In the last 18 odd months, the words “pre-owned” have cropped up time and again in industry conversations. Estimated to be worth $16 billion annually according to an estimate by financial services company Kepler Cheuvreux, pre-owned watches is no longer the realm of auction houses, pawn shops, or dodgy grey market dealers.
While there have been smaller players like Timepiece360, Luxury Closet, among others operating in Dubai; the entry of Watch Box, the Philadelphia-based eCommerce platform for pre-owned watches, into the region is set to give the pre-owned market a big fillip. WatchBox Middle East is a joint venture between the company and Dubai-based retailer Ahmed Seddiqi & Sons. This is the latter’s first venture into the secondary market and the company’s Chief Commercial Officer Mohammed Abdulmagied Seddiqi had mentioned to us during an interview last year that they were going to enter the pre-owned business soon.
“The ability for customers to trade watches and recognize value enables them to buy new watches more frequently, increasing the overall selling velocity in the market. A high quality, trusted, transparent secondary market also amplifies confidence in the primary market,” explains Mohammed, the grandson of the late founder of the luxury retailer. “Major luxury watch brands are beginning to recognize how the secondary market drives new watch sales and are paying attention to the secondary market value of their watches, as well as working on solutions for customers who want to trade in watches towards the purchase of new watches.”
WatchBox combines its online platform with white-glove customer experiences. It was launched in 2017 and has already expanded to markets in Switzerland, Hong Kong, Singapore, and South Africa before entering the Middle East. It reported a $200 million revenue run rate for 2019 with the goal to grow to $500 million in the next 3-5 years. Over 45,000 watches were traded and sold over the last two years, according to the figures we have obtained. Approximately 100 transactions (sold, purchased, traded) happen each day across all locations.
“Long established retailers like Ahmed Seddiqi & Sons have done a remarkable job in building demand and consumer interest in the luxury watch category across the Middle East – to the tune of over CHF 20 billion (at retail value) exported from Switzerland over the last 18 years.
Yet, the market lags behind other major watch centers in offering a trustworthy secondary market solution; offering trade-in services and selling desirable and collectable pieces no longer in production – or not readily accessible on the primary market,” says Amanda Ellison, Global President and Chief Operating Officer at Watchbox.
It is estimated that WatchBox has pumped in $10 million into this joint venture with the Dubai retailer. This includes the opening of a 1,721 square feet standalone store at the Dubai International Financial Centre (DIFC) and there are plans to open shop-in-shops at select Ahmed Seddiqi & Sons’ stores. The WatchBox model delivers access to their entire global inventory, valued at over $80 million. Hopefully, WatchBox’s experience in the pre-owned space combined with the credibility of their retail partner will help elevate conversations about pre-owned watches in the region.
“WatchBox prides itself on its white glove service, the experience of buying or trading a pre-owned watch should be as close as possible to buying a new watch. Accordingly, watches are evaluated, authenticated, and brought as close to mint condition before being presented for sale,” says Ellison adding that each watch is accompanied by a two-year WatchBox warranty. According to Ellison, what really differentiates WatchBox from anything else that already exists in the region is the fact that the customer experience is “something in between” e-commerce and traditional bricks and mortar retail. “Up until now, the pre-owned landscape in the region has been rather fragmented, with activity among small second-hand dealers, as well as watches traded privately between collectors.
The watches available ‘out there’ may be authentic, but you will find a wide variance in condition, a factor that led WatchBox to define its global quality standard for the modern pre-owned space. If we limit this discussion to businesses that are ‘established’ in the traditional sense, those that exist in the region cater primarily to the vintage market, with recent auction activity from Christies and Sotheby’s, and shops such as Momentum. WatchBox’s expertise is in the modern pre-owned arena,” she says.
The hottest commodity across the Watchbox platform remains the stainless steel luxury sports watch, specifically the ones on steel bracelet. This encompasses the full spectrum of Rolex Professional watches, Patek Philippe’s Nautilus collection, and Audemars Piguet’s Royal Oak, among others. The most expensive watch sold on WatchBox this far has been a $2 million Patek Philippe. The DIFC store here stocks hard-to-get models like the Patek Philippe Nautilus Ref. 5711and the Rolex GMT-Master II, but just don’t expect to buy it at list price.
“Across all regions, WatchBox specializes in the unique and complicated models by Patek Philippe and F.P. Journe, and we tend to realize higher price point sales in our Hong Kong and Singapore locations. We anticipate that the Dubai market will follow this trend,” says Ellison. According to Danny Govberg, CEO of Watch Box, interest for indie watchmaker F.P. Journe has been steadily rising over the last few years as more people come to recognize the talent and ingenuity of the watchmaker, and just how limited its production is. “The overall secondary market value of the brand really popped within the last six months, particularly for the early brass movement models which command a significantly higher premium,” observes Govberg.
Given the spike in popularity of vintage watches in the auction market, is there scope for expansion in the vintage category in this region? “Perhaps in the future. Our focus today is on building and growing the modern pre-owned space,” answers Ellison.
Incidentally, WatchBox’s sister company is the US jeweler Govberg. Richemont recently announced that it was going to pull out all its brands from Govberg since the luxury conglomerate now owns WatchBox’s competitor, the UK-based WatchFinder. Incidentally, WatchBox in the region is not limited to just brand’s retailed by Ahmed Seddiqi & Sons. Did any of the brands that work with the Dubai retailer have any reservations about them entering the pre-owned business? “We enjoy well-established and trusted relationships with all of our brands. So far we have only received positive feedback in relation to this endeavor,” signs off Mohammed Abdulmagied Seddiqi.