There is a saying in China: 穷人玩车，富人玩表, “The poor play with luxury cars, while the rich play with luxury watches”. As the Chinese earnings are increasing, their demand for luxury products is also increasing. In 2017, Swiss watch exports saw their strongest growth in more than five years according to a report by the Federation of the Swiss Watch Industry. Hong Kong and mainland China were the top two markets for Swiss watches, with sales in Hong Kong rising 21.3 percent to 15 percent of the market and mainland China sales skyrocketing by 44.3 percent to reach 10.9 percent of the market. To understand the luxury watch market in China, we analyze Rolex in China.
Rolex entered Chinese market with an objective of providing the high and luxury hand watch with innovative technology and design so as promoting its brand to a kind of collective item which symbolize as prestige, luxury and high quality. Rolex in the Chinese market has changed the game of luxury watch in china, being the fact that there were some luxury brands Such as Omega, Cartier which dominates the market before the emergence of Rolex.
Case study of Rolex in China: The emergence of the luxury market
According to Global Digital, the global watch market share was $21 billion in 2016 and expected to reach $30 billion by the end of 2020. China is a key influencer in the growth of the luxury watch market with market growth of over 59%. Rolex is the leading luxury watch brand globally, but the situation is different in China, where Omega has the leading market share, followed by Rolex and Cartier. The emergence of Rolex in the Chinese market was not a bizarre scenario to most luxury consumers because it has entered Hong Kong since 1972 through Emperor Watch & Jewellery before it entered the mainland China in 1995 in cooperation with Peace Mark, the largest luxury watch retailer in Asia.
Rolex in China: How it delivers luxury to customers
The Chinese luxury watch market attracts the attention of global luxury watch manufacturers all over the world. Rolex’s success in the Chinese market has to do with its global recognition, which symbolizes power and success.
Brand Marketing of Rolex in China
As the most prestigious luxury watch brand in such a competitive market, where luxury customers are often brand loyal, Rolex had to make a good first impression when entering the Chinese luxury watch market, which is tactically done through branding and naming。When naming is well-done, it can have a real impact on the sales of a product. Let’s take, for example, Omega’s bestselling luxury watch in China: the De Ville model. Its Chinese translation is 蝶飞 (Die Fei) which means flying butterfly, an elegant and easy-to-remember name for Chinese clientele. As opposed to the most loved De Ville, Rolex’s Oyster Perpetual Submariner green-dial version has been given the name of “green water monster” (绿水鬼， Lu Shui Gui) on the Chinese luxury watch market, while the black dial version was called “black water monster” (黑水鬼 Hei Shui Gui). Not the most elegant name indeed, but Rolex decided not to confuse people like Hublot had done by choosing a new official name and made it their official transcription. The Rolex watch brand image in China had become a key symbol of its success during the 1980s as it widely spread throughout Hong Kong to Guangdong.
Celebrity Marketing of Rolex in China
Rolex’s perception among Chinese customers is that the round face shape is deemed auspicious, and its golden crown logo symbolizes success, status and power. To keep this perception, the company chose the top Chinese musicians Lang Lang (朗朗), Li Yundi (李云迪) and Yujia Wang (王羽佳) as its brand ambassadors.
Experience Marketing of Rolex in China
Traditionally, Rolex’s marketing strategy focus on advertising artistic and athletic activities, using both domestic and international celebrities. The company sponsored one of the most favorite sports in China (Tennis) from 2009 to 2018. This strategy has ultimately strengthened Rolex’s perception among the Chinese, not to mention the upper-class crowd that normally follows tennis.
Understanding the market segmentation is a key element of Rolex in the Chinese market
International companies consider China as a huge potential market for profit, due to its economic development and population. Rolex’s success in the Chinese market has to do with a vivid understanding of the right market segment; they open shops in first-tier cities such as Shanghai and Beijing. Hong Kong seems to be one of the global luxury centers since before Rolex came to China, an industrious gateway to China with more than half of its women population has a passion for luxury.
Case study: Marketing strategy of Rolex in china
SWOT Analysis of Rolex in China
Marketing Mix of Rolex in China
Product: The brand was already famous, it has developed the unique product design, name, color and features both physically and psychologically to stand out among the market competition. Rolex in the Chinese market has successfully penetrated the luxury taste of Chinese customers, not only true brand name, image, and quality but also through packaging.
Price: Because its target customers were mostly upper class living in a first-tier and second-tier cities, along with the recognized brand prestige, the company chose a higher pricing strategy. Rolex in the Chinese market is currently facing a huge problem of counterfeiting, meaning consumers are starting to see fake Rolex watches sold in China at much cheaper prices, watering down the brands’ prestigious image, and leading to the loss of customer loyalty
Place: The Chinese Luxury watch market is like others watch market elsewhere on earth. From the beginning, the Rolex entered into Hong Kong’s market through one of the most successful luxury retailer in Hong Kong (Emperor Luxury & Jewellery), located in the ritzy shopping malls of central Hong Kong. However, presently, Rolex in the Chinese market is not limited only to the physical shops, but the company has established itself on online shopping platforms such as JD.com.
Promotion: This is one of the most important elements of Rolex’s China Marketing Strategy. Rolex had performed extraordinary well in promoting its product within a short period of time, despite its late arrival in the Chinese market compared to its competitors. The promotional strategies of Rolex in the Chinese market involve; celebrity endorsement, sponsoring sporting events such as Tennis, the China Sea Race, etc.
Market segmentation of Rolex in China
China is a huge market with a lot of potentials, but only for those who can sort out its complexities. Rolex’s success in the Chinese market has more or less to do with its segmentation, for which Rolex has critically examined before entering the market in China. Rolex narrowed down the large, diversified target audience into specific and defined groups: Age (20-45), income (Upper class & Middle class), location (Tier-1, Tier-2 and rarely Tier-3) and social class (Higher social class).
Capturing the first glance of the customer as an effective strategy used by Rolex in China
Rolex watch brand image in china is like other countries, as the brand image portrays power, success and achievement. The Rolex perception among Chinese customers was positive, despite the fact that some do consider the product as a symbol of extravagance and arrogance, while at the same time, mystery. According to Kevin Roberts, CEO of Saatchi & Saatchi: “Mystery opens up emotion. It lies in the stories, metaphors, and iconic characters that give a relationship its texture. The mystery is a key part of creating loyalty beyond reason.”
Rolex’s leveraging of mystery among a Chinese audience is elegantly summarized in the book, Luxury China: Market Opportunities and Potential by Michel Chevalier, Pierre Xiao Lu: “It combines the past, the present and the future, tapping it into dreams and inspiring through the myths and icons it creates. This is true of Rolex, which is certainly the most mysterious brand in the watchmaking world, not only because of its particular status and the secrecy surrounding its financial performance but also thanks to some key points of its communication strategy.”
Rolex’s success in China’s market
Rolex is the global leading manufacturer of watches. However, the situation is arguably different in China, where Omega leading the region. Rolex adopts different marketing strategies to win the market by exercising its effective marketing mix. Rolex in the Chinese market has significantly changed the passion for luxury watches among the higher social classes in China. With an effective marketing strategy, Rolex has become the Chinese luxury watch market being the second-largest luxury watch brand after Omega, despite being a late entrant.
Author: Abdulhamid Sillah
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