Even though most things are now available online, watch resale is still conducted in a startlingly antiquated manner: face to face, with little or no disclosure of prices. Wristcheck, a Hong Kong-based firm, is attempting to digitise the sector.
Austen Chu, co-founder and CEO of Wristcheck, has said in an interview that traditional secondhand watch selling is a “buy cheap sell high” industry that frequently puts the buyer and seller in a “predatory” position. His example was an auction company, which he said routinely charged buyers up to 26% and sellers up to 12% in transaction fees.
“The luxury watch market is not regulated like other markets. As the activity’s creator puts it, “part of the reason is the high barrier to admission since it’s an extremely knowledge-based hobby.”
Wristcheck, on the other hand, charges 8% to the vendor and 4% to the purchaser. Wristcheck is a consignment marketplace, so we don’t actually purchase watches from sellers up front. This helps us avoid having to have any inventory on hand. In order to acquire a desired timepiece, consumers may submit a bid on the marketplace.
The company had been operating on its own funds for the previous three years before finally completing its first outside investment. Gobi Partners, a well-known Chinese VC company, led the $5 million fundraising round. The business has been putting more of its attention on the Greater Bay Area, which includes Shenzhen and Hong Kong, in recent years. K3 Ventures, located in Singapore, also joined the funding round.
Insight into the wrist
Chu’s fascination in timepieces began when he was five years old and was given a Flik Flak as a gift. However, most young people cannot afford to acquire good timepieces, therefore this passion is more often associated with the elderly.
There seems to be a new crowd signing up for Wristcheck. According to Chu, 43% of the company’s clientele are young adults. While he cannot reveal the company’s income, he does claim that “several watches that transacted over a million USD” were sold on the site. Wristcheck has amassed a total of 80,000 members, or individuals it has connected with through its website or at in-person events.
Those who are passionate about watches but are unable to find what they want in stores will benefit greatly from Wristcheck, adds Chu. Moreover, he says that Apple is responsible in part for the increased interest in watches among young customers. Despite widespread perception that the introduction of the Apple Watch would mean the end of the high-end watch market, Chu contends that this is not the case, citing instead the increased “wrist awareness” among the generation born into the digital watch era.
The company’s creator is certain that Apple Watch is revolutionary for the timepiece business.
The importance of place cannot be overstated
Hong Kong, with its business-friendly climate, is an ideal location for the company’s headquarters. While the majority of Wristcheck’s clients have been Hong Kong residents during the COVID outbreak, the city is slowly seeing a resurgence of foreign visitors now that the border has reopened. The Wristcheck is also experiencing a rise in interest from international sellers and purchasers.
Today, almost 15% of Wristcheck’s committed inventory comes from international clients. Due to Hong Kong’s tax-free policy, many of its clients opt to have their orders sent there for pickup.
Another benefit to Wristwatch’s location in Hong Kong is that it is close to the mainland Chinese city of Shenzhen, a major technology centre. The company is now seeking a Chief Technology Officer to expand its artificial intelligence infrastructure.
The use of AI-powered technology
With this new injection of funding, Wristcheck plans to further enhance its proprietary image recognition algorithm to verify the authenticity of timepieces in user-uploaded photographs. According to Chu, counterfeit goods are widespread in the secondhand watch market.
You can tell whether a watch is authentic by looking at a snapshot of it up up and personal. Then, he continues, “all we have to do is train a database with both authentic and bogus timepieces. Additionally, the system compares reports of stolen timepieces from local law enforcement agencies throughout the globe.
Internet shopping isn’t the only place picture recognition has been used. Users of Alibaba’s Taobao marketplace have had the option to do image searches for items for quite some time. However, punctuality is of the utmost importance when it comes to the digital trade of luxury watches. Much of the research and purchasing of high-end watches shifted online during COVID. Meanwhile, Chu argues that the multimillion-dollar NFT purchases have conditioned customers, particularly millennials, to feel safe making huge financial transactions online.
In the long run, the young company hopes to become the industry standard in terms of pricing for timepieces. To that aim, it intends to invest a part of its new capital in developing a pricing data-gathering engine that can access both current and past prices, thereby increasing competition and transparency in the pre-owned watch market.
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