady between 9 and 11 awards. From 2019 through 2021, 19 trophies have been awarded each year, and 21 trophies were awarded in 2022.

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Audemars Piguet is the big winner historically, with Piaget, Van Cleef & Arpels, and Vacheron Constantin close behind. Some brands, notably Swatch and Glashütte Original have never entered the competition, and Rolex and Patek Philippe have not entered in over a decade.

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