Market Overview

According to the data of Japan Clock & Watch Association, the size of the domestic watch market in 2022 based on the retail price was 871.4 billion yen, which was 122.1% of the preceding year. The growth for two consecutive years owes to the strong sales for luxury watches seen as real assets mainly by affluent segment, the demand recovery among foreign tourists visiting Japan, and the increase of brands that succeeded in attracting younger customers through promotion such as social media marketing. The growth was driven by the stable sales of imported luxury watches, mainly Swiss watches, and high-end watches of domestic brands. In view of the market by channel, department stores enjoyed strong sales, as they are the main retailers of luxury watches.

Noteworthy Topics

Elevating Demand for Luxury Watches Propels Market Growth

The COVID-19 crisis triggered an increase in demand for luxury watches, especially among the domestic affluent segment. The reasons for the rise include the rise of investment in watches as real assets, the global phenomenon in which household financial assets continue to expand faster than the rate of economic growth due to monetary easing, and the emergence of new customers that spent on luxury watches instead of leisure activities. The young affluent segment that purchased luxury watches as investment drove the demand in particular.

Future Outlook

The size of the domestic watch market in 2023 (based on the retail price) is forecasted to reach 1,003 billion yen, 115.1% of the preceding year. Although there is a headwind such as consumers becoming more inclined to save money due to rising prices, the market is expected to remain robust with core brands selling strong in addition to high-end brands, and with projections for further recovery in the inbound demand.

In recent years, in addition to watch retailers rendering extended warranty for items they sell, the watch market is witnessing watch brands putting efforts into building trust with customers through watch servicing. By fostering a “healthy” market where customers can feel secure in making watch purchases, we believe the market will continue to expand with new customers.

Research Outline