Openwork: Inside the Watch Industry

Episode 64: How Global Wealth Drives The Watch Industry – Millionaires Surge, Yet The Industry Slumps
Hosts: Asher Rapkin (A), Gabe Reilly (B)
Date: January 19, 2026

Episode Overview

This episode delves into how long-term trends in global wealth, particularly the explosive growth of millionaires, are reshaping (and sometimes failing to boost) the luxury watch industry. Hosts Asher and Gabe analyze data from the UBS Global Wealth Report as discussed in the Screwdown Crown newsletter, draw connections between wealth concentration and watch market performance, and discuss the implications across regions and generations. The conversation is frank, data-driven, and illustrated by personal anecdotes and industry insights.

Key Discussion Points & Insights

1. The “EMILY” Millionaires: Defining the Core Luxury Watch Market

Timestamp: 06:42 – 11:01

• EMILY: Acronym for individuals with $1 to $5 million in net worth.
  • 52 million people globally; 87% of all millionaires (06:48).
  • Control $107 trillion in assets.
  • Major concentrations: North America (43.2%), Western Europe (26.2%), Greater China (12.9%).
• Watch Market Sweet Spot:
  • The 1–5M net-worth range is where a $10,000–$50,000 luxury watch is an “additive” (not destructive) purchase (08:08).
  • Quote - A (08:15): "That is an extruded mass produced watch…hundreds or thousands of watches come out of the Omega factory on a daily basis. If you see growth in this segment of people who can afford to buy a $10,000 Speedmaster…that is a critical, critical group for growth."
• Drivers of Wealth Growth:
  • Real estate appreciation and aggressive stock market growth in places like US, Bay Area, Texas (09:49).
  • The “wealth effect”: Feeling richer (even without high liquidity) sparks discretionary luxury spending (10:07).
• Asset Composition:
  • US EMILYs are “asset paper rich;” stocks and real estate dominate, not cash (11:15).
  • Crypto remains nominal in portfolios, despite headlines (13:00).
• Watch Pricing & Access:
  • $50k+ watches require higher liquidity or special financing; $10k and under rely on credit or cash-on-hand (14:40).

2. Growth of Wealth Outpaces the Watch Industry

Timestamp: 15:13 – 17:31

• While the global population of millionaires surges, the luxury watch market is not matching that growth.
  • “Contradicting fact”: Industry is underperforming relative to the millionaire population boom (16:01).
  • Signals potential for growth, but also the industry’s struggle to convert wealth into watch sales.

3. Geographic Breakdown: Where the Millionaires (and Watches) Are

Timestamp: 17:31 – 27:54

• North America:
  • 23.8 million millionaires, almost 40% of global total (17:54).
  • 6.8–6.9% of the US population are millionaires (18:21).
  • Fastest-growing millionaire segment globally (12% increase in 2024) (18:53).
  • Addresses the “wealth mirage”: the real addressable luxury buyer audience is ~30 million, not 348 million (19:43).
  • Quote – A (20:10): "We're really talking about here is like 30 million people within the United States that are the addressable audience for $10,000 and up watches."
• Greater China:
  • Growth of millionaires is slowing—3.4% in 2024 vs historic double digits (22:00).
  • Swiss watch exports to China down 25%.
• India:
  • Massive population but only about 1 million millionaires (< 0.1% of population) (23:49).
  • Tremendous headroom, but currently a tiny addressable audience.
• Other Regions:
  • Eastern Europe growing at 12% (small, fragmented markets).
  • Middle East: 5.8% millionaire growth, but smaller populations.
  • Western Europe: only region losing millionaires (-1.5%) (27:00).
  • Quote – B (27:54): “There are structural wealth drivers and economic drivers that underpin all of this stuff and put it into focus.”

4. The Network & Inequality Effects: Why Luxury Is Also Social

Timestamp: 27:54 – 36:11

• Luxury as Status Signaling:
  • Spending on luxury is driven by both wealth and inequality—status becomes more important in environments with wide pay gaps.
  • Anecdote – A (28:21): "I remember seeing that [Gold Yacht Master] and there was an effect and an impact on me…there was an outward projection…it felt like I had achieved something."
• Corporate Culture as a Microcosm:
  • Observation: More hierarchical or unequal environments see higher “luxury contagion” across levels.
  • Quote – B (31:02): "The more inequality there was in a workplace…the more luxury spending there is across all income levels."
  • In cities with extreme wealth concentration (Hong Kong, NYC, LA, Singapore): more luxury consumption, even among less wealthy.
• Retail Strategy:
  • Brands prioritize stores in cities with dense wealth concentrations, not just largest populations (36:11).
  • Quote – A (36:51): “You might say the greater Miami area is a huge city…but there are bigger cities in the US that don't have the level of attention that Miami gets. There’s only so many watches, so you do have to close some doors.”

5. Generational Wealth Transfer and the Future of Luxury Spending

Timestamp: 38:03 – 46:13

• Boomers and Beyond:
  • $74 trillion expected to transfer between generations in 20–25 years; $9 trillion to spouses first (39:00).
  • Cash/“liquidity events” drive spending sprees, but older generations may spend less on material goods (41:59).
  • Quote – B (41:11): “So many people are trying to accumulate as much wealth as possible and pass it on…The idea is: wealth is a tool. Use it to live your fullest life.”
• Millennials & Gen Z:
  • Typically favor experiences over material goods today, but this likely reflects current (lower) earning power.
  • Gen Z is more likely to buy watches preowned—likely due to necessity, likely to change as they age and accumulate wealth (44:00).
  • Overall: Watch demand might shift but isn’t disappearing; future generations may value watches differently.

Notable Quotes & Memorable Moments

• On the “wealth mirage”:
  • A (19:43): “The segment of the audience that they’re speaking to is not 348 million people.”
• On India’s market ‘headroom’:
  • A (25:51): "It's a massive market with a minuscule addressable audience."
• On status signaling in the workplace:
  • A (28:46): "When I got my very, very, very first Rolex...I remember what it felt like...I was pushing that message out."
  • B (32:38): "Luxury spending isn't just driven by wealth; there's almost this turbocharger, which is the greater inequality of wealth you have, the more luxury consumption you see."
• On retail consolidations:
  • A (36:11): "That helped me understand why Patek closed doors in the United States...to consolidate inventory across a smaller number of doors in strategically identified DMAs."
• On generational wealth and spending:
  • B (41:11): "Wealth is a tool. Use it to live your fullest life."
• On the difference between mass vs. indie luxury markets:
  • A (45:17): "I do think the motivations behind a David Kando buyer versus a grand comp Patek purchaser are not the same thing. It is a very different and very small, relatively speaking, sub segment."
• On industry strategy:
  • B (46:13): "Maybe the answer... is not to make a better watch, not to be more creative or take more risk. Maybe... you need a better ad campaign."

Key Segment Timestamps

• EMILY millionaires and market stats: 06:42 – 11:01
• Wealth effect and spending psychology: 10:07 – 14:40
• Global millionaire growth vs. watch market: 15:13 – 17:31
• Regional breakdowns (US, China, India, etc.): 17:31 – 27:54
• Workplace/status spending dynamics: 27:54 – 36:11
• Retail/brand strategy & market focus: 36:11 – 38:03
• Generational wealth transfer: 38:03 – 46:13
• Conclusions & takeaways: 46:13 – 47:50

Flow Summary

The episode intertwines global financial analyses with stories from tech, retail, and personal experience—always returning to data, but never dry. It challenges inflated industry optimism (“wealth mirage”), draws out social drivers behind luxury consumption, and unpacks changing regional fortunes. The tone is candid, sometimes lightly irreverent, but always anchored in real research and first-hand knowledge.

Recommended for: Watch industry professionals, collectors, economic observers, and anyone curious about how macro trends shape the seemingly insular world of luxury watches.