It’s often said that the online world of buying (and selling) watches is kind of murky. I remember the days, actually not so long ago, when most watch brand websites started with a pop-up warning the visitor about watches for sale in the online world. Now, only a few years down the line, those very same brands have started to develop their own e-commerce channels. Besides these official e-commerce channels, the internet is teeming with online marketplaces and we will be asking the CEOs of the largest and most reputable online platforms to tell us more about their company, themselves and which watch tops their personal wish list.
Today we start this series of interviews with none other than Tim Stracke. He pioneered the online watch market with Chrono24, which we can safely say set the benchmark. Whenever I need information about a specific pre-owned watch, and especially its price range, I visit Chrono24. And I’ve been doing this for as long as I can remember in my search for information of pre-owned watches. It’s a great pleasure to kick off this series of interviews with the man who built Chrono24 and who has become such a key player in the collecting lives of all of us here at MONOCHROME – and I’m sure of many of our readers!
Can you give us a quick history of Chrono24?
Back in 2009, my co-founders Dirk Schwartz, Michael Krkoska and I were already experienced in the online marketplace business, but we were looking for an opportunity to build up a new marketplace. We looked at different categories – but watches were always a category that had fascinated us and we had a strong belief that this category should belong to a specialist. As we were all “watch guys” we stumbled over the website Chrono24. At that time, this was just a simple website with a listing function to give buyers and sellers all over the world an opportunity to deal with their pre-owned and vintage watches. Frankly speaking, the website didn’t look really good, but we were instantly amazed by the global reach that the two founders had achieved since 2003. So we decided to buy the page from the original founders and started to turn the website into the world’s no. 1 watch marketplace with an outstanding shopping experience. The rationale behind it was simply bringing watch collectors as well as first-time buyers and dealers together by offering a trusted marketplace fitting their needs to buy, sell or just browse watches.
What brought you to Chrono24?
On the one hand, there was our passion for the online marketplace business and furthermore the craftsmanship of watchmaking. On the other hand, we felt that there was a huge opportunity of crafting a place that brings all kind of watch enthusiasts, watch dealers, buyers, private sellers and watch collectors together acknowledging their needs and creating a win-win situation for all players.
Who is behind Chrono24? (investors and management team)
Chrono24 is run by a team of 200 passionate employees in Germany, Hong Kong and New York, each profound experts in their own field. Holger Felgner -who has been acting CEO with TeamViewer before and turned it into one of the few German unicorn businesses – and I share the roles of CEO; Michael Krkoska, our technical co-founder and CTO loves pocket watches and is the driving force behind our technology.
The founding team still controls close to 50% of the shares. Our other shareholders are hand-picked experts in watches and marketplaces. Our institutional investors from the US and Asia, who are also avid watch collectors, give us a lot of support in their respective markets. In total, around 40m EUR has been invested into Chrono24 acknowledging our efforts and supporting us on our way.
What is your business model?
Chrono24 is the world’s leading watch market providing trust and transparency to our users. Our online marketplace offers buyers, sellers and collectors access to the biggest new and pre-owned watch portfolio in the world with close to 400,000 watches. Once a user has found his perfect watch, he or she can buy it in an easy and trustful environment. Professional sellers pay a listing fee and a small transaction fee once a watch is sold. Private sellers can list a watch for free and only pay a fee once the watch is sold. So, in a nutshell: Chrono24 gives watch enthusiasts global access to the biggest pre-owned watch market in the world adding a trusted environment and easy-to-use service features understanding the special needs of watch lovers. We also just launched an auction channel for special watches.
What differentiates Chrono24? What do you bring to your clients?
Chrono24 has by far the largest collection of new and pre-owned watches for sale worldwide. And we offer watch sellers comfortable access to the biggest watch community in the world. We have close to 400,000 watches on our platform available from over 100 countries. We make the availability of the watch, quality of the sellers, and prices transparent and the hunt for that one beloved watch easy and fun, whether via our website or app. Searching, selling and buying work smoothly and is supported by a global customer support team speaking 15 different languages. Our portal even features 22 different languages and our free escrow service allows trustful sales across borders and across currencies without any risk. We have now more than 15 years of experience in the online marketplace business for premium watches. So we understand the special needs that users and especially watch enthusiasts come up with.
We are not only there to help buy and sell, but we also like to talk and write about watches and have a successful online magazine and a large following on Instagram and Facebook. Once a user has bought a watch, we offer a feature where they can track the value of their watch portfolio. It is really fun to see that the value of watches can be tracked like a stock portfolio with our digital watch collection feature.
We also offer auctions of special watches, personalised searches, newsletter alerts, notepad, tailor-made watch proposals and editorial content on brands, models and the world of wristwatches.
What are your key challenges?
Probably recruiting smart people with a can-do attitude is the biggest challenge for us right now. We’ve grown to almost 200 people and keep growing. We need smart characters to get the job done. We put a lot of time and energy into our recruiting process, as we always want the best people in their respective fields who also bring a personal and cultural fit to our watch family. Once employees join us, we are happy to give back a lot. We have two great chefs preparing top restaurant quality meals every day for us, we have a personal trainer and a massage therapist. We work a lot, but we also like to celebrate our successes. Every evening there is someone on our rooftop terrace with a beer or a glass of wine. You can get a feeling for our work environment.
A second challenge might be the rapidly changing watch industry. The pre-owned market is being brought more and more into the focus of the brands. So there are now more players in the market and also more opportunities. Fortunately, we are in a very strong position and happily looking into the future.
During the past eight years, we built our business. Now we are in a position where we can not only expand our business but also help shape the online luxury watch industry. Decisions like – Do we let brands on our platform offering them a direct link to consumer sales? Which brands do we let on the platform? Do we offer a special concept to authorised dealers? How do we work with parallel market sellers? – allow us to play a much more relevant role today than we did in the past.
What are your plans for the next three years?
Our goal is to get even better in addressing the special needs of watch enthusiasts around the world. We therefore constantly improve our portal by adding features that matter.
We recently launched our own auction channel for special watches. Another interesting feature that will be released soon will help users imagine the size and fit of a watch on their wrist. All these efforts help us to make the user experience and the process of searching and finding beloved watches easier and more personalised for the user on our portal.
The long-term goal for us is getting to know every single watch enthusiast on the planet and getting in touch with him or her. We also want to know about every single luxury watch in the world, including those that are held by our users in their collection. In other words, we want to make Chrono24 feels like home for watch lovers and their collections.
We are often asked if we are considering an IPO. Today, we’d rather spend our time on growing our business and how to make our buyers and sellers happier, but we are starting to prepare for it in case it is an option in the future.
What are the key trends and perspectives for the watch market?
The pre-owned watch market is becoming more and more the focus of major brands, a segment that has been in our focus for more than 15 years now. The industry’s key players realise that trading in pre-owned watches helps them to sell new models to customers. Richemont’s acquisition of Watchfinder is the best proof of this trend.
The industry has also realised that the grey market is only a short-term healing of their challenges. People love discounts, but they love price stability and scarcity even more. Everybody wants to be the only person getting a discount. Once everybody gets a discount, it no longer feels like a discount. This is what the industry came to understand. We expect that in the upcoming years we will see less and less grey market offers. A healthy market, where supply and demand are in a good balance, is beneficial to all of us.
We also see that more and more brands are moving online. While some may think that this will take business away from us, we are expecting the opposite: more and more brands will be open to working with us in their direct-to-consumer sales.
How do you analyse the market?
We talk to a lot of people in the industry. During the early days of Chrono24, none of the brand CEOs really wanted to talk to us. Later, they were more and more open. Today we have constructive conversations with brand CEOs on an equal footing. It seems we are a respected player in the industry and we spend a lot of time in and around Geneva discussing the watch market and industry trends.
Regarding watches, we have a very deep understanding of the consumer and issues that are moving the market. Our team builds up a lot of intelligence helping our users to find the best watch since nobody can crawl through the entire offering. Questions like: Is there a shift from 42mm to 39mm in diameter? Is bi-colour making progress? How relevant is gold versus steel? If I’m interested in an Omega Speedmaster, what other model or brand could be relevant for me? How is buying behaviour different from Asia to the US? These questions are all being analysed by us to tailor-make the individual experience of our user and help him find that one beloved watch.
The potential of the secondary market is huge. Up until now, brands had not been doing a great deal about the secondary market but are beginning to want a piece of the action. How do you envision working with them?
We always knew that the potential of the pre-owned market was huge and we are happy to see that most brands are now following that path. We are in talks with many key players in the industry as they are aware of the secondary market’s potential now. I think the brands are aware of our strong experience in customer engagement and communication and secondly on how to run an online marketplace for premium watches successfully. Selling pre-owned watches is a very different business to manufacturing new ones. We bring a lot of expertise into this and are willing to help to get the right watch to the right person in order to make both sides happier than before.
What are your main tips for collectors?
Select what you truly like for the long term and would like to see on your wrist every day, buy it for a fair price from a trusted source. Then upload the watch in our digital watch collection feature and enjoy watching the value of your collection go up over time.
What will be your next personal watch acquisition?
Since I have a lot of international calls, I sometimes get lost in the different time zones. That’s why I just bought a pre-owned Jaeger-LeCoultre Memovox International, so I can always keep track of the time – but it has not been delivered, yet. And I am eagerly waiting for my Speedmaster Ultraman to be delivered. I really hope it will give me the superpowers like Ultraman – could be helpful in today’s fast-moving watch industry!