Wristcheck wants to make second-hand luxury watches more affordable • TechCrunch
At a time when almost anything can be purchased online, the resale of watches is done in a surprisingly archaic way, namely face-to-face with little price transparency. Wristcheck, a Hong Kong-based startup, is trying to digitize the industry.
The traditional pre-owned watch trade is a “buy low sell high” business that often puts the buyer and seller in a “predatory” position, says Austen Chu, co-founder and CEO of Wristcheck, in an interview. An auction house, for example, typically charges the buyer up to 26% and the sellers up to 12% in transaction fees, he says.
“There is no standardized way to buy and sell in the luxury watch space. Part of the reason is the high barrier to entry because it’s a super knowledge-based hobby. observes the founder.
In comparison, Wristcheck takes 8% from the seller and 4% from the buyer. Rather than buying watches from sellers in advance, Wristcheck acts as a consignment platform and removes inventory costs. The platform allows users to put in a bid price for any watch they want – buyers know what net sellers, and sellers know what buyers pay.
The startup had been in the early stages for about three years until the recent closing of its first outside investment. It raised $5m in a funding round led by Gobi Partners, a major Chinese venture capital firm that in recent years has focused more on the Greater Bay Area, which encompasses megacities like Shenzhen. and Hong Kong. Singapore-based K3 Ventures also participated in the round.
Ever since he received his first watch – a Flik Flak – at the age of five, Chu has been obsessed with watches. But collecting fine watches, like works of art, is too expensive for most young people, so the hobby is normally associated with an older, older clientele.
The wristband check appeals to a different demographic. Forty-three percent of its customers are under 30, according to Chu. Although he is unable to disclose the company’s revenue, he claims that the platform has sold “several watches that have generated transactions of over $1 million”. In total, Wristcheck has amassed a “community” of 80,000 members, meaning people it has interacted with online and at offline events.
“We see [Wristcheck] like the future of watch enthusiasts who really can’t get anything from retail,” says Chu. More young consumers are getting into watches, he adds, thanks in part to Apple. Contrary to popular belief that Apple Watch spelled the death knell for the luxury watch industry, Chu says it is actually helping to raise awareness among Gen Z who grew up with smartwatches.
“Apple Watch is the greatest thing to happen to the watch industry,” says the founder.
The company is strategically based in Hong Kong, known as the capital of watchmaking thanks to its advantageous tax policy. During COVID, the bulk of Wristcheck’s customers are local, but as Hong Kong reopens its border, the city is gradually welcoming international travelers. The Wristcheck’s overseas shippers and buyers are growing in tandem, which are experiencing a sharp increase.
To date, more than 15% of Wristcheck’s returnable parts come from overseas customers. Many of its customers prefer to pick up their purchases in Hong Kong, taking advantage of the city’s tax-free program.
The city’s proximity to the tech hub of Shenzhen, which is just across the border in mainland China, will also make it easier for Wristwatch to hire engineers, a common strategy for Hong-based tech companies. Kong. To date, the startup is actively seeking a CTO to develop its AI infrastructure.
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With the new capital raise, Wristcheck aims to expand its proprietary image recognition tool that can authenticate watches in photos uploaded by sellers. Pre-owned watches, Chu says, are one of the most counterfeited categories across the board.
“The more we zoom in [a photo] is, the most obvious if the watch is genuine. So we just need to form a collection of real and fake watches,” he explains. In addition, the platform cross-checks stolen watches registered with police stations around the world.
The application of image recognition to e-commerce is not new. Alibaba’s Taobao marketplace has long allowed people to search for products by uploading photos. But timing is key to digitizing the luxury watch business. During COVID, much of the research and shopping for luxury watches has moved online. At the same time, multimillion-dollar NFT sales have made consumers, especially Gen Zers, more comfortable spending large sums of money online, Chu suggests.
Ultimately, the startup aims to be the “benchmark for watch prices”. To that end, it plans to dedicate some of its new funding to building an engine that gleans real-time and historical price data, which is supposed to bring more transparency to the watch industry. opportunity.