IN FOCUS: The demand for luxury watches in Singapore and why collectors are turning to the gray market

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SINGAPORE: It took Mr Jay Tun almost two years of deliberation before he bought his first luxury watch in 2018.

The S$16,480 Rolex Sea-Dweller, still in his possession, started him on a journey that was “hard to stop.”

The 35-year-old has since spent over S$300,000 on these timepieces. He now sees his watches, now valued at around S$400,000, not only as a passion, but also as an investment.

“I don’t just love watches because of the value. I like the watches for the different movements, different intricacies of the movements themselves. It’s very intriguing… It’s like art to me,” he explained.

“Whatever purchase I want to buy, especially for watches, the numbers have to be right first. But of course the piece has to be something I like.”

For luxury watches like some that Mr Tun collects, the demand far exceeds the supply. Watches from brands such as Rolex, Patek Philippe and Audemars Piguet are among the most popular.

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Buyers can’t just walk into stores and buy these watches. There are usually long waiting or interest lists, especially for popular models, according to watch dealers and collectors.

Mr. Jarod Ng, co-founder of the retailer Watch Capital that sells new and used luxury watches, said many people find the wait time too long.

“Let’s say you want to buy this as a wedding anniversary gift or you want to buy it for your son as a graduation gift. You can’t wait two years if he graduates in the next six months,” said Mr Ng.

Getting your name on the list is also no guarantee for a watch.

“At the authorized dealer, I think a lot of people feel the same frustration as I do. You go there and they will give you the standard SOP (Standard Operating Procedure) – that this is a highly sought after piece, there is this interest list,” said Mr. Tun.

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“If you don’t follow through, if you don’t buy from them anymore, you’ll probably never hear from them again.”

Even VIP customers have to wait a few months for a watch of their choice, says Mr. Tan Khai Hsiang, who runs an online store on Carousell called KHF Watch.

Mr Tan himself started out as a watch collector and started buying and trading luxury timepieces on the e-commerce marketplace in 2019. He also buys watches abroad on behalf of other dealers in Singapore.

GO FOR GRAY

New customers are often told that the watches they want are out of stock and so they turn to the gray market, Mr Tan said. The gray market consists of retailers that are not officially authorized by brands to sell their watches.

Mr. Tan compared the process to buying an exclusive bag like the Hermes Birkin. “It’s impossible for normal people to get,” he said.

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Charles Lee, founder of Good Time Luxury in Far East Plaza, said it became harder to get watches during the pandemic as customers couldn’t travel abroad to buy them.

“Even if they walk into the boutiques, you can’t get the popular models. You can’t get the Rolexes, the shelves are empty. That’s why people have to buy from gray dealers like us.”

And some customers don’t mind paying more to get what they want right away.

More popular makes and models can cost between 20 and 30 percent more in the gray market, while some can fetch nearly double the retail price.

Checks by TUSEN on authorized dealer websites revealed that an entry-level Rolex Submariner is offered for around S$12,000. On Chrono24, an online marketplace for buyers and sellers of watches, the same model costs about S$22,000.

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