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Long clichéd as a no-rush continent, Africa is turning into a fledging market for luxury timepieces on the back of rising consumer spending on luxury goods and the investment opportunity associated with pre-owned top-brand watches
Johannesburg, South Africa | BIRD AGENCY | From “no rush” to “time is precious”, a new crop of African middle-class buyers is splurging on luxury timepieces due to the growing global profile of high-end watches, both as a status symbol and a profitable investment.
Be it South Africa, Kenya, Egypt or Morocco, cash-flush consumers are increasingly buying prized timepieces, with high-end watch brands such as Rolex seeing a surge in sales.
This comes on the back of the collapse of the global crypto market, which many Africans had begun to view as a viable investment option but which monied Africans are now ditching for less volatile – but equally mobile – assets.
South Africa accounts for nearly half of Africa’s US$262.8 million generated through luxury watch sales as of February 2023.
Statista figures show revenue in the fancy watch segment in the rainbow nation topped US$125.3 million in 2023 and is forecast to grow at a compounded annual rate of 2.18% between now and 2028.
Globally, the data portal shows revenue in the luxury timepieces segment amounted to some US$48.4 billion in 2023, with the market expected to grow annually by 2.38% in the forecast period.
While the luxury watches segment in Egypt is likely to shrink slightly to US$37.5 million by 2028 as the market sheds pandemic-induced shocks, in Kenya, the watches and jewellery segment is anticipated to experience an impressive 8.15% growth from 2023 to 2026. Similarly, South Africa’s watches and jewellery segment is expected to jump 7.22%, leading to a market volume of US$1.27 billion by 2026.
Statista also predicts a modest 0.55% growth in luxury timepiece purchases in Morocco during 2023-2027, culminating in a market volume of US$34.85 million by 2027.
Africans’ increasing obsession with pricy wristwear comes as reports show that watches held their value during the global economic downturn.
Unlike stocks or real estate, luxury watches are portable, and their value is not as easily affected by market fluctuations. This makes them a more attractive investment option for those looking to hedge against economic uncertainty.
But it is the growing market for pre-owned timepieces triggered by what is hugely considered as artificially created shortages that could spike even more purchases in Africa.
According to McKinsey, the pre-owned luxury watch market was worth US$1.8 billion in 2018 and forecasts it to reach US$30 billion by 2025.
South African specialised finance company, Lamna, citing online re-seller of pre-owned watches, Luxity, notes that the highest return for a watch brand is Rolex, returning 87,5% on average when comparing the resale price to retail.
But it also insists that only men’s watches by prestigious brands like Rolex, Audemars Piguet, and Patek Philippe are proven investment assets that tend to gain value over time.
“By contrast, ladies’ watches tend to be viewed as fashion accessories rather than investments. They depreciate significantly in value once purchased, notwithstanding make or model,” Lamna notes.
The growing demand for luxury watches in Africa is a natural trend for a continent that has, in recent years, been minting dollar millionaires.
According to the Africa Wealth Report 2022, published by Henley Global, private wealth held on the continent will rise by 38% over the next decade, with many families investing in offshore real estate to diversify their asset portfolios.
Africa’s ‘Big 5’ wealth markets are South Africa, Egypt, Nigeria, Morocco and Kenya, which account for over 50 per cent of Africa’s total individual wealth.
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SOURCE: Seth Onyango, bird story agency
