Looking to buy a nice watch? Get in line.

The Federation of the Swiss Watch Industry, a closely monitored barometer for the watch business, said it had a record year in 2021, with the most expensive watches leading the way. In December, exports by value for watches costing more than 3,000 Swiss francs ($3,200) grew 14.8 percent versus the same period in 2019, outpacing all other price categories.

Richemont, which counts Piaget, Cartier and Jaeger-LeCoultre in its portfolio, reported 20 percent growth for its watch division in its most recent quarter compared to 2019. Demand for Rolex right now is three to four times higher than in 2019, Flavio Cereda, an analyst at Jefferies wrote in a research note this month.

“There are NO Rolex watches available for sale — display models have movements impaired,” Cereda wrote. “No timepieces from NY to Miami, none, nada, niente.”

The trend is evident in the secondhand market too. WatchBox, a Philadelphia-based watch resale site, saw revenue spike 45 percent in 2021, with “the strongest growth concentrated at the high-end,” said WatchBox chief executive Justin Reis.

“We have witnessed a substantial increase in activity across the $20,000 to $100,000 spectrum,” said Reis. “The market for luxury collectibles has been transformed… to a much broader audience. The market is getting bigger and bigger.”

The demand for high-end watches is in line with the consumer’s overall appetite for luxury goods. In the recent quarter, sales in the fashion and leather goods division at LVMH were up 51 percent from their pre-pandemic level. And like many fashion brands, including Chanel, watch companies like Rolex and Patek Philippe are increasing their prices, anticipating customers will be willing to pay more for such in-demand products.

The boom does not extend to watches lower down the price spectrum, however. Demand for low and mid-priced watches has slowed. In December, Swiss watch exports for models costing less than 200 francs (about $215) were 26 percent lower than during the same month in 2019. Exports in the category of 200 francs to 500 francs also declined about 26 percent.

Karine Szegedi, a managing partner of consumer, fashion and luxury research at Deloitte, attributed the loss in the mid-market watch category to smart watches.

“The Swiss market used to see smart watches as a threat at any level, but now they are realising this is a major threat [just] to the entry level, as they are easily being replaced by smart watches, step counters and other devices,” she said.

What’s Fuelling the Growth

Fuelling the recent explosion in the luxury watch category is a pandemic-driven spending shift. With wealthy travellers halting their plans for exotic vacations, more turned to big purchases like expensive watches.

“People that spend $10,000, $20,000 a year on trips… have money sitting there,” said Ben Clymer, founder and executive chairman of the watch content and e-commerce site Hodinkee. “Watches are small, portable, fun and you can show them off. It’s like a vintage Porsche that you can actually wear, and you don’t have to pay [car] insurance.”

The current demand for luxury watches also speaks to how shoppers are increasingly seeing watches as an asset. Expensive pieces have always attracted wealthy shoppers, but a large portion of high-end watches are now being purchased as investments, said Clymer.

Part of the reason watches have become so valuable is because of scarcity. Major watch brands like Rolex and Richard Mille have limited distribution of their goods, and shortages cause prices to spike. The average price of a Patek Philippe Perpetual Calendar Chronograph in 2017 was $125,000, according to WatchBox; the average price of that same watch hit $190,000 at the end of 2021. And for a Rolex Daytona, the average price jumped from $18,100 in 2017 to $36,500 at the end of 2021.

Changes in the Customer

The demographics of the luxury watch category are changing, too. Younger shoppers are increasingly entering the market, and the average luxury watch shopper is now 30, said Szegedi.

Watchmakers have finally embraced e-commerce as well, paving the way for even the most expensive watches to be bought online (if you can find them). And because young shoppers can now buy luxury watches online instead of going to stores, they’ve become more popular in the collectibles community, where Clymer said watches feed into the current cultural zeitgeist.

Much of luxury watch sales are now coming from China. Wealthy tourists used to travel to Europe to buy watches, to ensure authenticity, but now, “we have seen the Chinese numbers going up hugely because they are buying domestic,” said Szegedi.

The US is also a growing market for luxury watches, as shoppers who used to flock to Omega and Breitling are increasingly trading up. At WatchBox, 70 percent of its shoppers are based in the US, said Reis.