he data published by the Federation of the Swiss Watch Industry reflects the complex situation of the Japanese watch market. Until a few years ago, wealthy Chinese tourists were practically the only customers of watch retailers in two famous shopping areas, Ginza and Nihombashi.

However, since Xi Jinping launched his anti-corruption drive and began cracking down on imported goods, their interests switched from buying consumer goods to buying experiences. Instead of carrying around luxury branded carrier bags, they became interested in Michelin-starred sushi restaurants.

Some dealers and department stores continued to rely on them, and tried to expand their watch retail outfits, but their efforts soon proved futile.

But in 2017, tourists from overseas, especially from greater China, showed a strong desire to buy watches and luxury goods again. Interestingly, many of them were interested not just in famous brands, but also in the kinds of watches that the Japanese prefer. In fact, I was interviewed by a buyer’s guide for Chinese tourists about watches that sold well to Japanese. Moreover, when they did buy, they tended to stick to buying just one or two. To be fair, in the last few years, they have regained their keen eyes for choosing goods and items.

On the other hand, the consumption habits of Japanese have still not fully recovered from the Lehman collapse. The rising stock market and rocketing value of Bitcoin have triggered the recovery of super-luxury products, but sales of watches (especially those from small manufacturers) are weak for the 500,000–3,000,000 yen range (4,000 to 26,000 dollars). The economic situation of Japan is recovering, but still not sufficiently to stimulate the middle class. And because of excessive inventory being pushed by the major manufacturers and big groups, retail stores are now steadily losing purchasing capacity.

The watches that continue to sell well in Japan are the same. There’s Rolex, of course, plus sporty Hublot, TAG Heuer, with its youth appeal, and Richard Mille, now an icon for the wealthy. Hamilton still dominates the entry-level market. However, there has been a growing trend in recent years for luxury products from domestic manufacturers to sell well. Grand Seiko and Oceanus by Casio are good examples. Many Japanese are very priceconscious, as no doubt are overseas buyers.

As a result, we have come to realise that watches made in Japan are relatively inexpensive and of comparatively high quality. So, what will happen in 2018? The economic recovery will last until 2020, which will also stimulate the watch market. However, the situation in North Korea remains a primary concern. Many Japanese are still optimistic, but if the situation worsens, the economy of the entire East Asian region will be affected, not just Japan. It’s not the Japanese or the Chinese who are in charge, but “Dictator Kim”.