An employee of Swiss watchmaker H Moser & Cie assembles a wristwatch at a professional fair in Geneva. Photo: VCG
As the world's factory, China produces 80 percent of the total global volume of watches. In South China's Guangdong Province, considered a manufacturing hub, numerous original equipment manufacturers (OEMs) have been providing components and accessories to foreign watch brands for decades. Some of them have even started their own brands. While some suggest that Chinese watch manufacturing is quickly catching up with the industry in Switzerland, as Chinese brands are now expanding into the international market, a huge development gap still exists.
Similar to how almost every woman has a craving for luxury handbags, an increasing number of men are favoring luxury watches in China.
A white collar worker based in Beijing, who calls himself Robin, said he has been researching luxury watches on the Internet for over a year. His favorite type - the Swiss watch brand Rolex - is more than just a wearable timepiece he said.
"It represents the country's engineering excellence in wristwatch manufacturing, and I'm always obsessed with the stories and culture behind such high-end products," he told the Global Times.
Every time he passes by a Rolex store, he has to control his impulsion of spending hundreds of thousands of yuan on just one Swiss watch. Instead, he reads as many online posts and discussions as possible to learn more about the high-end watch-making industry.
Robin is not the only millennial in China who has a strong desire for Swiss-made wristwatches. Another white collar worker surnamed Shang ordered a TAG Heuer watch from Chinese online retailer jd.com in May. The watch costs 12,590 yuan ($1,909), but Shang chose the "buy now, pay later" option offered on the platform.
"I always esteem brands made in Switzerland," he said. "A high-end watch can represent a man's social identity."
After a slowdown from 2013 to 2015, China's high-end watch market witnessed recovery in 2016, with total sales amounting to 66.7 billion yuan, up 3.79 percent, according to a report published on the Shenzhen-based industry information site chinawatchnet.com in August. The growth rate of imported watches has continued to accelerate, thanks to the country's growing middle class.
The increasing demand in the Chinese market has also boosted watch exports in Switzerland, the world's dominant watch manufacturing hub.
From January to August of this year, the total value of exported Swiss watches to the Chinese mainland reached 959 million Swiss francs ($989 million), surpassing the total value of Swiss watch exports to the Chinese mainland in 2016.
The Chinese mainland is the third-largest market for Swiss watches, following Hong Kong and the US, according to the Federation of the Swiss Watch Industry FH.
As a result of globalization, some watch components have been produced in South China's Guangdong Province for many years, a manufacturing hub for the global watch supply chain and a place where a large number of original equipment manufacturers (OEMs) have gathered.
China's watch exports now account for 80 percent of the total global supply, with Shenzhen, a city in Guangdong, accounting for 42 percent of that number, media reported in June.
Aiming at becoming a strong competitor of Switzerland in watch manufacturing, the local government of Shenzhen has been encouraging heavy investment in R&D in recent years.
Lian Hailin, board chairman of Shenzhen-based Memorigin Watch (Shenzhen) Co Ltd, said he is busy at marketing events for the company, which specializes in tourbillion watches. "Our watches can possess almost the same precision as Swiss-branded watches," he told the Global Times.
The brand combines the western art of watch-making with Chinese characteristics. For example, the company's watches feature swirling dragons, the symbol for the Chinese emperor of many dynasties.
Also, one of the company's strategies is to team up with companies in different sectors to enhance its marketing impact. For example, the company teamed up with Marvel in 2015 to produce Avengers-themed watches.
Memorigin is predominantly targeting the global market and produces thousands of tourbillion watches every year, "the largest output of this type of watch worldwide," he added.
But Memorigin is not the only Chinese watch brand that has been vigorously tapping into the international market recently. Chinese watchmaker Dailywin Watch Group, which originated from an OEM factory for high-end Swiss brands in Dongguan, Guangdong, established a factory in Switzerland earlier this year to meet new requirements of "Swiss Made" watches imposed by the European country's Federal Council.
"Among the 3.6 million finished watches the company exports every year, 600,000 come with watch cases and accessories made especially for Swiss companies," Liu Ren, vice general manager of Dailywin Watch Group, told the Global Times.
After working with foreign brands for over two decades, the company has accumulated strong experiences in watch-making and has established a self-developed brand.
As more and more Chinese watch manufacturers like Memorigin and Dailywin rise to compete with traditional Swiss brands, Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry FH, says "such competition is important for business."
Under the OEM business model, there might be questions raised over whether the "Swiss Made" attribute has become less significant than in previous years. However, "…we have not noticed such a trend and the Swiss made label remains very strong on the markets," Pasche told the Global Times on Thursday.
Although Chinese watchmakers are becoming more prominent, they still lag behind their Swiss counterparts when it comes to techniques and operations.
"In terms of some classical techniques, such as handcrafted polish, we're still lagging behind Swiss manufacturers," Lian said. In addition, the traditional craft of watch-making, sworn by for over one hundred years, still flourishes across the country, with many Chinese manufacturers still working as OEMs in China's Pearl River Delta region.
In spite of the recent rapid development of Chinese watch manufacturing, the gaps between China and Switzerland are still significant, an industry expert, who prefers not to be identified, told the Global Times. "Switzerland is not selling watches, it is selling a culture," he said, noting that what is really attractive about a Swiss-branded watch is not the product itself, but the stories behind it.
To encourage more components and accessories to be made in Switzerland and to enhance the status of the "Swiss Made" label, a new Swiss regulation will come into force on January 1, 2017, media reported in December 2016.
Beside this, according to Switzerland, the watch development movement should be Swiss-dominated; the Swiss Federal Council urged that at least 60 percent of the total production costs of watches must be Swiss-based, according to the media reports.
"This will reshape watch manufacturing," the abovementioned expert said, referring to the OEM production model.