The Hoxton headquarters of Subdial, a business founded in 2018, ticks plenty of the boxes you’d expect for an East London tech startup: an airy open-plan space in a mixed-use block, fridges stocked with craft beers, expansive standing tables for team get-togethers, a pet dog padding around.
Less familiar, though, is the large, glass-fronted cubicle that sits at the heart of the building. It’s home to a small team of white-coated watchmakers, hunched over workbenches, who carry out the inspection, servicing, and authentication of the thousands of pre-owned watches that Subdial transacts.
The company’s founders, Christy Davis and Ross Crane, seemingly embody the same qualities they ascribe to the customers flowing into the popular pre-owned market: high-achieving professionals whose ease around subjects like finance, asset trading, and data analytics has greased their journey down the rabbit hole of watch collecting, an area once better known for murkiness and unscrupulous practices.
According to Subdial, trading volumes across the market in June reached an all-time high, despite the economic headwinds. Their Subdial Market Index, a chart tracking the rise and fall of prices across 50 of today’s most bankable watches, is now a must-read among aspiring watchophiles, and has recently become the subject of a tie-up with Bloomberg, the business-focused media group. Its pundits can now be found on air discussing the index’s moves and underlying sentiments in the same way they’d discuss shifts in the FTSE 100.
“It’s a reflection of the strength of our data, but also of where a lot of the interest in this is now coming from,” says Crane, a data scientist who met Davis when they were both working for the accounting and consulting firm Ernst & Young. He explains that buyers are mostly under 45, at ease with digital transactions of high value, and hands-on in the management of their wealth and assets. And most of them came into watches only in the past few years.
Subdial founders Christy Davis, left, and Ross Crane
Subdial
But it’s how they think about watches that reflects the modern shift—and huge growth—in the pre-owned market, a growth exemplified by Richemont buying UK-based Watchfinder, founded in 2002, for an undisclosed sum in 2018 (though a figure of £250 million, or $317.6 million, was widely shared within the industry at the time), the same year Subdial was founded. Even Rolex now has an official pre-owned scheme, launched last year in Europe and now active in the US.
“They think in terms of the collection rather than in terms of an individual watch,” Crane says. “Ownership is at the core. It’s not just holding an asset until you offload it, but very actively and assiduously building a collection, and getting a lot of fun out of that, while investing your money where it keeps its value.”
The thing about the collector mindset is that there’s always one more thing to add—and, accordingly, something to get rid of to fund the purchase. “That’s the sweet spot for us,” says Crane. “You hit both sides at the same time.”
Nevertheless, one look at the index and the picture doesn’t necessarily look so healthy: The direction of prices has been relentlessly downward over the past 18 months in the wake of a bubble that blew up in late 2021 and early 2022, collapsing thereafter more or less in tandem with the crash in cryptocurrencies and NFTs. For instance, according to the Subdial Index, the Rolex Submariner Kermit, a green bezel version of the brand’s famous dive watch, is down 14.6 percent in the past year, and has dropped from a high of just over $20,000 in April last year to $15,667 today.
Now that the pure speculators have left the stage, though, market commentators are firmly of the belief that things have settled, and that the prospects for the pre-owned market remain singularly rosy. In a report earlier this year, the watch industry advisory LuxeConsult predicted the secondary market surging from $27 billion now to $85 billion by 2033, sailing past the primary market in the process.
A report by Deloitte late last year was less bullish, but had the secondary market reaching just shy of $40 billion by 2030 nevertheless.
“It’s growing much faster than the primary market, not least because a few primary brands are not capable or wanting to deliver the quantity that the market is asking for,” says LuxeConstult principal Oliver Muller. “There are huge numbers of watches out there in the world sitting around, and there’s been a shift in the demographics of watch buyers toward millennials and Gen Z, who don’t have a problem selling and trading.”
Subdial, which is backed by funding from Active Partners, a VC firm focused on consumer tech startups, is far from the only young platform looking to take advantage of this. Tech-first businesses like Singapore-based Wristcheck, auction disruptor Loupe This, and data specialist WatchCharts are among those entering the fray, while the world’s most famous footballer, Cristiano Ronaldo, made headlines in July by taking a stake in by far the largest online global marketplace for watches, Chrono24.
The value of pre-owned watches has steadily declined over the past 18 months
Subdial
Subdial’s founders, however, reckon they have spotted an untapped gap in the market, and have launched a new tool designed to help them exploit it. Their data-led approach, they say, has thus far enabled them to capitalize on key inefficiencies in how the market operates—by, for instance, offering highly accurate pricing that’s responsive both to market fluctuations and predictions around how quickly a watch will sell, and by streamlining both the buying/selling process and the fees they consequently need to charge.
That all works very nicely, says Crane, for the kinds of watches that populate the Subdial Index: the lightning-hot models from Rolex, Patek Philippe, and Audemars Piguet that account for by far the largest slice of the market (more than 55 percent, according to LuxeConsult) and consequently provide reams of data that Subdial’s proprietary algorithm can crawl over and analyze.
But beyond the Index lies a sea of rarer, collectible watches—specialist pieces, forgotten classics, limited editions, iterations of iterations—that are much harder to place quickly with a buyer, and for which far fewer data points exist.
However, it’s these pieces that Subdial’s customers get increasingly drawn to as they get deeper into the hobby, says Crane, once their curiosity is no longer satisfied by well-known Rolexes.
“There are a lot of watches that are really quite niche, and for which you have a challenge. There might be someone who would really want this watch, but is it likely at any given moment that that person is looking? Probably not,” Crane says. That means such watches can sit on marketplaces unsold for weeks or months, or more likely never reach the market at all, even though the owner would be open to offers. “The fact is, the worst time to sell is when you absolutely have to. So the question becomes, how do you create liquidity for those models where they are inherently illiquid?”
Subdial’s strategy to open up this market also makes things more fun for those who just focus on Rolex and Patek big hitters. A new suite of features enables users to treat a collection more like an investment portfolio by registering a collection, tracking current market prices, setting buy and sell alerts, and receiving price guidance. Crucially, it also identifies potential transactions from within the wider network. In other words, a watch doesn’t have to be actively placed on the market for a potential buyer to find it and to place an offer.
The Patek Philippe Nautilus Stainless Steel Moonphase 5712/1A-001, Rolex Lady Datejust Steel & Gold 69173, and Audemars Piguet Royal Oak Jumbo Ultra Thin 15202ST.OO.1240ST.01 are the top performing pre-owned watches from each brand on the Subdial Index in the past 30 days.
Unlike a peer-to-peer marketplace, all fulfillment thereafter—payment, authentication, servicing, insurance, shipping—is carried out by Subdial, enabling clients to trade anonymously but securely.
And for those who trade frequently (Davis and Crane say that many of their customers buy or sell a watch at least once a month), an incentive scheme allows them to move up through membership tiers, with reduced transaction fees the higher you go.
It’s all a long way from the days of sounding out dealers down London’s Portabello Road, but also from the time-consuming efforts and high fees associated with marketplaces and online dealerships.
“If you are a collector,” says Davis, “the best way to sell your watch would still be to happen to know somebody who just, at that moment, really wants that piece. We’re using a network-based approach to replicate that in a global way, and to make it fun.”
However, while Subdial is hoping its strategy will help flush plenty of hard-to-sell watches back onto the market, it’s far from the only platform to be offering an array of portfolio management tools to its customers, or to be trumpeting the quality of its data as a key strength of its offer.
On the sprawling Chrono24 marketplace, for instance, users can build up virtual collections, set notifications on their wish lists, and scan a vast array of pricing information. Collectors looking purely for data may turn to the aforementioned WatchCharts—founded in Austin, Texas, in 2019—which offers users a variety of collection-tracking tools including guide pricing, up to five years of historical price analytics, sales volume history, and days-on-market history for top-paying subscribers.
“The vast majority of our users are private collectors,” says WatchCharts’ 27-year-old founder Charles Tian, who created the site when, as a software engineer and budding watch collector, he realized there was nothing in the watch segment to compare to sites like StockX, the platform for sneakers and streetwear, or the longstanding car resource Kelley Blue Book.
“When I first came up with this idea, I felt someone must have done it already. I was manually collecting data points and building spreadsheets, but it didn’t seem like there was a platform dedicated to tracking these values and telling a consumer what they should be paying.”
Tian says the bubble and crash of 2021 and 2022 brought a huge amount of interest to watch pricing, much of which could be followed live: WatchCharts’ Instagram account, populated with infographics charting the movements of blue-chip pieces, has more than 122,000 followers.
A recent post takes a detailed look at Omega’s Speedmaster Calibre 321 Ed White—named after astronaut Edward White, who wore the original on his 1965 space flight, where it became the first watch worn on an extravehicular spacewalk (EVA) carried out by a US astronaut. According to WatchCharts, the piece holds its value extremely well on the secondary market, with a price hovering between $18,000 and $21,000 ever since its release in 2020. Presently, the Ed White trades for around $18,600, 21 percent above its original retail price of $15,400.
As with the founders of Subdial, Tian—who bought his first watch only in 2017—says this all reflects a fundamental shift in both ages and attitudes of watch collectors. “My generation is the new generation of collector,” he says. “We don’t see it as vulgar to talk about values. We’re passionate about watches, but we’re also practical—and I know that most of the watches I buy and sell are not going to stay in my collection forever.”
