Why grandfather's old Rolex shouldn't stay buried in a drawer

PHOTO: Instagram/Alangesoehne

Three sleek, gleaming second-hand watches lay on a simple tray for customers to look at, their value astronomical — and increasing by the day.

These luxury, artisanal pieces — collectively worth just over US$1 million (S$1.37 million) — are elegant symbols of a world awash with Covid-19 recovery cash, with prices for prestige real estate, cars, jewels, art and watches soaring into the stratosphere.

The three watches — a Patek Phillipe, an A Lange & Söhne and an FP Journe — are on display in the sleek Hong Kong showroom of WatchBox, an e-commerce watch platform with a global presence.

Billed as a world leader in the field with an estimated worth of close to US$1 billion, WatchBox raised a further US$165 million from investors in November for expansion in a market now bulging with watch-buying options — from online auction houses to social media forums to e-commerce retail platforms.

With roots in Asia and the US, WatchBox buys, refurbishes, authenticates and sells luxury watches. It’s a booming business, helped by a perceived shortage of many new watch models that is seeing collectors pay big for pre-owned watches, with prices sometimes many multiples higher than the new versions.

“When we started in 2017, this WatchBox idea, they were estimating market size was US$5 billion,” says chairman and co-founder Liam Wee Tay, 62, a Singaporean industry veteran who now lives in Hong Kong. “So nobody was talking about it; they were just second-hand watch dealers, which have existed forever.”

Tay, who once ran a retail jewellery chain in Asia, thinks the second-hand watch market is now worth US$20 billion, while consultancy McKinsey has estimated it will grow to between US$29 billion and US$32 billion by 2025.

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“People are looking at real assets to put their money into … real estate, watches, cars — things that are valuable. Then it’s multipurpose — as an investment and also a hobby and a passion,” Tay says.

“This is a strange time we’re living in. It’s interesting to watch it develop.”

The extraordinary surge in second-hand watch prices has fuelled some illegitimate online dealing, Tay says, such as on certain online watch platforms where sellers can post a photo of an item for direct sale and then possibly provide an inferior, broken or fake product, leaving the buyer with little recourse. “A lot of these places are called marketplaces,” Tay says.

The frauds are partly in the nature of the transactions: sellers can retreat behind fake social media identities and it can be easier to simply accept the scam than try and fight it, particularly for international buyers.

“Everything is on consignment,” Tay says. “The seller posts and the buyer tries to buy it online and there’s no guarantee in terms of the condition of the watch, the quality of the watch. There’s a lot of misunderstanding or unhappiness.”

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WatchBox itself has had to deal with fakes in the past. “There have been a few cases where they ship us a fake watch and try and get a deal done,” Tay says.

Watch-collector unhappiness of a different type has recently been vented by consumers who want to buy new models of various stainless-steel sports watches, including certain Rolex models (such as the Daytona or Oyster Perpetual), or others such as the Patek Philippe Nautilus and the Audemars Piguet Royal Oak.

Although these models are almost unobtainable new from dealers, they can sell second-hand for double or triple the listed price, and there have been allegations of scalping and flipping.

Tay thinks this shortage of certain new models is a recent phenomenon and a result of limited production and pent-up demand for certain Swiss luxury models, particularly stainless-steel sports watches.

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“Sports models have always been in hot demand,” he says. “After Covid and the world went into this lockdown, I think it must have affected the supply chain and demand was pent up. These past two years, you see that — it doesn’t leave a nice taste in the mouth for all the consumers.”

Without the opportunity to buy new, many keen buyers turn to the world of buying second-hand online, hoping they avoid a 'Frankenwatch' of cobbled-together bits and pieces or a watch with a broken movement.

Tay says WatchBox provides a global two-year warranty on watch purchases, so customers can rest easy. “The whole idea is to create a trusted and safe environment for the customer so they can enjoy their hobby, their passion, with peace of mind.”

WatchBox specialises in post-1980s watches, although the firm does market a few vintage models. The company buys watches directly from owners (not via auction, Tay says) and sells them either online or via the firm’s bricks-and-mortar showrooms in cities around the world, such as its Hong Kong showroom in the city’s Central business district.

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Customers who choose to visit in person meet a company representative, view and handle watches, and discuss models’ history and value. WatchBox has also made and posted around 5,000 videos about watches on its website.

Experts can also advise on lesser-known watch brands that may later explode in value. Smaller watch brands to keep an eye on, Tay and his colleagues say, include FP Journe, H Moser, Rexhep Rexhepi and De Bethune (WatchBox made a major investment in DeBethune in August).

Tay says there is a large pool of unused watches in the world, waiting to be sold or traded. Families are often reluctant to dispose of luxury watches, even if they’re broken, so they lie neglected in drawers and boxes, gaining in value and becoming something of a 'sleeping asset'.

“A luxury watch has an intrinsic value,” Tay says. “Grandfather’s broken Rolex stays in the family and they just pass it down. The market has begun to realise and appreciate that.

“That’s where Watchbox comes in. We said, all right, we’re going to make that experience very pleasurable for you. Don’t look at this second-hand market, where they have all the worst practices. We bring a service to you which is white-glove.”

READ ALSO: How luxury watch & jewellery brands are doing their part for sustainability

This article was first published in South China Morning Post.

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