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Watches have become a bit like horses or combustion cars might become in a few years -- items that have lost most of their practical value attached to industrie

Watches have become a bit like horses or combustion cars might become in a few years -- items that have lost most of their practical value attached to industries that need to focus on higher and higher prices in order to inflate their veblen good status. I enjoy watches, especially mechanical ones, and a bit of the marketing and story behind them, but even as a upper income individual, I find their prices to be completely unabsorbable. Rolexes and Omegas start at 8000 and their second hand market has become just as artificially inflated. An Audemars steel watch starts at 13k! These are impractical prices for all but the very wealthy and betray the working class value that their origin stories rely on. But what I find really fascinating is the Chinese replica market, which now can make nearly identical watches at almost 1/100 the cost. Does the fact that you can own a completely identical Rolex for just 500 dollars not call into question the swiss market veblen good strategy? I predict a significant crash in sales forcing some of the brands out of business and maybe inspiring a few to make a real middle class watch. But it's a powerful lesson that China can now manufacture even the most "hallowed" quality to practically the same degree.

semi-extrinsic 10y ago
As I understand it, the Chinese replica market buys essentially all their movements as genuine goods from Japanese manufacturers like Seiko. The movements (i.e. the really complicated parts to make) for expensive quartz watches cost less than $50. So the Chinese don't have to replicate the tricky part, they just have to build a mechanical case from mineral or sapphire glass and stainless steel that's pressure tight to (usually) 10 or 20 bar, and fit a strap to it. (I'm wearing a sub-$50 Parnis flyback chronograph as I type this.)
- hanklazard 10y ago
  Hmm, that's not my understanding. Most higher-end replicas use "Asian" ETA clones (ie A2824 and others). The manufacturers have copied ETA parts over the years and now are able to create fairly reliable and, when they want them to, authentic-appearing Swiss movements, at least to the untrained eye. This brings the cost down much lower than the Seiko and Miyota automatics, which even purchased in bulk are much more expensive than Asian ETA clones. These Chinese movements look the part, but tend not to last as long, have larger tolerances, etc. Source: a number of watch shops around my city where people frequently try to trade-in fake watches.
  - semi-extrinsic 10y ago
    For automatics, I think you are right. I've seen this mainly for quartz or mecha-quartz movements.
falcolas 10y ago
For better or worse the cost of skilled human labor, particularly someone trained as a watchmaker, is damned expensive. Supply and demand. Can you get a similar, and perhaps even better constructed (machines are, after all, more precise than humans) watch from China? Sure. Is it the same watch? No. These watches are luxury items - a status symbol. They are the Rolls Royce of watches: built by hand, damned expensive, and worth every penny to those who buy them. Of course, if you prefer the watch from China, then more power to you. I prefer my Dodge car over a Rolls Royce as well; I don't need or want a symbol, just a good car.
- tsunamifury 10y ago
  My question was more at the level of "What if you could buy a Rolls Royce from China that was in ever way, practically identical and cost as much as your Dodge?" What would that do to the car market?
  - falcolas 10y ago
    To the real Rolls cars? Probably not much. Mostly, I would see them putting a bit more effort to ensure their cars are easily distinguishable from the Chinese clones. They aren't, after all, really that much better than regular cars in the first place. A simple $40,000 luxury model from BMW or Audi is quite comparable in terms of fit and finish. The types of leathers and woods will differ, but for the purposes of a daily driver, that would make no practical difference.
    - md_ 10y ago
      In a way, the whole thing is much weirder. As Shteyngart notes, mechanical watches are in almost all ways inferior to quartz in terms of utility. But because of that inferiority (and sensitivity to manufacture), the difference between poor and high quality mechanicals is much more readily observable by the owner than for a quartz. (If my watch gains or loses 30s/day--a reasonable performance for a Seiko 7s26--I will quickly notice, whereas if my quartz gains or loses one second, I may not.) In the car case, the spectrum is basically continuous; in watches it's segmented in this very peculiar way.
hanklazard 10y ago
For the response from the European watch industry, see Haute Horology. While true that the replica manufacturers have become really good at making some of the most popular mass-manufactured watches out there (submariners, base PAMs, APs), they do not have the skill or craftsmanship to make the types of grand complications and finishing techniques that these artisans possess. A lot of Haute Horology brands also make their watches only out of precious metals, and this is something that cannot be cheaply replicated. Of course, these watches end up costing much more than most people's cars (A. Lange & Sohne being maybe entry-level haute at 25-30k). I'm basically agreeing with you but just adding that I think the replica market has actually pushed the Swiss/Germans into even more amazing feats of engineering and finishing. I'm not sure that the business side will work out but here's a sample of some of the insane beauty and craftsmanship that has resulted: FP Journe: https://youtu.be/0nJ0_TVdkmQ https://youtu.be/0nJ0_TVdkmQ Greubel Forsey: https://youtu.be/ShtL3rKPhQA https://youtu.be/ShtL3rKPhQA

semi-extrinsic 10y ago

As I understand it, the Chinese replica market buys essentially all their movements as genuine goods from Japanese manufacturers like Seiko. The movements (i.e. the really complicated parts to make) for expensive quartz watches cost less than $50. So the Chinese don't have to replicate the tricky part, they just have to build a mechanical case from mineral or sapphire glass and stainless steel that's pressure tight to (usually) 10 or 20 bar, and fit a strap to it. (I'm wearing a sub-$50 Parnis flyback chronograph as I type this.)

hanklazard 10y ago
Hmm, that's not my understanding. Most higher-end replicas use "Asian" ETA clones (ie A2824 and others). The manufacturers have copied ETA parts over the years and now are able to create fairly reliable and, when they want them to, authentic-appearing Swiss movements, at least to the untrained eye. This brings the cost down much lower than the Seiko and Miyota automatics, which even purchased in bulk are much more expensive than Asian ETA clones. These Chinese movements look the part, but tend not to last as long, have larger tolerances, etc. Source: a number of watch shops around my city where people frequently try to trade-in fake watches.
- semi-extrinsic 10y ago
  For automatics, I think you are right. I've seen this mainly for quartz or mecha-quartz movements.

falcolas 10y ago

For better or worse the cost of skilled human labor, particularly someone trained as a watchmaker, is damned expensive. Supply and demand. Can you get a similar, and perhaps even better constructed (machines are, after all, more precise than humans) watch from China? Sure. Is it the same watch? No. These watches are luxury items - a status symbol. They are the Rolls Royce of watches: built by hand, damned expensive, and worth every penny to those who buy them. Of course, if you prefer the watch from China, then more power to you. I prefer my Dodge car over a Rolls Royce as well; I don't need or want a symbol, just a good car.

tsunamifury 10y ago
My question was more at the level of "What if you could buy a Rolls Royce from China that was in ever way, practically identical and cost as much as your Dodge?" What would that do to the car market?
- falcolas 10y ago
  To the real Rolls cars? Probably not much. Mostly, I would see them putting a bit more effort to ensure their cars are easily distinguishable from the Chinese clones. They aren't, after all, really that much better than regular cars in the first place. A simple $40,000 luxury model from BMW or Audi is quite comparable in terms of fit and finish. The types of leathers and woods will differ, but for the purposes of a daily driver, that would make no practical difference.
  - md_ 10y ago
    In a way, the whole thing is much weirder. As Shteyngart notes, mechanical watches are in almost all ways inferior to quartz in terms of utility. But because of that inferiority (and sensitivity to manufacture), the difference between poor and high quality mechanicals is much more readily observable by the owner than for a quartz. (If my watch gains or loses 30s/day--a reasonable performance for a Seiko 7s26--I will quickly notice, whereas if my quartz gains or loses one second, I may not.) In the car case, the spectrum is basically continuous; in watches it's segmented in this very peculiar way.

hanklazard 10y ago

For the response from the European watch industry, see Haute Horology. While true that the replica manufacturers have become really good at making some of the most popular mass-manufactured watches out there (submariners, base PAMs, APs), they do not have the skill or craftsmanship to make the types of grand complications and finishing techniques that these artisans possess. A lot of Haute Horology brands also make their watches only out of precious metals, and this is something that cannot be cheaply replicated. Of course, these watches end up costing much more than most people's cars (A. Lange & Sohne being maybe entry-level haute at 25-30k). I'm basically agreeing with you but just adding that I think the replica market has actually pushed the Swiss/Germans into even more amazing feats of engineering and finishing. I'm not sure that the business side will work out but here's a sample of some of the insane beauty and craftsmanship that has resulted: FP Journe: https://youtu.be/0nJ0_TVdkmQ https://youtu.be/0nJ0_TVdkmQ Greubel Forsey: https://youtu.be/ShtL3rKPhQA https://youtu.be/ShtL3rKPhQA