LUXURY DOWN UNDER
AUSTRALIANS USED TO HAVE TO GO OVERSEAS TO BUY THE BEST WATCHES AND JEWELLERY, BUT NOW ALL THE MAJOR BRANDS ARE SETTING UP SHOP HERE, RIDING A RAPID BOOM.
If you turned back the clock five years, the luxury watch and jewellery landscape in Australia would be almost unrecognisable. There were only a handful of retailers, in Sydney and Melbourne, and the offerings were limited. In fact, many Australians were travelling overseas to Paris or Rome to get one-off high-jewellery pieces from Bulgari or Louis Vuitton or Van Cleef & Arpels. Today it could not be more different. All the major players in the world are not only in Sydney or Melbourne but in Brisbane and Perth and have even migrated to the suburbs. So why has Australia gone through this luxury jewellery boom, who is buying the pieces and will it last?
“Luxury products have more visibility and local customers have expressed more interest in our pieces,” says Laurent Dordet, the CEO of Hermès’ watchmaking arm, la Montre Hermès, adding that the result has been a booming market. “We have noticed many new brands entering Australia. There is definitely more awareness of luxury watch and jewellery houses and most brands have also opened up their exclusive boutiques rather than [using other] retailers.”
It is an observation shared by all other luxury houses in this space interviewed by WISH: Australia has gone from a young market to one that is now occupied by all the big players. “Australia is booming at all levels, on the artistic, design and creative scenes in particular,” says Van Cleef & Arpels’ southeast Asia managing director, Elise Gonnet-Pon, on why the French jeweller decided to make an entrance into the Australian market over a year ago. “This world-class offering, which combined with the natural wonders and scenery of the country, make it unique as a destination.”
Both Gonnet-Pon and Dordet have recognised the key drivers in this boom: local demand, greater visibility of international brands thanks to social media, changing consumer habits and of course, the increase in tourism from Asia and more specifically, China. According to the latest data from Tourism Australia, 1.2 million Chinese tourists spent over $9.8 billion in Australia in the year to June. That is about a quarter of all total tourist dollars ($40.6bn) spent in this country – an outsize proportion given China accounts for only 14 per cent of our 8.5 million international visitors.
“Tourists drive the luxury market substantially,” says Kim Do, a senior industry analyst at market research group IBISWorld. “A lot of international students who live here also have the buying power to purchase these luxury items as well. A lot of stores have realised this, which is why they have expanded substantially in Sydney and Melbourne over the last few years. International students also buy investment pieces, especially rare ones, which will see their retail value go up.”
Do says there have been key changes in the domestic market as well, with more consumers willing to invest in high-end watches and jewellery. In other words, the high end of retail is not only occupied by those who spend only in these stores. Someone who buys clothes at Zara might occasionally buy a bracelet at Bulgari, a bespoke engagement ring at Tiffany & Co. or a necklace from Louis Vuitton. “Consumers are not shopping in the middle of the market as much as much any more,” she tells WISH. “They are buying the majority of their clothing and accessories in the fast-fashion segment but are complimenting these pieces with luxury high-end pieces as well.”
This change has partly been fuelled by increasing awareness, thanks to online shopping and social media platforms such as Instagram, through which new products are seen by millions around the world, regardless of the location of the retailer or the customer. “The Australian audience is highly connected in a forever-changing and engaging digital environment,” says Gonnet-Pon. “[This] fuels awareness and aspiration but also enables people to assess and appreciate the authenticity of the statements from brands.” This has not gone unnoticed by Australian watch retailer Kennedy, which has expanded its stores from two multi-brand boutiques in just Melbourne and Sydney to 11 boutiques including standalone Rolex stores. “The last five years has seen tremendous growth in the hard luxury sector, with the sector experiencing doubledigit growth year-on-year,” managing director Martin Rainer says. “There is increased awareness and desire of luxury brands by Australians that are driven by increased retail presence but also by the growing digital footprint of luxury watch brands.”
Italian high-end jeweller Bulgari, which opened its first boutique here in 1998 and is about to open its sixth, also says its increased demand is led by domestic consumers. “Previously Australian customers looking for high-end or one-of-a-kind pieces were inclined to make these purchases while travelling, as often brands weren’t bringing these special pieces to the [Australian] market,” says Bulgari Australia managing director Brad Harvey. “As the sophistication of the market has developed, or rather been recognised by the brands, more unique pieces are arriving into the country and the desire to make these purchases domestically is evident.”
Do also believes the boom has been fuelled by luxury fashion houses such as Louis Vuitton, Dior and Chanel expanding from clothing into the watch and jewellery field. “There is a rising number of luxury stores aiming to become a one-stop shop for people,” she explains. “It is to grab the consumer so a person can go into their store and find everything from jewellery to clothing to handbags.”
Hamdi Chatti, the vice-president of jewellery and watches for Louis Vuitton, says his company has upped the ante in this area. “Our [retail] offer has developed well during the recent years with strong acceleration on the very high-end products,” he tells WISH. “Our demand is coming from customers around the world.” The French house – which started in 1854 as a malletier or luggage maker – also recently opened its first store to
“They are buying clothing in the fast-fashion segment but are complimenting this with luxury high-end pieces.”
Opposite page: an artist’s impression of Bulgari’s soon-to-be-renovated Sydney store (main) and the Kennedy Rolex store in Perth; this page: Van Cleef & Arpels in Sydney (main) and Kennedy IWC in Perth
Hermès Chaine d’Ancre punk necklace in white gold and diamonds; below left, Tiffany T square bracelets in pink and yellow gold with pavé diamonds; right, Rolex Lady Datejust 28