Swatch has teamed up with China UnionPay and Bank of Communications to introduce a watch with inbuilt contactless payments functionality.
Swatch Group AG, the world’s largest watchmaker by revenue, is going head-to-head with Apple Inc. to develop the next generation of watches in China.
The Swiss watchmaker launched its answer to the smartwatch in China with a 580 yuan (US$91) analog timepiece called the Swatch Bellamy, which will start selling in January next year. While the new watch doesn’t connect to the Internet, it includes a built-in chip that allows consumers to pay for purchases while shopping, Swatch Chief Executive Nick Hayek said in a news briefing.
Swatch said it has struck deals with state-run China UnionPay Co., which holds a virtual monopoly on bank-card payment processing in China, and state-controlled lender Bank of Communications Co. Swatch will also launch the watch in the U.S. and Switzerland between January and March next year, as those two countries are rolling out near-field communication technology, or NFC, which lets devices placed close to each other exchange data, he said. He declined to disclose potential future banking partners for Swatch.
Mr. Hayek said Swatch doesn’t yet have plans to expand partnerships with other banks in China. Consumers will be able to activate the watches at Bank of Communications, which has 2,785 branches in the country, and use the watch globally, he said.
Retailers are rapidly expanding access to NFC with the spread of wearable devices and mobile payment.
Mr. Hayek said the company won’t expand the payment technology to its Tissot, Omega and other brands, and it won’t create a watch that continuously connects to the Web, as the Apple Watch does. “We don’t want to connect to a cloud,” said Mr. Hayek, noting that Swatch aims to protect consumer data and doesn’t want its watches to be reliant on electricity or the Internet.
China is one of the world’s largest watch markets by sales. Chinese consumers, at home and abroad, typically buy more than 50% of the world’s watches by value, according toLuca Solca, head of luxury goods at investment firm Exane BNP Paribas.
While many people around the world use their phones to keep track of time, Chinese consumers still buy traditional watches. “Watches are still absolutely a status symbol in China,” said Ben Cavender, a senior analyst at Shanghai-based consultancy China Market Research Group.
Consumers in the country are also quick to adapt to new technology, said Mr. Hayek, explaining why the company opted to launch in China ahead of other countries. “People here are open and they change their habits,” he said.
Source: wsj.com
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