We all need to tell the time right?
Most of us spend 30 bucks on a new Casio watch from the local watch store. Some of us may buy a smartwatch for a couple of hundred for convenience. Some of us may even spend a couple of thousand for a new Rolex to show off to our friends. That makes sense, right? Not only have a watch to tell the time, but to also show off to satiate our desire to feel exclusive.
Spending an excessive amount of money on luxury accessories is widely accepted, and, is strangely not questioned. But what about the watches that cost a couple of hundreds of thousands of dollars, or even millions of dollars? Why would anyone spend so much money on something that can be bought for much cheaper?
Most of them do not even look good, and some of them are straight up weird. (see above)
Let’s delve deeper and find out why these watches cost so much and why people buy them.
The supply for these highly priced timepieces is very low, only making a handful of them, which immediately bumps up the value of these products. Normally when a product is made in low quantities the price of the item will be extremely high. On top of this, the target demographic of these watches are people with excessive amounts of money, who would have no issue in paying these high prices, and therefore, the companies that produce these watches mark up the prices even more.
These watches are also very expensive to make, this does not only include the cost of purchasing materials to make the watches, which are the natural resources that are needed to make the watches (Diamonds, Gold, other precious metals), but the cost of designing, and implementing new technologies into the watch.
You may think to yourself. What new technology do watches need? They just need to tell the time. But some people beg to differ. For example, most high-end watch brands implement the feature where the watch hands are not disturbed by the magnetic forces acting upon them. This may seem insignificant, but the amount of research and development that went into producing such a thing is what raises the price to incredible amounts.
Which brings me to my final point. For there to be research and development of new watch designs and features, there need to be people. Labour resources. As we all can expect, these people need to be paid. These workers put tremendous amounts of effort into developing new ideas, and need to be paid accordingly. But the main labour cost of watches is paying the people that make the watch itself. High-end watch brands have a system in place where one person makes a watch all by themselves. These master watch craftsmen put in a lot of effort into making watches, as they need to meet certain criteria, which also takes a lot of time for them to do so.
As you can see from the chart above, the luxury watch market is not going to drop anytime soon and is even predicted to keep rising. The watches are considered exclusive items, and raise in price over the years, a bit like the housing market. In the future, we are probably going to see new companies joining the market and new features being developed, which will further encourage people to spend stupid amounts of money on stupidly expensive watches.
Bibliography
https://www.theguardian.com/lifeandstyle/2016/oct/19/luxury-watch-industry-survive-digital-age
https://www.statista.com/statistics/940452/luxury-watch-market-value-worldwide/
Year 11 MHS Economics 2020 
Solid article, really explains the topic of conspicuous consumption. Lovely images.
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A concise article with eye-opening pictures. I do like to think that these watches are highly priced as it is targeted at the wealthiest people, and to give them the satisfying feeling of exclusivity. Overall good job!
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Good analysis of pointless spending.
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lovely can you link the video explaining the watch?
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