It is now widely acknowledged that the pandemic has greatly changed modern life and made working and learning from home the new normal across the world. This has seen the watch market come to be dominated by local consumers, with holiday shoppers having all but disappeared due to the travel restrictions. Fewer social activities have also resulted in changes to the demand for timepieces. According to the latest forecast by Gartner, a world leader in IT research, global end-user spending on wearable devices will reach US$81.5 billion by 2021, an increase of more than 18% compared to the US$69 billion recorded for 2020.
Maintaining that smart devices and digital gadgets will continue to thrive and lead the industry’s recovery in the post-Covid era and beyond, Yuen said: “During the pandemic, many of our friends in the industry, like us, devoted a lot of resources to developing unique functions for smartwatches, such as body movement and vital signs monitoring, global positioning systems, temperature measurement and weather forecasting. As the public is also much more health-conscious than before, digital fitness and sports activities have become increasingly popular. These changes in consumer behaviour have opened wide vistas for innovative watch and clock manufacturers.”
Comprehensive Product Range Conducive to Continuity
Hong Kong, of course, has long been one of the world’s leading watch and clock exporters. The diverse range of timepieces it offers include analogue, digital, metal, plastic, fashion, classic, practical, jewellery models, as well as sports watches and many other varieties. In 2020, in value terms, Hong Kong was the world’s second-largest exporter of complete watches (after Switzerland) and the third-largest exporter of complete clocks (trailing only mainland China and Germany). In quantity terms, however, Hong Kong is the undisputed world leader. Its largest single category in this regard is battery-powered wristwatches, which accounted for more than 40% of the sector’s total export value in 2020.
Backed by numerous ancillary sectors, the Hong Kong watch and clock industry exports a variety of timepiece parts and components, including assembled movements, cases, dials and straps, as well as parts for watch bands and cases. With the exception of movements and other core component (such as quartz crystals and integrated circuits that need to be imported). Hong Kong’s watch assembling companies can easily find supplies of high-quality parts and components. Given that the electronics industry is Hong Kong’s largest export earner, with a diversity of materials thus readily available, the sector is capable of satisfying the needs of a wide range of product developers, designers and customers when it comes to creating and refining smartwatches.
Over the years, Hong Kong’s watch and clock companies have shifted from a focus on original equipment manufacturing (OEM) and original design manufacturing (ODM) to original brand manufacturing (OBM) business. Though most OEM and ODM players have already relocated many of their labour-intensive processes to the mainland and other Southeast Asian countries with lower labour costs, a considerable number of OBM manufacturers continue to produce higher-value own-branded products from their Hong Kong bases.
As buyers are increasingly quality-conscious, more and more watch manufacturers are seeking to boost consumer confidence in their quality management via third-party certification. The Hong Kong Watch Manufacturers Association Limited (HKWMA), meanwhile, has set up the Watch & Clock Design Depository Centre as a means of enhancing intellectual property protection within the industry. As well as allowing watch and clock designers to house their creations on site, the Centre also provides independent certification services for duration-in-record of copyright, allowing designers to establish and maintain copyright in litigious situations.
Overall, the remit of the Centre is to provide a comprehensive range of support services to the industry, including independent quality testing and analysis services. At present, it offers more than 50 testing services relating to international and Swiss standards, many of which were previously unavailable locally. Funded by the Innovation and Technology Fund and managed jointly by the Hong Kong Productivity Council and the HKWMA, the Centre has already secured ISO 17025 certification.
To further raise the design standard and quality of Hong Kong watches and clocks, while encouraging innovative design and promoting locally-produced timepieces to the wider world, the HKTDC , in association with the HKWMA and the Federation of Hong Kong Watch Trades & Industry, co-organises the Hong Kong Watch & Clock Design Competition for young designers on an annual basis. Response to the recent 37th edition of the event was, as ever, enthusiastic, with some 140 entries received, which was taken as a sure sign that the local watchmaking industry is in good health.
Opportunities for Innovators Amid the Crisis
It is fair to say, though, that the pandemic has been one of the most disruptive events of recent history, forcing many sectors to transform in a bid to secure positive business outcomes. The new post-outbreak world, meanwhile, is increasingly characterised by disruptive innovation, with various aspects of everyday life and commercial activity being constantly redefined.
Irrespective of how the pandemic continues to unfold, Yuen believes that with the reopening of the global economy, coupled with the ubiquity of digitalisation and automation, smart production and smart products are set to become mainstream. Detailing his thinking, he said: “Many traditional industries, including watchmaking, should prepare for business and product digitalisation and get ready for smart transformation. Simultaneously, they should also look to make the best of big data analytics and those digital channels that are gaining in terms of both popularity and maturity. They should also be well-prepared to embrace evolving business patterns at any moment.”
For his part, Yuen sees a real opportunity to redefine traditional products and appeal to new consumers through the incorporation of innovative technology. Outlining his vision, he said: “By utilising new business formats, watch and clock products of superior craftsmanship and that incorporate smart technology could take many different forms. They could, for instance, have applications with regard to diabetes patients, many of whom suffer from foot ulcers on account of footwear-related pressure and subsequent high temperatures. In this instance, health watches, equipped with advanced wireless communication technology, would be able to detect and measure the sole pressure and skin temperature of shoe-wearing feet and warn of any risks.
“It is also possible to design theft-proof watches that deter employees from stealing things in their trust, as well as injury-prevention watches that promote occupational health and safety by monitoring manual labourers and those engaged in repetitive tasks. At the same time, sports watches can be designed to link to various vital-sign monitoring devices and to smart sports equipment, such as electric bicycles. We can also adopt green development concepts and come up with environmentally-friendly watches that can use hybrid energy and be made from renewable materials.”