How National Chinese Watch Brand Transforms its Sales Model under New Ecommerce Era
Tianjin Seagull Watch Group is a watchmaking company located in Tianjin, China. Founded in 1955, it is the manufacturer of the first made-in-China watch. Now it is the world’s largest manufacturer of mechanical watch movements, producing one-quarter of total global production by volume.
In 1973, Seagull brand was approved by the State Council. In the 1990s, electronic watches appeared, and Seagull also joined the wave, but as the market gradually became saturated, China’s electronic watch industry began to shrink.
Wang Deming, then the general manager of Seagull, decided to stop the production of electronic watches, and return to hire masters to produce mechanical watches. In 2007, Seagull produced the “three classic watches in the world”: tourbillon, repeater and perpetual calendar.
Since then, Seagull started to make a profit. Parts production also improved: a quarter of the movements in the world come from Seagull, and many high-end watch brands use parts manufactured by Seagull.
Seagull started its foray into e-commerce in 2008. However, with rising traffic costs and commission expenses, the company’s online business became more and more challenging.
What’s more, with increasing market penetration from mechanical watch makers, Seagull’s average price also declined. As recalled by one Seagull manager, the average unit price was 2,400, 1,700, and 1,000 yuan in 2008, 2014 and 2019, respectively.
The COVID-19 pandemic further attributed to this trend. Due to the pandemic, consumers became more cautious in their spending habits. Seagull began to push lower priced items to consumers while also considering new distribution channels.
Starting this April, Seagull distributor started to open Pinduoduo Store. In the first two months, monthly orders were only around 50. Since June, the merchant began to allocate more resources to Pinduoduo and joined the 10 billion yuan Subsidy Campaign.
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According to Wang Zelong, one Seagull distributor, traffic exploded in June, with the number of orders close to 650 and the unit price rising to 880 yuan. Wang believed that at this time, Pinduoduo‘s monthly sales began to catch up with Taobao. A men’s watch priced at 795 yuan has become the second-best seller of mechanical watches on the platform. The offline price of this watch is 1,200 yuan, while on other e-commerce platforms it ranges from 618 to 819 yuan.
Wang said he has never seen the volume of new stores rise so fast in his 10 year e-commerce experience. “The purpose of offering such low prices is to try new models and support new stores, and the results are way better than expected,” he said.
”I thought it would be good to sell 5 to 6 units at 800 yuan each day, but I didn’t expect to sell 20-30 units per day.”
Zhao Guangchen, responsible for Seagull’s e-commerce platform business, said that last year, Seagull’s online sales surpassed offline for the first time. But after Covid-19 online sales started to decline. Pinduoduo will help to boost with the sales in the second half of the year.
