More foreign branded watches and clocks will enter China next year as the country further opens its timepieces market to outside competition.

China has been committed to gradually lowering its import tariffs on clocks, watches and related components to a predicted average of 11 percent in 2005 from 23 percent when it joined the World Trade Organization (WTO) in 2001.

Currently, the tariff rate is 15 percent on average.

China will also abolish the import license system for clocks and watches from next year.

"These will give international brands much easier access to the Chinese market," Zhao Lingsu, deputy secretary-general of Horology Association of China, told China Daily.

"The country opens its retail sector from December 11 this year and more clocks and watches makers will be interested in the potentially huge market," she added.

Eu-watch, a retailer specializing in European branded watches and clocks, announced earlier this month it will open its first flagship Chinese store in Guangzhou on December 15.

Liu Yucheng, chairman of Guangdong Eu-watch Investment and Management Co, told the press that the store will introduce 35 European brands of high and medium-end clocks and watches into China through a direct retailing model.

"These brands are mainly from Germany, France, Swiss, Italy and Austria," he said.

Though many world top watch brands like Omega and Rolex have been in China for a long time, the market is still huge, added Liu.

"As a huge and fast-growing market, China can accept another 100 watch and clock brands," Liu predicted. The country could consume 15 million mid- and high-end watches every year, he estimated.

Around 80 percent of Eu-watch products are priced around 5,000 yuan (US$604) or below, which Liu believes is the price most likely accepted by Chinese consumers.

After the opening of its Guangzhou store, Eu-watch plans to open more stores in Beijing, Shanghai and other big cities.

Eu-watch is not alone. Many world leading watch makers also have plans to expand businesses here.

Omega, which have had eight stores in China, plans to open another three or four soon.

Casio intends to increase the number of its sales agents from the current 350 to 500.

Meanwhile, China will attract many new comers next year with lower market access threshold, industry experts predicted.

The number of foreign watch brands in China has increased by one-third compared with three years ago.

"The increasing number of foreign brands coming into the Chinese market will offer a wider choice for consumers," said Zhao Lingsu from the Chinese horology association.

"But it will definitely bring huge pressures on the domestic horologe industry," she said.

Due to some bottlenecks in technologies and production scales, made-in-China watches have found it hard to compete with famous international brands, even though the country has become one of the largest clock and watch makers around the world.

In 2003, China produced some 80 percent of world's clocks and watches, but the value of Chinese-made products was less than 10 percent of the total.

In the domestic market, 7.488 million clocks and watches were sold at 5.8 billion yuan (US$700 million) last year. The imported ones accounted for some 80 percent of the total sales value.

Import value of foreign clocks and watches continues to grow.

Customs statistics show from January to June, China imported US$376 million worth of watches and watch components, a year-on-year increase of 13.35 percent.

During the same period, the country bought US$92 million worth of imported clocks and clock components, 16.52 percent up over the January-June period last year.

According to a survey made by Horizon Research earlier this year, there are altogether over 270 watch in China.

"The biggest problem for domestic horologe makers is the lack of famous brand names," said an analyst from Horizon Research.

Among the top 20 brands in terms of market share, only five are domestic, though China has become one of the largest watch and clock producers in the world.

"The success of Swiss watches is due to their acknowledgement of the market, but Chinese enterprises are unclear about their targeted customers," said the analyst from Horizon.

An earlier media report quoted Xu Dongsheng, the general manager of Shenzhen Fiyta Co, a top domestic watch maker.

"Chinese watch makers should have our own development way, instead of just copying the Swiss model, though which has affected us deeply," said Xu Dongsheng, the general manager of Fiyta.

"China's clock and watch enterprises need to make utmost efforts to further improve product quality, technology content and brand popularity, to boost their competitiveness as a whole," said Zhao Lingsu from the horology association.

She believes made-in-China watches and clocks are as good as foreign products except at the high-end, "but the problem lies in branding and marketing," she said.

(China Daily December 14, 2004)