The Leading Market Research in the Luxury Watch Industry.

Since 2004

The Leading Market Research in the Luxury Watch Industry!

Since 2004! !

2012!
HAUTE HORLOGERIE PREVIEW

The Leading Market Research in the Luxury Watch Industry. Since 2004

A MARKET STUDY LIKE NO OTHER

Since 2004, the World Watch Report has provided the luxury watch industry with an exclusive analysis of the leading brands, models and client preferences. The World Watch Report is based on more than 1 billion unaided client intentions entered into search engines.

This search data is collected using Digital Luxury Groups proprietary technology, and is translated into client intentions related to brands, models, distribution, replicas, price, accessories etc.*
*A detailed explanation of the methodology is available at the end of the document

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

TRACKING 40 OF THE MOST RENOWNED LUXURY WATCH BRANDS

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

IN THE TOP 20 MARKETS ACROSS THE GLOBE

Germany United Kingdom Russia United States France Spain Mexico Switzerland Italy India Brazil Saudi Arabia Thailand Qatar Japan China Taiwan Hong Kong Singapore

United Arab Emirates

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

RESEARCH SCOPE OF HAUTE HORLOGERIE MEDIA KIT

15 Haute Horlogerie brands covered
(out of the total 40 brands available in the full report)

Only key highlights and partial metrics provided Full report on 40 brands to be released in March at Baselworld
Free document made for the solely purpose of the 2012 Edition of the Salon International de la Haute Horlogerie

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

THE HAUTE HORLOGERIE CATEGORY IN 2011 | KEY HIGHLIGHTS

.
See report on P.9

China surpassed the USA as the leading market ~ for the first time since the study launched in 2004, China recorded the highest demand for high-end watch brands with 25% market share IWC, Patek Philippe, Zenith are the category leaders ~ The top 3 worldwide Haute Horlogerie brands remain unchanged from the 2010 market figures gathering more than 50% of the worldwide market share Jaeger-LeCoultres Tourbillon ~ The Le Sentier-based brand is currently the most in demand for highly technical keywords related to the search of tourbillon timepieces

See report on P.15

See report on P.19

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

THE HAUTE HORLOGERIE CATEGORY IN 2011 | KEY HIGHLIGHTS

.
See report on P.20 See report on P.23

Royal Oak vs. Reverso ~ Audemars Piguets Royal Oak overtook Jaeger-LeCoultres signature Reverso after 3 consecutive years in the first position Singapores Collectors Hub ~ Singapore showed evidence of a very strong watch connoisseur market with 17.5% of demand directly associated to specific models Impressive growth in mobile internet ~ The global market experienced a shift in media consumption with 17% of Haute Horlogerie searches performed through a web-enabled mobile device Social media booming ~ IWC and Jaeger-LeCoultre proved to be the trend setters in both Western and Chinese social media

See report on P.29

See report on P.31

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

. The Relative Number of Haute Horlogerie Searches by Market

GEOGRAPHIC SEARCH ORIGIN
Germany 7.38% United Kingdom 8.16% Russia 5.35% United States 21.23% France 6.84% Spain 2.37% Mexico 0.65% Switzerland 2.74% Italy 6.11% India 1.13% Brazil 1.04% Saudi Arabia Qatar 0.08% Japan 6.14% China 24.89% Taiwan 1.15% Hong Kong 1.19% Singapore 1.56%

0.12%

Thailand 1.51%

United Arab Emirates 0.35%

January to November 2011 Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

GEOGRAPHIC SEARCH ORIGIN

China surpassed USA as the leading market ~ for the first time since the study launched in 2004, China overtook the USA as the country exhibiting the highest demand for high-end watches, with a 25% market share Strong foothold in the West ~ Demand from Europe and USA remained strong, gathering 55% of the total searches. Of note were early signs of decline from France and the US, experiencing drops of 1.4 and 5 percentage points respectively (at a constant perimeter) South-East Asia leads midsize markets ~ Singapore and Thailand (3%) are positioned as strategic second-tier growth drivers, ahead of Hong Kong and Taiwan (2.3%), Brazil and Mexico (1.7%) and the Middle East (0.5%)

Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

Share of Searches by Administrative Division

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Administrative Division Beijing Shanghai Zhejiang Guangdong Jiangsu Province Liaoning Province Shandong Henan Hebei Tianjin Fujian Province Sichuan Province Heilongjiang Hubei Anhui Shaanxi Shanxi Jilin Hunan Chongqing Guangxi Jiangxi Province Inner Mongolia Yunnan Guizhou Xinjiang Hong Kong Hainan Gansu Province Ningxia Qinghai Tibet Share of searches 6.7% 6.2% 5.9% 5.5% 5.2% 4.7% 4.5% 3.8% 3.7% 3.7% 3.6% 3.6% 3.5% 3.5% 3.2% 3.0% 3.0% 3.0% 2.9% 2.6% 2.5% 2.3% 2.2% 2.2% 1.7% 1.6% 1.6% 1.6% 1.3% 0.8% 0.4% 0.2%

DEMAND FOR HAUTE HORLOGERIE IN CHINA | REGIONAL SEARCHES

Baidu Data Only Digital Luxury Group, DLG SA, 2012

January to November 2011

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The Leading Market Research in the Luxury Watch Industry. Since 2004

DEMAND FOR HAUTE HORLOGERIE IN CHINA | REGIONAL SEARCHES

A multi-faceted market ~ Composed of three major regions and 56 ethnics groups, Chinas diversity requires an in-depth understanding of local culture and clientele preferences Dominance from 1st and 2nd tier coastal cities ~ At the heart of most high-end shopping streets, coastal cities such as Beijing, Shanghai, Hangzhou and Dalian, gathered 56.1% of the nations demand for high-end timepieces, highlighting the concentration of consumers in these areas Brand preferences vary across regions ~ Deeply rooted heritage brands such as Patek Philippe and Vacheron Constantin resonate favorably with traditional clients from the Beijing region, while IWC attract a relatively younger, urban and trendy audience from Shanghai, Anhui and even Hainan

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The Leading Market Research in the Luxury Watch Industry. Since 2004

. Number of Haute Horlogerie searches per 1,000 Internet users

HAUTE HORLOGERIE AFFINITY INDEX

January to November 2011 Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

HAUTE HORLOGERIE AFFINITY INDEX

Swiss Watch Interest ~ The home of Haute Horlogerie is also the country with the highest density of Haute Horlogerie searches Followed by Singapore, the Asian Switzerland ~ also recording above average results making it the Haute Horlogerie hub for watch enthusiasts

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The Leading Market Research in the Luxury Watch Industry. Since 2004

MARKET SHARES OF BRAND SEARCHES | WORLDWIDE

Haute Horlogerie Brands

January to November 2011 Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

MARKET SHARES OF BRAND SEARCHES | WORLDWIDE

IWC, Patek Philippe, Zenith category leaders ~ The top 3 worldwide Haute Horlogerie brands remain unchanged, gathering 50% of worldwide market share Laggards' difficulties to follow the path ~ smaller brands such as Breguet, Franck Muller and Blancpain are losing share of the global demand while the leading brands such as Jaeger-LeCoultre, Vacheron Constantin and Audemars Piguet are gaining market share Richemont leads the Haute Horlogerie market ~ 3 out of the 5 most searched Haute Horlogerie brands belong to the Richemont Group while the Swatch Groups high-end brand Breguet, appears only in the 7th position

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

. Weight of Regions in Haute Horlogerie Brands Searches

MARKET EXPOSURE BY BRAND

Data for Middle East region was hidden in the graph due to its low visibility within the overall figure Digital Luxury Group, DLG SA, 2012

January to November 2011

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The Leading Market Research in the Luxury Watch Industry. Since 2004

MARKET EXPOSURE BY BRAND

Strong Dependency in Asia ~ Patek Philippe (46%) and especially Richemont brands: Vacheron Constantin (64%), Jaeger-LeCoultre (44%) and IWC (38%) exhibit a strong recognition across Asia The old continent still plays a key role ~ A. Lange & Shne, Richard Mille, Zenith, Ulysse Nardin and Jaquet Droz remain heavily focused in Europe Middle East at its digital infancy ~ Qatar, Saudi Arabia and UAE represent no more than 1% of the total Haute Horlogerie related searches. While their two favorite brands are similar to the global average, they show more interest for Audemars Piguet, the third most demanded brand in the region.
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The Leading Market Research in the Luxury Watch Industry. Since 2004

Brand Market Share of Tourbillon Movement Related Searches

SEARCHING FOR TOURBILLON MOVEMENTS | US FOCUS

January to November 2011 Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

SEARCHING FOR TOURBILLON MOVEMENTS | US FOCUS

Jaeger-LeCoultres Tourbillon ~ The Le Sentier-based brand recorded the highest number of technical searches related to tourbillon timepieces thanks to its world-famous gyrotourbillon Category leader IWC not as popular ~ Despite its leading market share in the US Haute Horlogerie market at 20%, the brand only gathered 5% of the highly targeted searches related to technical movement demand Breguet rises in the technical search ~ Although relatively low in the Haute Horlogerie ranking (5%), client interest for Breguet movements underlines its highly technical perception among American clientele ranking 4th in the Tourbillon related searches

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 MOST SEARCHED MODELS | WORLDWIDE

Haute Horlogerie Brands
2012 2011 1 2 3 4 5 6 7 8 9 10 2 3 1 10 9 5 13 7 4 11 Brand Models Audemars Piguet Royal Oak IWC Portuguese

Total 7.36% 6.66% 5.68% 4.71% 4.44% 3.55% 3.32% 3.29% 2.97% 2.54% 44.53% 55.47% 100.00%
January to November 2011 2. Portuguese IWC 3. Reverso Jaeger-LeCoultre 1. Royal Oak Audemars Piguet

Jaeger -LeCoultre Reverso IWC IWC IWC Portofino Pilot Mark

Audemars Piguet Royal Oak Offshore Zenith IWC Patek Philippe El Primero Aquatimer Nautilus

SUB-TOTAL OTHERS TOTAL

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 MOST SEARCHED MODELS | WORLDWIDE

Strong market share for the leaders ~ Among the 500+ Haute Horlogerie models tracked by the World Watch Report, the top 10 models account for 44.5% of the worldwide demand Royal Oak vs. Reverso ~ After 3 consecutive years in the first position, Jaeger-LeCoultres Reverso has been replaced by Audemars Piguets Royal Oak due to the Royal Oaks strong demand evolution in Western markets- specifically the US, UK and Italy Strong Models Awareness for IWC ~ Schaffhausens brand accounted for half of the top 10 most searched Haute Horlogerie models worldwide

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 HAUTE HORLOGERIE "CONNOISSEUR MARKETS

Weight of Models-Specific Searches by Country

January to November 2011 Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 HAUTE HORLOGERIE "CONNOISSEUR MARKETS

Singapores Collectors Hub ~ Singapore shows evidence of being a connoisseur market with 17.5% of demand directly related to the search for specific models Thailand Emerging ~ The Thai market can be considered as the up and coming Haute Horlogerie specialists; showing the most client interest for the 10th ranked model, the Patek Philippe Nautilus The demand for models in the Western world ~ In absolute values, US, UK and Germany account for 55% of the total number of searches for models

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 HAUTE HORLOGERIE AMBASSADORS | WORLDWIDE

Relative Share of Searches for Haute Horlogerie Ambassadors
Brand = = Audemars Piguet Audemars Piguet Ambassadors Sachin Tendulkar Lionel Messi Gerard Butler Rafael Nadal Diane Kruger Novak Djokovic 1 2 4 3 6 5 2012 2011 1 2 3 4 5 6 7 8 9 10 Activity Cricket Soccer Cinema/TV Tennis Cinema/TV Tennis

.
1. Sachin Tendulkar Audemars Piguet

Total 26.60% 13.40% 12.20% 11.10% 8.20% 5.60% 4.40% 3.70% 2.10% 1.70% 89.10% 10.90% 100.00%
January to November 2011 3. Gerard Butler Roger Dubuis 2. Lionel Messi Audemars Piguet

NEW Roger Dubuis NEW Richard Mille Jaeger LeCoultre

NEW Audemars Piguet NEW Audemars Piguet Audemars Piguet Audemars Piguet

Emmanuelle Chriqui Cinema/TV Michael Schumacher Motor Sports Quincy Jones Zinedine Zidane Music Soccer

NEW IWC

SUB-TOTAL OTHERS TOTAL

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

TOP 10 HAUTE HORLOGERIE AMBASSADORS | WORLDWIDE

The Little Master rules ~ Indian cricket legend Sachin Tendulkar remains the most searched Haute Horlogerie ambassador for the third consecutive year, as a result of the huge Indian fan base accounting for 90% of the search volume Gerard Butler newcomer in the ranking ~ Following his passion for the brand, the Scottish actor boosted demand for the Geneva-based modern Haute Horlogerie manufacture Roger Dubuis, claiming the third position in the ranking Audemars Piguet ambassadors network ~ Overall the celebrity endorsement strategy was largely dominated by Audemars Piguet featuring 6 out of the 10 the most searched ambassadors
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The Leading Market Research in the Luxury Watch Industry. Since 2004

UNDERSTANDING CULTURAL-SPECIFIC BEHAVIOR

Share of Specific Search Intentions by Country

January to November 2011

Replica: All brand related searches that contains keywords associated to counterfeit intention. I.E. Rolex Replica Watch Price: All brand related searches that contains keywords associated to price. I.E. Rolex Price List Distribution: All brand related searches that contains keywords associated to the finding of a point of sales . I.E. Rolex shop Product Range: All brand related searches that contains keywords associated to the product itself, its movement, its color, its material, or its style. I.E. Rolex gold
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The Leading Market Research in the Luxury Watch Industry. Since 2004

UNDERSTANDING CULTURAL-SPECIFIC BEHAVIOR

Haute Horlogerie client interests differ ~ Client behavior for Haute Horlogerie brands varies widely across the markets and regions of the world Price sensitivity of the Chinese~ Search patterns in China tend to be strongly related to price inquiries about high-end timepieces; it is actually the second most common search, right after brand related searches and just before Models & Collections Counterfeit searches still an issue in the US~ American clients tend to search proportionally more for counterfeit versions of Haute Horlogerie, accounting 2.5% of their overall search patterns

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

Share of Mobile Searches Per Country

MOBILE USAGE OF THE HAUTE HORLOGERIE CLIENTELE

January to November 2011 Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

MOBILE USAGE OF THE HAUTE HORLOGERIE CLIENTELE

Impressive growth in mobile Internet ~ While it is expected that mobile internet users will overpass desktop users
only in 2014, the market is already witnessing this shift in media consumption: 17% of global Haute Horlogerie searches were performed through web-enabled mobile devices

Strong variations across markets ~ Nearly half of the searches conducted for Haute Horlogerie brands are through mobile devices in Japan, while European markets show less mobile use between 12-15% (the exception being the U.K. with 20% of mobile searches ) On the go client concerns ~ Points-of-sale related searches are performed twice as much from a mobile device than a desktop, which underlines the importance for brands to adapt digital strategies for their brick-and-mortar business

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON FACEBOOK

Mapping Haute Horlogerie Brand Performance on Facebook

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON FACEBOOK

Exclusive time on Facebook ~ To date, half a million watch aficionados are connected to Haute Horlogerie brands on Facebook, the largest social network with 800 million active users worldwide IWC leads the path ~ Consistently with its leading market position, IWC dominates the Facebook landscape for the second consecutive year on quantitative criteria (over 220,000 fans) whilst maintaining a favorable level of community engagement (0.41% average) Jaeger-LeCoultre as the challenger ~ A strong and engaging editorial and multimedia strategy on Facebook led Jaeger-LeCoultre into the top with over 84,000 fans and 0.54% engagement rate Patek Philippe stayed away from the social arena ~ The Swiss watch manufacturer remained the only Haute Horlogerie brand not to be officially present on social media
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The Leading Market Research in the Luxury Watch Industry. Since 2004

SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON TWITTER

Mapping Haute Horlogerie Brand Performance on Twitter

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON TWITTER

Haute Horlogerie Tweets ~ Information sharing with clients and influencers on the micro blogging platform is part of todays communication reality: more than 60,000 mentions of Haute Horlogerie brands were observed (excluding replica & discount related tweets) Audemars Piguets leading position on Twitter ~ Among the 12 Haute Horlogerie brands active on Twitter, Audemars Piguet sets the trend while capturing over 35% of the total amount of Haute Horlogerie followers with more than 5,000 followers and a 0.55% discussion rate Engaging Jaeger-LeCoultre ~With a strong number of followers (over 3,000), Jaeger-LeCoultre maintains above-theaverage discussion rate of 0.95%, translating the brands ability to adapt both content strategy and community management to the different social media platforms
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Digital Luxury Group, DLG SA, 2012

The Leading Market Research in the Luxury Watch Industry. Since 2004

Mapping Haute Horlogerie Brand Performance on Sina Weibo

SOCIAL MEDIA FOCUS | BRAND ENGAGEMENT ON SINA WEIBO

1st Dec 2011 1st Jan 2012

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

BRAND ENGAGEMENT ON SINA WEIBO

High-end luxury watch brands reluctant to join the Chinese social media wave ~ to date, one third of the Haute Horlogerie brands are managing an official presence on Sina Weibo, the largest micro blogging platform in China. The 250 million users of the social platform account for half of the number of Chinese Internet users IWC as a first mover ~ IWCs brand positioning and local community management particularly reflects the brands ability to rapidly grasp Chinas potential amongst a younger audience of watch lovers: registering the largest number of followers (+5,000) while reaching above-the-average engagement (+0.82% VS 0.56% average)

Digital Luxury Group, DLG SA, 2012

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The Leading Market Research in the Luxury Watch Industry. Since 2004

METHODOLOGY

Search Queries Extracted from search engines, the search queries collected in the World Watch Report encompass a large semantic field of 17k+ keywords related to the brands including synonyms, plurals and misspellings. Languages Search queries are tracked in all major languages according to each key market: Portuguese, Russian, simplified and traditional Chinese, Taiwanese, Japanese, French, Italian, Spanish, German, Thai and Arabic. Search Engines Based on Google, Bing, Yandex in Russia and Baidu in China, the World Watch Report covers an average of 85% of search market share globally. Data Collection and Analysis Public and professional tools are used to automate search volume collection, thanks to Digital Luxury Groups strong partnerships with search engines. Once collected, this data is filtered, analyzed and translated into 14 intentions (brands, models, replicas, etc.) using exclusive Digital Luxury Group technology. Harmonization As multi-products brands, such as Cartier, Chopard or Bulgari, may generate significantly more search volumes than watch-only brands, data is harmonized to identify watch-only demand and exclude demand for other products (for ex. Cartier jewelry, Tag Heuer mobile phone, etc.). Similar corrections have been made for brands whose names have different associations such as Montblanc, Omega or Zenith. Social Media engagement rate The engagement rate is a qualitative indicator measuring the level of interactivity between a brand and its community on each Social Media platform. Its calculation is based on the average number of feedback (Likes and Comments) per individual post published by the brand (Status Updates), divided by the number of Fans on date of publication. Deciphering Search Intentions: A methodological approach More than tracking single brand names, the World Watch Report monitors a range of watch related searches. Using inhouse developed DemandTracker technology, the World Watch Report actually tracks 17,229 keywords associated to luxury watch brands, currently managing 14 different intentions in order to better understand the real needs of the online luxury watch clientele.

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The Leading Market Research in the Luxury Watch Industry. Since 2004

IN THE PRESS

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The Leading Market Research in the Luxury Watch Industry. Since 2004

WHO ARE WE

About Digital Luxury Group

Digital Luxury Group, DLG SA, is the first international company dedicated exclusively to the design and implementation of digital communication strategies for luxury brands. Since 2004, DLG has been publishing the World Watch Report a baseline market study for the watchmaking industry in partnership with Europa Star and with the precious support of the Fondation de la Haute Horlogerie.
Contact: Nicolas HANSSENS Research Manager Strategy & Intelligence Business Unit nhanssens@digital.luxury.com Florent BONDOUX Business Unit Manager Strategy & Intelligence Business Unit fbondoux@digital.luxury.com Digital Luxury Group, DLG SA 7 Avenue Krieg CH-1208 Geneva Switzerland

Visit our website to get detailed information: www.worldwatchreport.com or www.digital-luxury.com

Digital Luxury Group, DLG SA, 2012

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