As a young, avid collector of luxury watches, Austen Chu said he was scammed “many times” when he bought timepieces from the secondary watch market.
“Once, I bought a watch which had a dented dial and the seller told me that the dial got dented during shipping,” Chu recalled. And he believed it.
But now, the 26-year-old says he knows better.
“I know that’s definitely bullsh*t … it was dented beforehand,” he told CNBC Make It.
“If I wasn’t so crazy about watches, I probably would have left the space after getting scammed the first time.”
Not only did his obsession with watches help him overcome those bad purchases, the experiences also propelled him to start his own consignment-based platform for luxury watches, Wristcheck.
The website boasts an inventory of timepieces worth $80 million, all of which have been authenticated by in-house watchmakers, said Chu.
Started in 2020, the startup recently bagged $8 million in a funding round led by Gobi Partners, a Chinese venture capital firm that manages Alibaba‘s Hong Kong Entrepreneurs Fund and the AEF Greater Bay Area fund.
Chu shared with CNBC Make It about how he turned a hobby into a money-making business.
Rejecting ‘buy low, sell high’
When it comes to starting a successful business, Chu’s philosophy is simple: Start a business to solve a problem, he said.
The gap that Wristcheck fills has always been “very clear,” Chu said.
“The business model of the traditional secondhand watch market is very … normally it’s ‘buy low, sell high,'” Chu explained, adding that sellers were usually getting the short end of the stick.
“How is that right? You’re hoping to get good advice from someone who is a professional, but if you know nothing, they end up low balling you even more.”
The luxury watch market is what he calls a “dinosaur industry” that can be “intimidating” for the younger generation to get into, Chu said.
In 2021, Wristcheck opened its first flagship store in Hong Kong — where consumers can have access to a curated range of pre-owned watches.
Wristcheck
By starting Wristcheck, Chu hoped to provide more transparency and accessibility to his peers.
“It’s something that I wish I had. We are trying to come up with a tech solution … that allows the next generation to become more interested in the [watch] space in a safe way,” he added.
For one, transaction fees are lower. Auction houses typically charge 26% from a buyer up to 12% from the seller, he said.
In contrast, Wristcheck makes a fixed rate of 8% from the seller and 4% from the buyer — but still allows users to bid for watches they desire to own.
A new generation of watch-lovers
“You know when you love something so much, you’re also thinking about it subconsciously when you’re asleep?”
That’s how Chu describes his infatuation for watches, which started when he was a child — and only got deeper in his teens.
“I was 15, I fell into the rabbit hole of researching, spending every waking second basically reading online and learning about watches,” he shared.
“Obviously there’s no courses in university or in high school that teaches you anything about this stuff, so it had to be self-taught.”
Chu disagrees with the popular belief that collecting fine watches is a hobby for older folks. In fact, he insists the younger generation has more “wrist awareness” now — thanks to the introduction of Apple Watch.
In our day and age, everything is kind of temporary. But with a watch it’s something that can kind of last forever, it’s something you can actually pass on to your kids.
Austen Chu
Co-founder and CEO, Wristcheck
“That was a big turning point … It suddenly went from the lecture hall having maybe 10% of the class wearing something on their wrist to like over 50% all of a sudden,” he said.
“That was a moment that told me: ‘OK, watches are going to be cool for my generation.'”
Chu’s hunch was right. After all, Gen Z is projected to make up a third of the luxury market by 2030, due to a surge in wealth creation and the influence of social media.
Wristcheck is attracting a tech-savvy, youthful crowd, said Chu, and 43% of its paying customers are under the age of 30.
“In our day and age, everything is kind of temporary. But with a watch it’s something that can kind of last forever. It’s something you can actually pass on to your kids,” Chu added.
“I think that’s something that also resonates with our generation.”
Let passion drive you
Chu co-founded Wristcheck during the Covid-19 pandemic, which was a leap of faith that appears to have paid off so far.
The startup said it’s experienced “75% year-on-year growth” in its total value of consigned watches, and claims to have been profitable in its first year. Chu did not share the figures when pressed.
Austen Chu (left) with his co-founder Sean Wong.
Wristcheck
Source: CNBC