The vintage and pre-owned luxury watch market is thriving like never. It has transformed dramatically over the past few years with the arrival of strategic investors. One of the world’s leading second-hand watch e-commerce platforms, WatchBox, recently secured USD 165 million in funding to support its expansion. MONOCHROME reached out to Justin Reis, CEO of WatchBox, to discuss the development of the company and its plans for the future.
Xavier Markl, MONOCHROME – The second-hand or pre-owned luxury market is growing fast. So did WatchBox. What has been the road so far?
Justin Reis, CEO of WatchBox – Since WatchBox launched, we’ve welcomed physical expansion, a shifting mindset amongst collectors, the embrace of the pre-owned category by the industry, a global pandemic, and unprecedented demand for high-end, collectable watches. This “road” is an expressway!
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We launched WatchBox in November 2017, and in addition to our headquarters in Philadelphia, we established a presence in Hong Kong with the opening of our Collector’s Lounge in Central. Less than a year later, Patrik Hoffmann joined our team to lead WatchBox’s expansion into Switzerland and across Europe. In late 2019, we celebrated the opening of a Collector’s Lounge in Singapore and established a joint venture with Ahmed Seddiqi & Sons to launch WatchBox Middle East. With each new market, we get closer to our community, allowing us to deliver the highest quality service, tailor our inventory to meet consumer interests, and further the knowledge and passion for watch collecting.
What makes WatchBox’s proposition unique?
Having an established global footprint in the world’s major watch markets, combined with the incredible knowledge, passion, and commitment from our team to meet and exceed the needs of our clients worldwide, stand out as our greatest differentiators. We’ve structured our business to become lifelong partners with our clients and share in their collecting journey, and this is built upon a foundation of trust, education, and a shared passion for watches.
Our inventory is a perfect complement to this passion. WatchBox is home to the greatest collection of watches – from special pieces by independent brands and watchmakers to an extensive selection from the top brands – all of which is owned and in peak condition. As an inventory-based operation, WatchBox authenticates and invests in every piece that we sell, and our global quality standard ensures that each watch will be as close to “mint” condition as possible without compromising value at the time of sale.
What makes the WatchBox proposition most unique is this intersection, bringing knowledge and access to the most collectable watches in the world to our global community, without friction and with a shared love for collecting.
You have just secured USD 165 million in funding. How will WatchBox continue to develop its activities?
We will be investing heavily in media and technology as we continue to scale our platform, which will be in parallel to physical expansion into new markets across the U.S. and internationally. Throughout 2022, WatchBox will develop a presence in New York, Los Angeles, Miami, Houston, and Dallas, plus Zurich, Tokyo, and Riyadh.
What is your ambition?
Our ambition is to continue to develop the WatchBox community – a global and diverse group of enthusiasts and collectors connected by a shared fascination – while bringing together the world’s most collectable watches and sharing in experiences of discovery, education, and absolute enjoyment.
What are the growth drivers for the secondary market?
What would your advice be for novice collectors?
So many people will simply tell you to “buy what you love,” and I want to take this a step further. Have the confidence to collect eclectically, buying watches you truly like, and trading pieces that no longer bring you enjoyment or that serve as steppingstones to something else. Focus on making your watch purchases meaningful, learning about what drew you to any given piece, enjoying the process of discovery, the rituals around wearing your watches, and the dynamic community of collectors and enthusiasts.
A trusting relationship with the seller or dealer is among the most important factors in collecting, whether you are a novice or experienced collector. This extends from a guarantee of authenticity to a watch being in the condition described when it arrives at your doorstep, a warranty to cover issues related to mechanical defects, transparency into market value, and a commitment to help you find the right watch for you. Trust is the foundation for so much enjoyment – for both the collector and a company like WatchBox. Our team is truly obsessed with watches, and we love sharing in our clients’ collecting journeys.
Prices on the secondary market have risen sharply? Can we expect a correction at some stage?
The secondary watch market is stronger than ever, and while we anticipate some pricing stabilisation for extraordinary outliers, the overall macro trends are intact. This current strength gives consumers the confidence to purchase and invest in more expensive items, knowing that there will be a market for them should they wish to trade or sell these watches in the future.
The market for luxury collectables has been transformed throughout the pandemic era, opening watch collecting – which was once considered a niche hobby – to a much broader audience and accelerating changes taking place over the last decade thanks to social media and the internet. The market is getting bigger and bigger. And while watch collecting remains a hobby of pure passion for so many in our community, the energy and media attention has attracted many newcomers to the space, both new and emerging collectors, as well as those with an appetite for alternative investments. The demand is expected to continue exceeding supply on the primary market, which in turn perpetuates the current dynamic.
A few weeks ago, you acquired a majority stake in independent watchmaker De Bethune. Can we expect other such investments from WatchBox?
The opportunity to invest in great watchmakers will always be on our radar, especially in the realm of independent brands and brilliant watchmakers who have yet to benefit from the infrastructure of larger companies. We are incredibly proud to support Denis Flageollet and Pierre Jacques as they drive De Bethune’s next chapter of extraordinary watchmaking.
For more information, please visit www.watchbox.com.
How is WatchBox educating collectors?
I’ll break it down like this. I think that the world gets educated quickly when there is an interest in a specific sector like watches. Think about the modern, high net worth customer. They are educating themselves at night reading magazines and surfing the Internet. They are educating themselves at lunch, looking at Instagram, watching YouTube videos. At WatchBox, we create great content across all the channels that someone uses to educate themselves. We have articles in magazines like Revolution; we have a great Instagram account; we’ve got great YouTube videos; we’ve got online articles. We even have an incredible streaming app backed by hundreds of hours of shows made by our watch advisors, who are some of the most knowledgeable people in the world. A lot of times, people find WatchBox through these channels. We are often part of their educational journey in watches, because I feel content is everything. Why? Because, as I said, the second principle of WatchBox is to create trust.
These educational tools create the first level of trust. From there, they [the clients] come to our website. Now when they arrive, what they see is a transactional platform, sure, but it’s also a further educational tool. It’s got our videos, our articles, our testimonials — this is our brand image and represents the second level of trust. From here, a client can purchase a watch without talking to anyone. But what we really want is for them to engage with one of our client advisors, especially when we are talking about a watch costing 20,000 and above.
We transact on a 100,000-dollar watch daily, but we always want to give the client some guidance into what he or she is purchasing. What we really want is to learn about and understand that client. Firstly, why is he buying that watch? Is it for himself or a business partner; is it to celebrate something; is it for his son or daughter? Maybe he just wants it to show the world he’s someone special. All of this is important to us. Because a wristwatch means something different to every person. We want our clients to develop a relationship with a client advisor and not be passed around person to person. Our client advisors are genuine watch enthusiasts. I mean, they live, breathe, sleep and eat watches. We’ve got people all around the world, but the one common thread is that they love wristwatches. This interaction and shared passion create the third level of trust with us.
What did you learn from the pandemic?
In the pre-pandemic era, the ultimate level of trust was built through face-to-face interactions. We would meet you at an event, at our stores, on a road trip, at your house. We even had watch advisors being invited onto a client’s yacht to show him watches. One of the things that has come out of the pandemic is the idea of the Zoom interaction, where you meet each other or catch up with video conferencing. This has allowed us to meet so many more people. We have a watch advisor named George Mayer. He’s one of the best in the world. He regularly FaceTimes or Zooms with clients in Europe, and one of the recent developments is how many clients he’s interacting with in China.
The face-to-face meetings, the laughter and fun are really great. This one-on-one interaction is super important. Because now we’ve met each other, we have a relationship. There is a trust there, and if you always take care of this relationship, it can last forever.
What distinguishes WatchBox from all the other secondary players?
There are several other things that separate WatchBox from everyone else. The first is that we have the largest inventory in the world. Second to none. Especially when it comes to luxury timepieces from Patek Philippe, F.P. Journe, De Bethune and all the greatest brands in the world. The condition of all of these watches is impeccable. Whatever needed service has been taken care of. I would go so far as to say when a client receives a watch from us, 95 percent of the time, it is as good as being brand new.