Saturday, September 1, 2012

Hong Kong Watch Business

Hong Kong is the world center for counterfeit watches.  Even the United States Government allows  people returning from Hong Kong to bring back one fake of just about anything.


However, travelers arriving in the United States may be permitted an exemption and allowed to import one article of each type, which must accompany the person, bearing a counterfeit, confusingly similar or restricted gray market trademark, provided that the article is for personal use and is not for sale.


Once a friend asked me to buy her a fake Rolex in Hong Kong.  For so many years I had ignored or rebuffed the fake Rolex sellers at the corner of Peking Street heading toward Canton Road in Kowloon, that when yet again I was offered a Rolex while waiting for the traffic to clear so I could make a safe crossing, I ignored the tout.

Halfway across the street, I recalled my friend's request, so I turned around and went back to the seller and said, "I don't want to buy a Rolex, I want to by a fake Rolex."  He looked at me strangely, and then said "What the hell do you think I sell?"

Ah! Having arrived at what was on order, I followed him underground to a room crowded with buyers, sellers and watches.  Impressive.  After selecting the Rolex, I inquired if they had any Tag Heuer items, and I was assured the Spring line would be available within weeks.

Now note that all of this "counterfeiting" takes place literally in the shadows of the authorized dealers of the real Rolex, etc.



So what is the effect on the market when there is unlimited counterfeiting next to the legitimate item for sale?

Why, all of the luxury brands have their best sales in Hong Kong.  Fully 20% of the world production of luxury watches is sold in Hong Kong.


Watches are big business in Hong Kong. In 2011, export figures from the Federation of the Swiss Watch Industry revealed that Hong Kong was the world’s largest single market for watches, with 21.2 per cent of Swiss production ending up here. That’s more than twice as much as the second-largest importer, the United States.
With such a dominant position, it’s no surprise that Hong Kong leads the world in luxury watches, meeting strong demand locally, but especially from the Chinese mainland. Luxury watches are not just worn and enjoyed, but are also considered solid investments, with the rarest timepieces commanding millions of Hong Kong dollars at auction.


The lesson is, if you want to have a good business, you must have a free market.  Hong Kong is only 7 million people, and USA is over 350 million people, yet Hong Kong is twice the market for luxury watches.

Here is more on Hong Kong watches.  Note design contests held by private entity HKTDC.


In the USA the government encourages young people to get on the food stamp program.

The government in Hong Kong has not bought 5 illegal bullets to be used on every citizen because they have free markets.  If we had free markets, we would have peace and prosperity too.  But lawyers, who are all Government workers, would rather rule in hell than be shoe clerks in Heaven.

Update:  Hong Kong is also becoming a watch-repair center.

Feel free to forward this by email to three of your friends.


0 comments: