Luxury Watch Market Problems

The demand for Swiss-made watches has demonstrated the highest growth rate in Asia and Europe, which makes sense in the post-crisis times when the European demand has been improving after it collapsed. Technavio’s analysts forecast the global luxury watch market to grow at a Compound Annual Growth Rate (CAGR) of 3.47% during the period 2020–2023.

According to the Federation of the Swiss Watch Industry FH, Switzerland produces around 30 million timepieces per year, which accounts for 2.5% of the global watch output (in terms of units). However, in value terms, this country accounts for over 50% of the world watch market.

The popularity of luxury watches has led to great interest both from investors, who appreciate unique characteristics and brand identification, and from fraudsters, whose aim is to make money on fake products.

Currently, main watch market problems can be described in three points: a strong black market, fake products availability, and absence of a single watch database. Let’s take a glance at each aspect of these points.

A Strong Black Market

Premium watches are so appealing, that their popularity has resulted in expansion of the black market for stolen watches. Stolen directly off a wrist or taken in a smash-and-grab attack, timepieces, which are easily transportable and often untraceable, could be turned into cash within a couple of days or even hours.

The biggest issue for future owners is the impossibility to know whether the offered watch is stolen (but it is likely that if the price is too good to be true). By purchasing a watch on the black market, you can avoid taxes and regulations, thus — safety.

Fake Products Availability

Another issue is the availability of fake products. Being in high demand, Swiss-made watches are faked more often as compared to watches of other countries’ brands.

In value terms, the trade turnover of counterfeit watches is over 1 billion francs per year, which accounts for 5% of the total sales volume of original timepieces.

The quality of counterfeit watches gradually improves, making them hard to distinguish. The plain truth is that dishonest manufacturers have no interest in industry standards for safety practice. They would rather use lower quality materials, even if they are toxic, allergenic or otherwise harmful to someone’s health.

Criminals even mastered watch copying and ‘cloning’. When one checks the authenticity of such watches using serial numbers alone, the lookup results are positive since these numbers may really exist.

No Secure Database of Watches

Each element of the watch mechanism is custom built. All timepieces have unique identification numbers, which authenticate product genuineness. These numbers are stored in the manufacturer’s internal databases. Regretfully, there is no single database for watches of different manufacturers, while the watch ownership history is not recorded. For that reason stolen and fake watches have flooded the market.

Another issue is the absence of the unified database monitoring watch service history. For instance, a customer wants to know whether the watch has been repaired and, if repaired, what parts have been used or where the maintenance, if any, has been executed. Without such a database there is no possibility to verify service information, which is of great importance for assessing the watch price.

ChronoBase Solution

A deep understanding of the blockchain technology allowed ChronoBase experts to create a product which overcomes safety and storage problems on the luxury watch market.

ChronoBase platform generates an Ethereum-based digital certificate to register the watch, confirm its origin as well as check ownership and service history instantly. Blockchain makes any manipulations with the data impossible — information recorded into the system remains safely guarded. Moreover, the platform can check whether the watch was stolen and find out it is already owned to avoid fraud. All the user needs is to enter the brand name, model/reference, and serial number.

For watch owners and buyers:

• ChronoBase protects you as the owner of a watch: it records your ownership and confirms the authenticity of your watch. If you are buying — ChronoBase helps to avoid stolen or fake items, or find a better deal!
• You can check any watch online by its reference and serial numbers. If the watch is found in ChronoBase — it was registered by the owner and checked by an authorized service center. If there is no record, that is a good reason to visit a service center to verify authenticity.
• Records in a secure ChronoBase database will prove that your watch is lawfully owned. If you are offered a stolen watch, the application will warn you and you may contact the owner.
• The ownership is recorded in the blockchain. This means that with ChronoBase you do not need to carry paper documents. You will always have access to the latest status of your collection.

For watch sellers and manufacturers:

• ChronoBase protects sellers from unfair competition and makes the whole luxury watch market more transparent.
• The whole provenance is retained in the blockchain. The buyer can easily verify whether a watch is new or second-hand, based on the recorded date of the first sale.
• If a person owns a private key in ChronoBase, a pawnshop can be confident that a watch belongs to that person.
• Possibility to track sales of dealers to third-party marketers, knowing the actual sales location/country for each item.
• Instant verification for insurance purposes, resale, or pledge, including service history and the date of the first sale, respecting the privacy of the owner.

ChronoBase already has more than 100,000 luxury timepieces in its database and it’s only the beginning.

ChronoBase will start its TIK token presale in the second half of June 2021. The team invites you to take part in the creation of this unique product. Once the token sale is completed, the TIK token will be listed on major cryptocurrency exchanges to ensure its liquidity.

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