Is Rolex following Patek’s strategy …

[Dhiren]

Interesting read

“In-Depth: Why Patek Philippe's Thierry Stern Is Stubborn About Steel” via @watchvillehttps://api.watchville.co/v2/posts/44251/click


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[WatchLurv]

Patek's production: ~60,000 pieces
Rolex's production: ~750,000 pieces (granted the last COSC numbers in 2017).

Patek has around 400 shops worldwide. Rolex has....4000?

What I believe Rolex is doing is holding back on supply. Patek is doing the same. My Patek AD used to get 3-4 5711/1A in the shop. Last 2 years they've gotten 1. They used to get the same for the 1R...Now they're getting 1 a year. They're creating some buzz around their brand thats for a certain.

[Yobber76]

I do believe Rolex wants to move their customers upstream to more TT and PM, but they won't give up on SS watches.
This will probably balance off more somewhere in the future.
Truth is, people are buying more TT and PM according to ADs I've asked.

[AK797]

No one has any strategy, they were both just ideally placed as market leaders when the tidal wave of global demand in 16, 17 came looking for watch/investments in this SM age.

[notchview]

Rolex is absolutely doing the same thing Patek is doing with their SS watches. Rolex's biggest asset is their BRAND - they always need to protect the crown. If they shifted production to meet SS demand (which is the low-end of their business) they would erode the prestige of their high-end pieces.

Above all else, owning a Rolex, Patek, FP Journe, etc. is a PRIVILEGE. If people don't like that, they can get an Invicta. Moreover, how would you feel as a Rolex owner if they let the value of their pieces crash?

This is why I hate the whining on the forums. When I see someone complaining, I see someone who doesn't understand the value of the watch, which is really a form of art, and thus shouldn't own one in the first place.

[MSchott]

Originally Posted by notchview

Rolex is absolutely doing the same thing Patek is doing with their SS watches. Rolex's biggest asset is their BRAND - they always need to protect the crown. If they shifted production to meet SS demand (which is the low-end of their business) they would erode the prestige of their high-end pieces.

Above all else, owning a Rolex, Patek, FP Journe, etc. is a PRIVILEGE. If people don't like that, they can get an Invicta. Moreover, how would you feel as a Rolex owner if they let the value of their pieces crash?

This is why I hate the whining on the forums. When I see someone complaining, I see someone who doesn't understand the value of the watch, which is really a form of art, and thus shouldn't own one in the first place.

Not even sure where to start on this. For nearly all Rolex customers, value is not an issue. They just want the watch. Secondarily they may know that their watch will hold its value but they don't intend to ever sell so it's a moot point. As far as your last sentence, pure snobbery.

[eijiboy]

but but people here said its the economy! its china booming!! they still making the same amount of watch ever since! patek ceo is having a laugh right now lol!
what patek ceo is doing is same as in sneakers like off white or yeezy. low supply high demand! i wont be surprise if rolex is doing the same thing on ss so that tt and pm will be relevant to their line up.
we want what we cant have!

[notchview]

Originally Posted by MSchott

pure snobbery.

Nothing to do with snobbery. Again, it's brand management, the value is 100% perception. If Rolex flooded the market with SS models and everyone had one, the value would plummet. Has nothing to do with people not intending on selling.

[Tenebris Equum]

Strategy is the same, but the two are nothing alike.

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[Chewbacca]

What else could the CEO of PP say? He's right. Its a catch 22.

And the bulk of Swiss makes have plenty of superb SS models they'll sell you today, for less, or even more. Rolex & PP and the lot aren't manipulating anything, and Rolex doesn't copy anyone (any more anyway...). And they represent a smaller pct of worldwide watches available.

Simply expand your world view of watches and get outside the comfortzone. The best way to send a message to Rolex or PP or whatever, is with your wallet.

[Tha Baron]

Originally Posted by MSchott

Not even sure where to start on this. For nearly all Rolex customers, value is not an issue. They just want the watch. Secondarily they may know that their watch will hold its value but they don't intend to ever sell so it's a moot point. As far as your last sentence, pure snobbery.

I’d bet a huge majority of rolex buyers buy a Rolex because of value retention as their most important criteria... it’s ehy the brand is so desirable

[cbalster]

A very small percentage of the Rolex range retains value. Nothing ladies and most Pm drop like a new car the moment you buy it.

[MSchott]

Originally Posted by notchview

Nothing to do with snobbery. Again, it's brand management, the value is 100% perception. If Rolex flooded the market with SS models and everyone had one, the value would plummet. Has nothing to do with people not intending on selling.

You’re looking at it in the current bubble. Look at the price of a Sub long term. They retain or gain value in general. It’s also a theory that Rolex is limiting production of SS models. They say demand is at record levels and they can’t keep up. Personally I’d never pay $26k for a SS Daytona. It’s not worth it as a watch and it’s a bad investment long term.

[Topspin14m]

The difference is that Patek's reputation is built on PM dress watches. They added steel as a small part of their business and they don't want to be subsumed by it. Rolex has always had a significant percentage of their business in SS watches. It is part of what the brand is known for -- every day wearable luxury watches with bullet proof movements. E.g. could you even imagine a Deep Sea Patek?! Making a significant number of additional SS watches would not change Rolex's brand the way it would alter the Patek brand. Apples and oranges.

Also -- We are a long way from the point where the Rolex market is "flooded". You can make enough inventory to keep a few watches in the case without "flooding" the market. This isn't an all or nothing proposition.

[semi-ambivalent]

Originally Posted by notchview

Above all else, owning a Rolex, Patek, FP Journe, etc. is a PRIVILEGE.

In a Capitalist market money buys anything, especially with easy credit if you have a pulse. Rolexes are sold for currency. There is no genuine privilege; this is why they have resorted to manufactured scarcity. They were selling too many watches, probably/especially even of the very pricey models and they became worried Rolex was becoming (I can barely type the word)...common.

I'm still really wanting an OP34 white dial to rotate with a DJ I've had since '78 but I tried one on in Carmel and although the Oyster bracelet looked really nice the clasp was so thick and blocky as to be almost amateurish. I'd have to put a strap on it. In any case, the whole scarcity charade with popular models, and now the allocation of even "lesser" pieces apparently beginning, my enthusiasm for the brand is fading. I've always been convinced of (and vocal about) the technological precision of the product but there's just too much empty attitude coming from the boardroom these days. Perhaps rather than scarcity pieces are simply not moving. Better to hide the overproduction. Time will out the reason, it always does. And, no, it's not sour grapes. Best luck to all here still chasing that grail.

[Frits1980]

Depends a lot on the size of your collection. Buy what you like if we are talking about one or a couple of watches, sure np. But with 10/20+ collections value retention becomes an important factor. I have 20+ watches. Like them all but i wouldnt have 20+ watches if they wouldnt hold their value. That case ill just stick to 2/3. I can justify some gold pieces or pateks even do i only wear them a couple days a year simply because they hold value. Nothing to do with snobbery.

As for Rolex wanting to compete with Patek. I dont see how, Patek is different level. Rolex would have to launch some new (complications/upscaled) models. Who knows, maybe the skydweller was a first step in that direction.

[Fat_ninja]

I don’t think I’ve read that article. Thank you for sharing

[Jamie1111]

Nice article, thanks for the link :)


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[notchview]

Originally Posted by semi-ambivalent

In a Capitalist market money buys anything, especially with easy credit if you have a pulse. Rolexes are sold for currency. There is no genuine privilege; this is why they have resorted to manufactured scarcity. They were selling too many watches, probably/especially even of the very pricey models and they became worried Rolex was becoming (I can barely type the word)...common.

Yes, agree, becoming common will destroy the brand. By “privilege,” I’m referring to the feeling that Rolex wants its brand to create. I don’t think they’ve resorted to manufacturing scarcity, I think demand has outstripped supply. Rolex has said it’s creeped capacity each year, but won’t double capacity because flooding the market will hurt Rolex more when the process recede.

Like Patek, at least here in Houston, they’ve cut their AD network by almost 50% to make the cases look more full.

[enjoythemusic]

Agree, brand management.

It is like Ferrari making 399 of a car when there is demand for 400. Remember talking with their sales team during a private tour of the factory floor in Maranello when they were building the Enzo...

Of course we also need to account for the current Monster Bubble in financials and people running away from devaluating currencies. It will be interesting when the Everything Bubble pops.

[WatchLurv]

Rolex is common in Hong Kong. It's also the only place in the world, the size of London (actually smaller) where you can find 30 Rolex shops.

Everyone has a Rolex here. That's from bus driver to cab driver to the odd construction worker.

I know for a fact that Rolex has delivered less to the ADs over the past 3 years on a month by month basis. How many they've produced, I don't know since no one really knows except their management in Geneva and COSC (who can't release these numbers). The guess is...Have they produced the 800K-1M pieces as previously, and holding back or have they ramped down production to say 300-400K pieces and thus selling out of these? :-)

[notchview]

Originally Posted by WatchLurv

Everyone has a Rolex here. That's from bus driver to cab driver to the odd construction worker.

Realistically, those are likely fake. I lived in Shanghai and had friends that would regularly pick up decent fakes on Nanjing road as gag gifts.

[Ichiran]

Originally Posted by notchview

Realistically, those are likely fake. I lived in Shanghai and had friends that would regularly pick up decent fakes on Nanjing road as gag gifts.

The claypot rice and marbled beef at Kanpai Classic near the bund are super.

[cbalster]

someone stated above the HK has 30 ADs. I believe the true number is closer to 60. HK is 15% of the market in Swiss watch sales, so per capita it is a massive outlier and hugely important for the industry/Rolex.

[pam66]

Originally Posted by notchview

Realistically, those are likely fake. I lived in Shanghai and had friends that would regularly pick up decent fakes on Nanjing road as gag gifts.

i have never seen a decent fake on nanjing road shanghai, but i did not follow most of the solicitations. chungching mansion in hongkong nathan road is more interesting. they have RMs which are totally indistinguishable from what the ninja bought for his daughter. possibly out of the same plastic factory:::))))

[Aquaman]

Originally Posted by pam66

i have never seen a decent fake on nanjing road shanghai, but i did not follow most of the solicitations. chungching mansion in hongkong nathan road is more interesting. they have RMs which are totally indistinguishable from what the ninja bought for his daughter. possibly out of the same plastic factory:::))))

OUCH almost SAVAGE

[notchview]

Originally Posted by pam66

i have never seen a decent fake on nanjing road shanghai, but i did not follow most of the solicitations.

Off of one of the side streets on the west end there is a shop with a fake wall in the back leading upstairs, with drawers and drawers of $50 watches.

[GreenLantern]

Originally Posted by enjoythemusic

Agree, brand management.

It is like Ferrari making 399 of a car when there is demand for 400. Remember talking with their sales team during a private tour of the factory floor in Maranello when they were building the Enzo...

Of course we also need to account for the current Monster Bubble in financials and people running away from devaluating currencies. It will be interesting when the Everything Bubble pops.

As a sidenote, and I don't mean to burst anyone's bubble here, but...

Ferrari claims this stuff, and it's really great marketing, but there's extensive evidence that they always produce far more than the X99 they claim. :) It's also the reason why they never number their cars (i.e., 238/399).

Well known "issue" amongst Ferrari collectors. None of us care, of course, because the cars are quite awesome, and mostly retain or gain value. But still, it's great marketing for the commoners, but it's a lie. A complete lie.

[GB-man]

Originally Posted by GreenLantern

As a sidenote, and I don't mean to burst anyone's bubble here, but...

Ferrari claims this stuff, and it's really great marketing, but there's extensive evidence that they always produce far more than the X99 they claim. :) It's also the reason why they never number their cars (i.e., 238/399).

Well known "issue" amongst Ferrari collectors. None of us care, of course, because the cars are quite awesome, and mostly retain or gain value. But still, it's great marketing for the commoners, but it's a lie. A complete lie.

You just signed up for a diatribe about what it was like back in the day when Ferrari’s were actually well made, Pateks were quality and tits were round. Good luck

[GreenLantern]

Originally Posted by GB-man

You just signed up for a diatribe about what it was like back in the day when Ferrari’s were actually well made, Pateks were quality and tits were round. Good luck

Hahaha. Yes, yes, indeed.