Israel may be a small country – with fewer people living in it than London – and yet its watch market is surprisingly profitable.
Swiss watch exports to Israel increased 4.1% to 52.6 million SFr ($ 57.1 million) between January and August this year compared to the same period in 2019, according to the Federation of the Swiss Watch Industry.
Meanwhile, luxury watch brands have started setting up shop there. Hublot announced its first franchise at the Impress watch and jewelry store in the port city of Haifa, 18 months after opening its first boutique in Tel Aviv. Audemars Piguet, one of the largest privately owned watchmakers in the world, opened an AP house in Tel Aviv last month. The boutique is located in the city’s financial district, where an apartment in the 32-story Rothschild Tower can cost NIS 50 million ($ 15.6 million).
“Israel is one of the most interesting countries in my region [whose] The market is much bigger than it looks, “says Augusto Kapitnucci, Hublot’s regional director. The brand’s sales have grown at a double-digit rate year-on-year in Israel since it took office in 2015. Data for 2021 have now returned to the same level as 2019 sales. Because there was a faster return in Israel after the first lock than in its other territories.
Reginald Brack, an analyst in the U.S. watch industry, compares the watch industry in Israel to that of St. Barthes, Monaco or Hong Kong. Israeli customers. “They buy back more often than you might expect.”
Israel has one of the highest per capita ratios of billionaires in the world and a growing technology sector that attracts buyers abroad, thus creating many “sudden” local millionaires, says diamond industry analyst Eden Golan.
However, the CEO of Penrai, Jean-Marc Pontrau, believes that his brand’s business with Israelis living or traveling abroad is much larger than the business done within the country. Its daily sales figures for each nation show that Israelis regularly shop in boutiques all over the world.
He adds that tax refunds make Panerai’s standard global prices more accessible since in Israel, imported watches are subject to a 17% tax.
Rolex, Omega or Patek Philippe watches, worn as status symbols, are among the most collectible in Israel, says vintage watch dealer in Herzliya, Nimrod Kozik. So is “everything is military,” he adds – in a country where conscripts are traditionally given a watch before their service in the Israel Defense Forces.
Local spending has risen to an average of six digits while “before it was like four digits,” says Jonsoff of JB Jewelers, which sees increased demand for more exclusive items.
The location determines, with Tel Aviv at the forefront as the center of luxury, fashion and business. “[In] Jerusalem, most of the customers are Jewish tourists [from America, Europe, Russia and elsewhere] Who visit once or twice a year then they are returning customers, “explains Yonsoff, whose boutiques are located in the prestigious fashion area of Tel Aviv, Kikar Hamedinah, and near the King David Hotel in Jerusalem.
Haifa and Eilat are also popular destination for buying watches, says Hippo watchmaker Itai Noy, who also lectures on watch movements at the Bezalel Academy of Art and Design in Jerusalem. “Haifa is the capital of the north, so all the people from the north would go to Haifa and not to Tel Aviv,” says Noy. The attraction of Eilat, the southernmost city in Israel, is its 17 percent VAT exemption, which makes it popular with tourists.
Analyst Brack says the interest in Israel is a natural development of big brands – such as Rolex, Patek Philippe and Odmer Peugeot – looking to enter watches that are not yet saturated, such as those in the US and Europe.
“Each of these brands is constantly looking to see [where is the] White space in retail, what are we missing, “he says.” Where are some other markets we can go sell? “