HIGH-END timepieces have become an attractive alternative investment among young individuals, a trader of luxury watches said.
“Besides buying stocks, investing in jewelry pieces, many Filipinos are now into investing in luxury watches whether they are brand new or pre-owned,” said Jody Ledesma of Royal Movement Luxury Watch Store.
Royal Movement opened its first store in Davao City in 2023. Seeing the potential growth of the business, Ledesma brought the brand to Cebu City six months after, opening a physical store in Streetscapes in Barangay Banilad, partnering with entrepreneur Chase Cokaliong, among others.
Ledesma noted a significant spike in demand for pre-owned luxury watches like Rolex during the Covid-19 pandemic, whose value surged as people sought to acquire these high-end pieces but could not visit boutiques. Global supply chain disruptions also limited supply, further increasing market value.
“The luxury watch market during the Covid pandemic was at an all-time high. Because business was slow, people who had the money were looking for alternative investments. They turn to luxury watches and because of the high demand, prices shoot up,” he said.
Ledesma said his Rolex inventory is mostly pre-owned and its prices are higher than brand-new Rolex watches sold at SRP in Rolex’s stores in malls. His explanation: “Simply because you can buy it right away.”
Authorized dealers of some luxury items like watches often place their clients on a waitlist before they can get the model they want. The challenge is that many people are looking for the same watch, and given Rolex’s limited production per year, some clients cannot afford to wait.
“This is where we come in,” said Ledesma. He added they also assist clients if they request specific watch models.
The Davao-based entrepreneur bought his first Rolex Submariner Date in 2022. He said he saw the value of investing in a Rolex, as its popular models tend to hold or increase in value over time on top of the watch’s well-known design and functionality. Shortly after, he engaged in an online buy-and-sell business before setting up a physical store in Davao City.
“I think that the market now is open to exploring other alternative options when it comes to investment. They now see the value also of owning luxury items, such as watches,” he said.
Ledesma noted that these high-end timepieces aren’t solely for the affluent market. Some buyers are intentional in their purchases, understanding the potential for these items to appreciate over time.
“I have a buyer in Davao, a young professional, who saved his hard-earned money just to buy a Rolex watch,” he said.
Luxury watchmakers like Rolex produce their timepieces in limited quantities, creating scarcity. Besides being a status symbol, reflecting success and sophistication, limited editions and special models enhance the sense of exclusivity and increase demand among collectors and enthusiasts.
According to a Forbes report, Rolex production is estimated to be around one million watches a year, versus a brand like Patek Philippe, which only makes around 60,000 pieces annually. There are some exotic brands like Richard Mille, which only produces around 5,000 watches. A niche brand like F.P. Journe reportedly makes fewer than 1,000 pieces in a year.
Ledesma said these luxury items are market resilient, that even in economic downturns they tend to remain relatively robust. They are also considered tangible assets that can act as a hedge against inflation, preserving their value over time.
Ledesma added that he is also banking on the growing middle-income class in the Philippines as potential buyers and with younger millennials embracing luxury goods.
The Philippines is on track to achieving upper middle-income economy status by 2025. The rising middle and upper-income brackets are expected to bolster more spending. With more disposable income, more Filipinos will save and invest more. / KOC