from Ch24
Bit weird to omit a Y axis from all of those charts. C24 have a lot of skin in the game and are heavily invested in everyone thinking all is well so pinch/bucket of salt needed.
I wouldn’t trust the source. You can spin statistics all day to help your business.
The economic impact won't be fully felt until the government's support is withdrawn and the liquidation procedures get in full flow. The swelling unemployment figures will then follow.
This is currently the period where the snake bite has caused numbness but you know the real pain is coming. I'm afraid all markets (bar food and produce) will be crashing like stock cars in the fullness of time. I can't emphasize how grim I expect this to be. I pray I'm wrong and I'm not religious in any way.
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The stats were sent to businesses, and have reflected a notable increase in sales through the platform.Originally Posted by Christian
Suspect that Stefmcd will be correct in time though.
I’m inclined to agree. With few redundancies yet because of the various government pay schemes, I suspect the true economic horror will only be realised in a few months time. At the moment, I can imagine people bored, sat at home with money to spend on watches. I think Chrono24 using these charts to promote a “recovery” is a wrong.
What they need to show is
Average order value per week
Total value of sales per week
Number of sales per week
Also if possible a way of showing the number of duplicate watches being withdrawn. My bet is large grey dealers will be advertising one or two Hulks/Pepsi's etc while having a lot more behind the scenes. Trying to clear stock without flooding the market.
I don't see why it should cause an across the board crash. There just doesn't seem to be any reason for it to do so overall. Lots of business types have carried on fine and will continue to do so. Online businesses in particular (or those who could swivel to online sales) have hugely benefited, in fact.
However, air travel and hospitality (both 'local' (e.g. pubs, restaurants) and 'international' (e.g. convention and conference centres, etc.)) may well be severely attrited by this time next year. High street stores will similarly be very heavily damaged and will probably never be able to recover at all -- demand will have largely moved elsewhere permanently.
Last edited by markrlondon; 14th May 2020 at 17:29.
All C24 is really getting is a percentage of those that used to frequent shops and now cant so to feed their habit they shop online.
RIAC
Good point combined with a nice "buy with confidence, everyone else is" sales pitch.
From a personal perspective I usually dismiss graphics where either of the axis aren't labelled in a meaningful way. I can perhaps understand why Chrono24 wouldn't want to give away numbers of global sales etc. I haven't added to Chrono24's numbers though I do have a new purchase due to be delivered tomorrow - a watch I've been looking for for almost 2 years and this is the first I've seen for sale - only 60 were made.
Last edited by Skier; 15th May 2020 at 15:34.
I hope you're right. I know very few people who have been working. Many will have 20% less money to spend. This will be felt throughout the economy.
Many will lose their jobs and they'll have 80% ish less money to spend when on benefits. The reduced demand in the economy will lead many further businesses to collapse within the next year. So many companies have been surviving on tiny margins. Few of these have any chance of surviving.
Many people will not be able or will refuse to return to work in the medium term. This will cause significant production and service provision problems. This means businesses and services may only be able to operate at 50-60% capacity or worse.
If schools don't properly re-open, childcare will be an issue for those who can and want to return to work.
The cost to the welfare system of those made unemployed will surely lead to tax and NI increases. This will further reduce demand.
Tourism is one of the world's biggest industries. There will be no holidays in the short term and who will have the confidence to book anything for the foreseeable future.
Sorry to be so dismal but this is the biggest catastrophe to ever hit post industrial revolution economies. We're in a calm before the storm. The lag is still in effect as the lack of money and effective demand won't hit till summer. It's a very grim outlook.
Anyone who thinks the effective shutdown of the world's major economies for 2 months plus isn't going to have monumental damage is the ultimate optimist. I wish I shared such feelings.
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Wouldn't be a Zenith would it?
The UK is a tiny fraction of the world economy - my colleagues in Japan don’t get what the doom and gloom is here, as it’s impact there is so small. Asia is by far the main economic growth driver now - the world will recover pretty quickly, whatever impact we create here.
It's been most of Europe, the biggest economic block in the world; and a huge part of North America, the second biggest economic block in the world, each accounting for a huge level of the demand for the Asian products. When the effect of that reduced demand hits Asia in the coming months, I doubt the impact will be small.
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Pretty sure what this tells us is that a lot of people are:
a) at home staring in to laptops, and
b) starting drinking earlier in the day
Afaics, it is only a subset who cannot realistically return to work soon. There will be adaptation costs but change is forever.
This is the most worrying thing, to my mind.
It is worth noting that if Net Zero is to be realistically accomplished then tourism will have to be largely eliminated anyway. The reduction in travel (both nationally and internationally) that we have seen has been an informative preview of the necessary practical reality of Net Zero.
No, it is not. World War 2 was far more significant and damaging to some countries, including the UK. The Great Depression might have been worse in its time, too.
This has been economically damaging but it has affected (and will continue to effect) different economic sectors differently.
Some sectors will be damaged, others will be wiped out temporarily, others wiped out permanently, others will have a neutral outlook, and others have done well out of it or are set to do well.
My predictions:-
Major losing sectors:
(1) International air travel (and allied support industries). During the post-covid fall out, there will probably be massive insolvencies. The question of extra runways at Heathrow, Gatwick or elsewhere in the UK will become moot. Air travel will probably never fully recover. Some countries will provide bailouts but this will not happen in the UK. Not even for the foreign-owned BA (probably). (Note that a Net Zero scenario, which is still official government policy, would have resulted in a similar outcome eventually. The government's own sponsored projection show this and simply seem to accept it as inevitable and necessary).
(2) International hospitality industry (e.g. convention centres and the like). Who wants to travel and visit crowded conferences halls now? There is circumstantial evidence to indicate that CES in Nevada in January contributed to the spread of covid. I don't think that international industry conferences/conventions or international business travel in general will ever significantly recover; online conferencing tools can do almost all that is needed (see below for winners).
(3) Car manufacturing. This is actually a combination of factors, not just covid. E.g. State policies have been seriously harming car production to the detriment of economies where car production was a major contributor, such as the British one.
(4) Much of the UK high street. It's just not necessary. Online can serve. But this is not absolute: High footfall/high population density areas will, as at present, continue to do better than lower population density areas. Convenience in high population density areas will always be worth something. Nevertheless, the polarisation will be increased and perhaps be even more obvious.
Temporarily losing sectors:
(1) Local hospitality (e.g. pubs, restaurants, UK tourist destinations). These could well crash on a massive scale but it will be largely temporary (although pubs might well permanently become a niche industry). Individual businesses may never recover but demand, at least nationally, will return and new businesses will set up to serve demand and there will be some survivors. Easy death, easy recovery, so to speak. My impression is that the UK government have already internally and privately accepted that what I call the local hospitality industry is a write off: They expect it to fail en masse. It doesn't matter -- as I observe here it is replaceable. There will be no bailouts beyond the schemes currently offered.
(2) In person entertainment such as theatres, cinemas, opera, etc. It depends. Cinemas might be finished off by this. Who needs them when you can watch movies in the comfort of your own home (with friends sooner or later), with cheaper food, no rustling of paper, slurping of drinks, talking, etc. Theatres: I think they'll recover. Seeing performances in person is not fully replaceable, not even by video link. Opera? Who needs that. It (mostly) wouldn't exist without state subsidy anyway. Time to cut out subsidy and let it live or die on its own merits.
(3) Museums, etc. These will recover ok, albeit with adaptations.
Broadly neutral:
Everything else that did not need to shut down due to government command[1] (apart from the winners, see below). E.g. Most manufacturing, most non-retail. Some businesses that were not forced by dictat to shut down decided to shut down voluntarily. That was a mistake. They should have adapted instead. They've still got to do it now if they wish to continue. Some manufacturers shut down due to broken JIT supply lines but they need to wake up and realise, as I have always said, that JIT is only sustainable while everything is perfect. It is too brittle in a non-perfect world. This has now been demonstrated.
Winners:
Everything that could be done online or be swivelled to online. Selling, communications, entertainment, anything. Big winners were online conferencing, video conferencing, etc. These look set to win even bigger since it seems unlikely, as I observe above, for international business travel to ever need to fully recover.
I don't regard two months as all that significant to be brutally honest. If this helps to eliminate businesses being run on too narrow margins and bring the over-brittleness of JIT supply chains into focus then all the better. What is two months out of a year, or ten years (although some industry sectors will be affected more than others due to timing).
Yes, the complete lockdown will be more than two months (and extensions may well affected sectors such like hospitality disproportionately severely) but, even so, this episode proves the need to factor in interruptions to business.
Yes, there will be change, some people will get poorer, some will get richer, but it's survivable for economies as a whole. Will it be "grim"? It will depend (already depends, in fact) on your business sector, I'd say.
Footnote:-
1: As an aside I do not dispute that it might well have been necessary in order to avoid too many serious covid cases occurring at the same time (although I suspect that covid had already spread very widely worldwide by the time any country outside of China implemented any kind of response) but the economic damage was nevertheless caused by state command.
Last edited by markrlondon; 1st June 2020 at 14:03.
This crisis has hit certain sectors extremely hard which I don’t think fit the typical demographic for luxury watch buyers. Luxury watch demographic being somewhat similar to TZUk I imagine.
White-collar staff able to work and home and keep income, also higher echelons of public sector who will not get the P45 what ever, buying on dips? Plenty of IT staff never been busier, who are generally buying at the lower horological end of Speedy, Sub etc.
The majority of my circle is still working, so we seem unaffected by the lockdown at present. My entire company has moved to working from home, other than those customer-facing who are offering a reduced service. Plenty of employed people with disposable income, zero transport outlay too.
Once redundancy looms, that’s when the market will contract.
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I’m not sure. I’m a pilot in the top 5% of earners and I’m 99% sure I’m about to be made redundant for the first time in my working life. From top 5% to dole queue with a £100,000 qualification that has no value in the current economic crisis, so the only jobs that I can see available are things like Uber driver. I reckon there are quite a few in the luxury watch demographic that could be hit in the next few months.
Out of interest how.easy would it be for you to pivot towards being a cargo pilot, at least temporarily? I hope it all goes well btw - I feel for you here as that's a lot of training required. I personally plan to fly long haul as soon as safe to do so and I'm sure I'm not alone. Being cooped up unable to travel has made me resolute in wishing to travel as extensively as possible as soon as is practicable.
Sorry, I think you may be in the minority.
Story of my life lol :)
Thanks Ryan...cargo flying pretty much no chance. Far too many pilots will be released onto the market compared with jobs available...although some pilots could be lucky if they had the right type rating.
Personally, I would have no worries about long haul travel particularly when this wave of the virus dies down further. The only issue for me would be how travel insurance will choose to cover people.
I think there’s a double blow to aviation in the next couple of years...the immediate impact of the virus and the travel restrictions followed by the economic impact which will reduce peoples ability to afford to travel.
Almost all of the “growth” in economic growth is in Asia. We’ll get past this WAY quicker than the media are forecasting. Remember JKG - in economics the majority are always wrong :-) Or Buffet - be greedy when others are fearful.
We ALWAYS think “this time it’s different” - that’s why markets go down, because people are startled enough to be scared, like now.
Sorry to hear that, I’m planning to fly long haul like Ryan also as soon as I can. In fact I’ve rebooked my BA ticket for end of October, if it doesn’t go ahead I imagine I will get another flight voucher and so on.
Watches of Switzerland have said that online sales went up by 45.8% during the lockdown period ->
https://www.standard.co.uk/business/...-a4440466.html
It looks like some people are still buying. I'm guessing that nearly all of those watches sold would have been at list price.
The USA economy is significantly bigger than the EU's.
Mitch
Suspect that's because there is no other option and online sales are a fraction of their overall sales. Overall sales I'm sure will be down as a luxury watch will IMHO still largely remain a bricks and mortar purchase for most people as it is a once every 10 years acquisition. The watch nuts on here aren't representative of the 'normal' folk out there :)
I hope you're right. Best case scenario is that we have to bale out huge sectors of the economy and pay for it for the next decade or so. Spreading the pain over time is the only way I think the economy can be sustained with minimised disruption.
Mark's in-depth and informed analysis above contained a rather overly positive view of the market's ability to respond and recover IMO. Amen to his and your views being justified!
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Everyone i know cant wait to fly long haul.
Humans are very resiliant and lets assume we're on top of this by Sept ish the first thing i and many others will do is bugger off travelling.
Not interested in someone popping along saying its optimistic saying Sept as it'll be the same answer whenever we have a handle on it.
Pretty sure you're wrong there. Remember the EU is significantly larger population and contains most of the top 20 countries by GDP. I'll have a Google.
Edit: This source (the balance) suggests China top, EU second, US third.
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Last edited by stefmcd; 14th May 2020 at 21:21.
So would you book anything in advance given current circumstances and the fact that so many have already struggled to get money back on holidays? I think confidence and consumers lack thereof will be the big problem. I'd love a holiday but I'm struggling to see myself having the confidence to book anything for a long time. If many share that view, the whole travel sector will struggle to the point of collapse.
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I would book in advance and have one booked for August in which ive a sizeable lump to pay the balance early June.
I'm in the fortunate position where as i can wait for any refund but will probably choose not to incase the agent goes belly up if it comes to that.The initial deposit is safe however not the same with all agents i agree.
I just think if we all feel like yourself we are perpetuating the pessimistic feel which is the last thing we need.Consumers will always consume especially since the government seem intent on paying the wages for the forseeable.I'm under no illusion as to the seriousness of where we are but we will come out of it sooner rather than later and some sectors will be much the stronger for it.
We had to cancel all our booked holidays this year. So far the only refund came from a one night hotel stay before travelling on Eurostar. I’ll certainly think twice before putting money down again having lost almost 10k this time. Also the attitude of some of them will mean I wouldn’t use them again anyway.
This is not a world travel thread, it is a watch market thread.
Personally, although I am sure it is right for Chrono24 to fluff their ability to sell (to the trade) I am sure they are one of the recipients of increased traffic because (as mentioned before) of the double whammy.
Watch folk cannot go and find the watch they want in the metal, the shops are all closed.
They also have more time and availability to look online, and looking has the unfortunate consequence finding.
So I totally see that Chrono24 may be up a tad, but many other platforms will be down considerably.
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