IN FOCUS: The demand for luxury watches in Singapore and why collectors turn to the gray market

SINGAPORE: It took Mr Jay Tun almost two years of deliberation before he bought his first luxury watch in 2018.

The S$16,480 Rolex Sea-Dweller, which is still in his possession, started him on a journey that has been “hard to stop”.

The 35-year-old has since spent more than S$300,000 on these timepieces. He now sees his watches, now valued at about S$400,000, as not just a passion, but also an investment.

“I don’t just like watches for the value. I like the watches for the different movements, different intricacies of the movements itself. It’s very intriguing … It’s like art to me,” he explained.

“Whichever purchase I want to buy, especially for watches, the numbers must make sense first. But of course the piece must be something that I like.”

For luxury watches like some of the ones Mr Tun collects, demand far outstrips the supply. Watches from brands such as Rolex, Patek Philippe and Audemars Piguet are among the most popular.

Buyers cannot just walk into shops and purchase these watches. There are usually long waiting or interest lists, especially for popular models, watch dealers and collectors said.

Mr Jarod Ng, co-founder of retailer Watch Capital which sells new and pre-owned luxury watches, said a lot of people find the waiting time too long.

“Let’s just say that you want to buy this as a wedding anniversary gift or you want to buy it for your son as a graduation present. You can’t be waiting for two years when he graduates in the next six months,” said Mr Ng.

Getting your name on the list also by no means guarantees you a watch.

“With the authorised dealer, I think a lot of people feel the same frustration as I did. You go there and they will give you the standard SOP (standard operating procedure) – that this is a highly sought-after piece, there’s this interest list,” said Mr Tun.

“If you don’t follow up, if you don’t buy anything more from them, likely you will never hear from them ever after.”

Even VIP customers have to wait a few months for a watch of their choice, said Mr Tan Khai Hsiang, who runs an online shop on Carousell called KHF Watch.

Mr Tan started out as a watch collector himself, and started buying and trading luxury timepieces on the e-commerce marketplace in 2019. He also purchases watches overseas on behalf of other dealers in Singapore.

GOING FOR GREY

New customers are often told that the watches they want are out of stock and so they turn to the gray market, Mr Tan said. The gray market is made up of retailers who are not officially authorized by brands to sell their watches.

Mr Tan likened the process to buying an exclusive bag like the Hermes Birkin. “For normal people, it’s impossible to get,” he said.

Mr Charles Lee, founder of Good Time Luxury at Far East Plaza, said that it became harder to get watches during the pandemic as customers could not travel overseas to buy them.

“Even if they walk into the boutiques, you can’t get the popular models. You can’t get the Rolexes, the shelves are empty. That’s why people have to buy from gray dealers like us.”

And some customers do not mind paying more to get what they want immediately.

More popular brands and models can cost between 20 and 30 per cent more on the gray market, while some can command almost double the retail price.

Checks by CNA on authorized dealer websites found that an entry-level Rolex Submariner model is listed for about S$12,000. On Chrono24, an online marketplace for watch buyers and sellers, the same model costs about S$22,000.

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