Long dominated by big brands from Switzerland and Japan, the watch establishment is being challenged by a new type of competitor – one made possible by the internet.
Previously unheard of access to funding, design and manufacturing via the web has meant almost anybody can start their own watch microbrand – and around 200 people have done just that.
These newcomers might not yet be causing sleepless nights at Omega, Rolex and Seiko, but their growth has been explosive and a small number have made the leap from hobby projects to legit mainstream brands.
Source: Microbrand Watch World
Crowdfunding site Kickstarter is where much of the action has taken place. In 2012, 316 backers raised $USD101,252 for two watch projects. In 2015 more than $US7.4 million was raised for 87 projects. To date almost $US12 million has been raised for 150 projects by almost 54,000 backers.
Earlier this month the LIV GX1-A, an American-designed watch made of Swiss
components, raised more than $USD1.1 million, the highest amount for a watch project on Kickstarter.
“It's become incredibly easy,” says Nick Warner, a South African now living in Auckland who in 2015 launched his own brand, Uhuru.
“Your barrier to entry is now simply enough money to make a prototype, and some marketing skills. The internet has literally made it possible to run a watch brand from your bedroom.”
Warner is typical of the microbrand owner who comes up with a concept which is sent to a manufacturer (sourced on the web) for refinement into usable technical drawings. Most manufacturing and assembly is done is China as it's the most cost effective, although a small number are done in Switzerland.
What is a microbrand?
A microbrand is usually a one-person operation but small teams are not uncommon. Micro-brand watches are usually crowdfunded or pre-order funded, cost less than $US2500 and are sold online almost exclusively direct from the brand. Production runs are small – typically less than 2000 per model, usually around 500.
Interaction between customers and brand owners is common on forums and online sites. Micro-brands are generally concentrated in the US, South-East Asia, the EU and Australia.
They are seen as being good value for money, offering high-end features such as bronze cases, helium valves and decorated mechanical movements for a fraction of the price of mainstream brands.
“In terms of sheer range and quantity of watches, China surpasses both Switzerland and Japan combined,” he says.
Key to a successful project is having a great design, a compelling back story and drumming up enough interest – and backers - via social media and watch forums.
Warner, who runs Microbrand Watch World, one of the most comprehensive blogs on watch Kickstarter projects, says the market for micro brand watches are first and foremost watch enthusiasts who see them as having many of the features of high-end watches at an affordable price (around $USD500 is the sweet spot for micro brands).
Microbrands often have more daring designs and are produced in small numbers – as few as 500 - which keeps them exclusive.
“It's also much more personal with a micro brand,” Warner says. “Big brands are for the most part, corporations with paid brand ambassadors as the face of their brand. With micros, the brand owner is very involved with his customers, answering questions on social media and watch forums. As a customer you have direct access to the guy who designs your watch.”
Source: Microbrand Watch World
Growing into a mainstream brand is in the back of the mind of most micro brand watch makers and a handful, such as Christopher Ward, have made the leap to a true luxury mainstream brand.
Not far off is Magrette Timepieces, an Auckland-based brand that was started 10 years ago by Dion McAsey, whose
top-of-the-range piece features black diamonds and intricate Maori engravings and sells for north of $USD5000.
Sites like Kickstarter didn't exist when McAsey started Magrette, so he raised funds through pledges on his own website. Today, he considers himself a small brand, rather than micro brand, with a range of more than 20 mostly 70s-inspired dive and yachting models either for sale directly or for pre-order.
Recently, he started a second brand, Belmoto, whose designs are more evocative of vintage racing chronographs. Unlike Warner, managing his watch brands is McAsey's fulltime job.
“Before this I was a partner in a small online agency, we specialised in online campaigns for bigger Agencies,” he says. “This knowledge plus my passion for timepieces was a good mix to start Magrette.”
His main market is the US with around 70 per cent of sales. The rest is spread through the rest of the world with only one to two per cent in his home of New Zealand.
Apart from people seeking good value (micro and small brands have few of the overheads of the major brands and are much more keenly priced), buyers of brands such as Magrette are those who don't want to be pigeonholed, McAsey says.
“With a micro brand, people find it hard to judge you based on the watch you wear. This is especially prevalent within the corporate world where you will sit there in your meeting and the person across from you will be trying to put you in one of his boxes of what or who he thinks you are, based on the timepiece you're wearing.”
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At a time when smart watches are starting to reach their potential, micro brands are also testament to the enduring appeal of watches powered by springs and gears. In the early 1970s quartz movements almost killed off traditional mechanical watches which are far less accurate and more expensive.
McAsey thinks that while demand for high-end mechanical pieces will stay strong, smart watches have the potential to impact watches priced under $US1000. But there's a possible upside too.
“Smart watches will increase interest in watches generally,” he said. “Ultimately, it'll send an overflow of new people back to mechanical watches as they start seeking something that is different from everyone else.”
Stefan Herrick - Senior Manager External Communications, Corporate Affairs ANZ NZ.The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.