Does anyone still make more money than $10 billion a year than Rolex?

A research by Luxe Consult and Morgan Stanley projects that in 2023, Rolex sales would rise 11% year over year to a new high of 10.1 billion Swiss francs (about 11.4 billion U.S. dollars). As a result, and in response to considerable market interest, Rolex becomes the first watch brand to break into the 10 billion Swiss franc club in terms of yearly sales.

The Richemont Group owns Cartier, and the Swatch Group owns Omega. With CHF 3.1 billion and CHF 2.6 billion, respectively, they are rated second and third on the list. Independent watchmakers Richard Mille, Patek Philippe, and Audemars Piguet come after them.

This implies that Rolex will have higher sales than the combined sales of the second to sixth ranked brands, resulting in a remarkable 30.3% retail market share.

Rolex's dominance in the watch industry is unparalleled in the luxury goods sector.Rolex's performance is in line with the rising export record of Swiss watch exports, but its growth rate is significantly higher than the industry average.

Four prominent brands, according to Oliver Müller, drove the surge in export data for the entire year: Richard Mille, Audemars Piguet, Patek Philippe, and Rolex. Based on Morgan Stanley's estimations, the growing share of the watch market in 2023 will be virtually entirely accounted for by these four big brands.

The brand's financial reports and the second-hand market have not reflected the same level of success as the boom.

The cost of used luxury timepieces has been falling since the later part of 2022. Despite a small rebound at the start of the previous year, the pattern did not change. The second-hand luxury watch market's cooling is even more notable when contrasted to its high in March 2022.

The drop in second-hand luxury watch prices is due to a combination of factors, including the cryptocurrency market downturn and rising inflation. This change reflects market supply and demand.

However, Rolex may face greater challenges from changes in the watch industry structure than from short-term economic fluctuations.

The watch industry differs from other luxury goods industries in that independent brands dominate and listed groups have limited market share.

Rolex may be indirectly affected by the business logic and operational strategy of luxury giants before their watch layout has a substantial impact on Rolex's sales.

In the watch market, the most important trend is not the acceleration of marketing strategies, but the innovation of retail methods. Specifically, the reorganization of retail networks.

Unlike soft luxury brands, most luxury watch brands have traditionally sold their products through third-party watch dealers worldwide

While this method can help brands save costs and increase their ability to resist risks during periods of market fluctuations, it also weakens the brand's control over important aspects such as brand image, product selling price, and after-sales service to a certain extent. Additionally, it can make it difficult to communicate directly with end customers to understand sales status.

The retail network, particularly multi-brand dealer stores, is not conducive to luxury watch brands providing consistent purchasing services and experiences that match their high prices. This is precisely what luxury goods giants operating soft luxury brands excel at.

With the industry trend moving towards direct sales, Rolex announced last year that it would fully acquire Bucherer, the world's largest watch retailer, in response. This acquisition is the largest in Rolex's history. Bucherer currently contributes approximately 7.5% of the brand's sales, and this acquisition will directly increase the brand's revenue.

However, Bucherer's primary role is to facilitate Rolex's future development of direct sales channels.

Additionally, the acquisition of Bucherer will aid Rolex in monitoring the brand and controlling the market, particularly in regards to the issue of counterfeit goods in the second-hand market.

As competition increases, Rolex, which previously maintained a strict separation between production and sales, has to adapt.