Hong Kong is well known as a haven for watches. Some even said Hong Kong is where you can get luxury watches at a reasonable price. But to think about it, are watches cheaper in Hong Kong?
Hong Kong watches might be cheaper as there is no sales tax, but you might have to pay additional costs such as import duty to take the watch home. You might also face warranty and service issues later. There are also problems of Frankenstein, or super-clone watches being sold in Hong Kong.
Why Do People Think Watches Are Cheaper In Hong Kong?
Watches can be cheaper in Hong Kong because it has no sales tax, many watch factories, the market and demand is large.
Hong Kong Makes Many Watches
Hong Kong is known as one of the major factories for watches globally, where movements, cases, watch parts are manufactured and assembled. These factories also produce and assemble watches for major watchmakers.
This means Hong Kong might benefit from lower logistics fees – the watches leave the factory and go straight into the boutiques. The savings here help watchmakers save costs, and they could sell the watch cheaper.
Large Demand and Market
Secondly, Hong Kong has cheaper watches due to its large watch market. Hong Kong is one of those areas with a large concentration of wealth, meaning the demand for luxury watches is high.
As a result, there are a lot of boutiques selling watches in Hong Kong’s main shopping districts, such as Central or Causeway Bay.
Aside from that, Hong Kong also has a major secondary market, with many dealers buying luxury watches and reselling them. This creates competition and helps keep prices competitive. It is said that Hong Kong’s used watch market is one of the best in the world.
Hong Kong’s used luxury watch market is a huge magnet for watch collectors and bargain hunters.
ALSO READ: What Makes A Watch A Luxury Watch?
No Sales Tax
But the biggest reason people think watches are cheaper in Hong Kong is that it has no sales tax, unlike many countries that slap VAT or tax on sales of luxury goods.
Less tax means you only pay for the watch and nothing else.
Compare that with countries such as Switzerland, which charges a 7.7% Value Added Tax on sales of watches. Some European countries are known to slap up to 20+ percent for luxury goods.
Are There Issues If I Buy Watches From Hong Kong?
However, things are not as perfectly rosy as well.
There are additional issues, risks, and problems that you might have to deal with if you choose to buy a watch from Hong Kong and bring them back to your home country.
You might not have to pay tax for watches bought from Hong Kong, but you still have to pay tax to your home country.
The tax is usually called import duty or customs duty. The goal here is to ensure businesses in your home country are protected from competition.
|First $800||No Duty levied|
For the US, you can bring up to $800 worth of goods duty-free. You will need to declare anything over that at the border and pay your import duty.
If you shop for a premium or luxury watch, you will easily cross that threshold. If you purchase an affordable watch, then this is not an issue for you.
The first $1,000 past the original $800 are charged 3% import tax. If your watch is $1,500, you will be charged 3% on the extra $700 (that passed over the $800 limit).
That’s an additional $21. It doesn’t sound too much, but once you move into purchasing more expensive watches, the tax can really hurt.
Once you cross the first $1,000 threshold, the tax rate will go from 3% to 6.5%. If you paid $10,000 for a Rolex Submariner, you have to pay an additional $563 in tax.
Paying the import duty may erase all the potential savings you just made buying watches from Hong Kong.
Warranty And Service
Many watches come with a worldwide warranty, although it does not mean processing it would be easy.
By purchasing a watch in Hong Kong and then claiming a warranty in another country, things might get a little difficult for you and take longer.
For example, the service center might need to communicate with the Hong Kong office to check for the watch’s warranty number, history just to process your claim.
Servicing might also be an issue. At times watch models might have slight differences when they go to different countries.
For example, some watches might use the local language on their dial or day window.
When you try to service watches outside of their home market, issues such as parts and expertise might come up.
As a result, your watch might need to be sent back to Hong Kong to be serviced and sent back again. That is a lot of time lost.
This is something to consider if you plan to buy a watch in Hong Kong.
If you buy your watch from Hong Kong and try to sell them later at home, you might have additional difficulty selling them.
This is because experienced watch buyers tend to stay away from watches not meant for the home market. They understand issues with servicing, parts and will just stay away. There is a higher likelihood pawn shops will not take your watches too.
They will instead look for watches made and sold for the local market.
How To Buy Watches From Hong Kong?
However, if you plan to go ahead and shop for watches in Hong Kong, here are additional tips that might help you.
Official Dealers Only
If you are shopping by yourself, please buy from official dealers only. This means buying with dealers who are official resellers of the watch brand you are looking for.
You can do so by checking the watchmaker’s website to list their official dealers in Hong Kong and go from there.
It might also be a good idea to just spend time calling the dealers directly and ask for the watch model and their price.
This helps protect yourself against buying imitation watches that are hard to tell apart from real ones.
Get A Local To Help
If you have connections with a local Hong Konger, they might be able to help you to shop for watches.
Those with basic knowledge would at least take you to the shopping district in places such as Central or Causeway Bay, as there are many watch dealers there.
Those that really know their watches might even take you to used watch dealers, where real bargains can be found.
Locals are also conversant in Cantonese, the lingua franca spoken in Hong Kong. They might just help you negotiate extra discounts too!
Always Check With The Service Center.
If you plan to go hunting for used watches, always have the watch you plan to purchase checked with the service center.
This is because there are irresponsible watch dealers that sell imitation watches and try to pass them off as real ones.
There are also cases of ‘Frankenstein’ watches. A Frankenstein watch is a watch that has a mixture of genuine and non-genuine parts.
For example, a watch might have a genuine bracelet and case, but a non-genuine crystal.
In some nasty cases, the whole external of the watch is genuine, but the original movement has been swapped out.
To avoid issues like this, always have the watch checked with the service center to verify its authenticity.
You might have to pay extra, but it’s for your own peace of mind and to avoid you from being ripped off by irresponsible sellers.
Wrapping Up: Are Watches Cheaper In Hong Kong?
Watches in Hong Kong might be cheaper than your home market since Hong Kong does not charge sales tax.
However, when looking deeper, there are issues such as import duty and the issues with reselling foreign market watches. On top of that, you also need to be worried about non-genuine watches and parts.
In their own way, all these negates the possible savings you can make by buying watches in Hong Kong.
We have always advised our readers to purchase watches from your home market for peace of mind and easier management.