Chinese Luxury Watch Ban Update

WANG Yuan X Chopard Swiss luxury watch

“China’s government banned effeminate men on TV and told broadcasters Thursday to promote ‘revolutionary culture,” apnews.com reports, “broadening a campaign to tighten control over business and society and enforce official morality.” On the face if it, the BTS backlash has little to do with a potential Chinese luxury watch ban. Until you consider a simple truism: culture eats strategy for lunch . . .

There’s a direct link between Chinese luxury watch sales and what the PRC press calls “fandom.” Young often androgynous celebrities are the country’s single most sought-after Swiss watch “ambassadors.” And for good reason: these “pretty boys” sell watches.

The Chinese Communist Party’s newfound and inescapable antipathy to “effeminate” celebs puts pop idols like TFBoys superstar singer and Chopard spokesperson Roy Wang (top of post) and Audemars Piguet-sponsored bandmate Lu Han (video above) in the PRC’s crosshairs. Any move to limit their visibility – easily and immediately accomplished under totalitarian rule – will have a direct impact on Swiss luxury watch marketing.

“On Saturday, microblog platform Weibo Corp. suspended thousands of accounts for fan clubs and entertainment news.” Ba-Bam! Done. Setting aside the obvious marketing meltdown, the move signals a seismic shift in China’s cultural landscape . . .

Beijing Chanel store

Broadcasters should avoid promoting “vulgar internet celebrities” and admiration of wealth and celebrity, the regulator said. Instead, programs should “vigorously promote excellent Chinese traditional culture, revolutionary culture and advanced socialist culture.”

The Chanel watch store in Beijing (above) opened in 2010, when the Party was still pursuing a laissez-faire attitude to its expanding upper class. All the major Swiss luxury watch brands were onboard, spreading stores throughout China’s major metropolitan areas. That was then. This is now.

The PRC has taken dramatic steps to force the “super-rich” to “pay their fair share.” It’s no great leap forward to posit that the Powers That Be will move from naming, shaming, taxing and/or eliminating the super-rich and banning ostentatious” displays of wealth on TV and the Internet, to frowning upon Swiss luxury watches. When the Chinese Communist Party frowns, it ain’t no party, it ain’t no disco, it ain’t no fooling around. In the meantime . . .

Chinese Swiss luxury watch sales July 2021

July stats from the Federation of the Swiss Watch Industry reveal that the post-pandemic U.S. Swiss watch market has gone nuts (relative to last year). But not as nuts as China; exports to President-for-Life Xi’s communist paradise are up a whopping 75 percent. Pre-pandemic, some 50 percent of all Swiss watch exports flew off to the PRC. As China continues to spool-up, forecasters expect that trend to reassert itself.

The Communist Party’s moves to ameliorate the country’s staggering income inequality have led to less optimistic analysis. Should the worst happen, should the Chinese market for luxury Swiss watches crater, America won’t be able to fill the gap. The Swiss luxury watch industry will crater too.

The Guns of August 2

Why is China suddenly butching-up the culture and launching a Holy War on wealth? Building on his most excellent article Swiss Watchmakers – China Syndrome? our man Adams sees dark clouds gathering on the horizon.

This whole thing feels like The Guns of August, with the Xi taking on the part of the Kaiser. When a government starts fretting that their young men aren’t masculine enough that’s usually code for “we’re not getting what we want in our military recruits.”

The video-gaming crackdown also has a physical-fitness component to its logic. What started as a seemingly unrelated consolidation of power is definitely taking a more specific-to-military-readiness tone.

Chinese Rolex store

The idea that the Swiss watch industry is about to take a major hit inside China (now including Hong Kong!) could be mistaken conjecture on our part. It could also be a trifling matter: a none-too-serious, temporary echo of the anti-corruption crackdown that dinged Chinese luxury watch sales back in 2014.

Or it could be a canary in the coal mine, warning us of Chinese ambitions. None of which bode well for individual liberty or political stability. Watch this space.

14 comments

  1. If I had to guess, this isn’t about military preparedness so much as a dog whistle. This is about bashing Japan and South Korea without actually naming either country.

    1. I initially thought that but the gaming crackdown took pains to call out physical health as a reason. Either of these by themselves, yes, but together…? It sounds familiar.

      1. Come to think of it, it could be both. They get a “two for the price of one” with messaging like that 🙂

  2. That opening quote is priceless. I assume something is going to give in only a matter of time, but when and where. Welp, I guess doing business with a communist country is actually a bad idea, who would have thunk it?! I feel nothing for these companies.

    1. I have to admit feeling the exact same way. No sympathy. At all. In fact, I’ll further admit to enjoying watching the impending train wreck. If Rolex loses what now amounts to 50% of it’s market… that is NO BUENO for them. And, it’s no bueno for watch dealers who have been raking in the cash on the inflated Rolex prices of the last few years.

      It is MUY BUENO for Rolex fans who were shut out of the market yet still pine for one. Fire sales are comin’ folks!

  3. I invested in Swatch Group last year as the Covid was rocking stock markets. Since then, I’m up nicely… over +25%. However, these disturbing new developments put at serious risk my $140 stake… I’ll be watching closely!

  4. I’m fine with the war on girly men. I just hope it doesn’t further the large diameter watch preference on AliExpress. Excellent Chinese traditional culture, please support case diameters in the low to mid 30’s.

  5. US nukes freed China from Japanese imperialism, and Chinese nukes continue to keep the Chinese free from everyone but themselves. Large standing armies are irrelevant to defense and serve as politically acceptable jobs and welfare programs.

    The reason the Chinese are fighting androgyny and video games is a change of heart on the most successful environmental policy in human history – the one-child policy. Modern armies do not have standards, but Chinese women do.

    I am a big fan of mechanical watches, but they are a trivial single digit part of the Swiss economy. Hiding money pays the bills. The Chinese wealth crackdown might be bad for the Swiss watch industry, but it will be great for Switzerland.

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