2020 has been a turbulent year for most businesses, but e-commerce has been thriving in many sectors. Now, while the online watch market did have its ups and downs, there is an interesting trend taking hold in the business world today that is starting to affect it. That is the one of microacquisitions. Generally, when we think of corporate takeovers, we think…well corporate takeovers - large companies worth hundreds of millions or billions buying one another for strategic gain. In the watch market, we often see a smaller version of this play out – think Analog/Shift Watches of Switzerland. Increasingly, however, coinciding with the rise of the online watch market, we are seeing acquisitions of even smaller operations take place.
Outside of the watch world the concept of buying blogs, social media pages, and other similar forms of small digital businesses is not as novel. There are tons of videos on Youtube where people describe their process of going through and buying a small blog or online business and even guides for sales online. There are also several marketplaces for buying and selling relatively small digital-friendly businesses and otherwise.
Microacquistions are also not limited to small companies buying smaller companies, large companies also acquire smaller ones, like Pinterest acquiring Hike Labs back in 2015. While in the startup world the reasons for acquiring a small business can be a bit more wide ranging (technology, talent etc.). In the watch world, the reasons one would buy a website, social media page, or similar small business funnel down to assimilating their brand/audience into one’s existing operation. This comes in many forms, for example, SEO.
NOMOS Ludwig 38 date ref. 231
Thinking about what is actually ‘acquired’ when buying a traditional watch retailer or dealer business, one would effectively buy their store - which isn’t the case here - or their stock. Otherwise the aim would be to ‘acquire’ their clientele or supplier relationships. In this case when acquiring a website a different way of viewing the store would be the URL - which may already receive thousands or tens of thousands of hits per month. Certain URLs also rank very highly for different search terms or engines like Google or Bing. Bob’s Watches, for example, ranks highly for ‘vintage Rolex’. A very lucrative search term as one can imagine. This is effectively like owning large farmland in an area ripe for suburban development. It’s like internet real estate. So, for a new business or for one entering a new market, an easy way to get a foothold and get a few thousands organic hits per month can be to buy a blog that ranks highly in that niche. This may be beneficial in the face of the cost or difficulty of building up a high-ranking URL, especially in such a highly competitive environment.
This is similar to acquiring an Instagram or Facebook page with thousands of followers and a high level of engagement. One may acquire a page and start sharing their product on the existing, larger platform or vice-versa, sharing the original product or service to the new page’s fanbase.
As the wide variety of new, small watch businesses takes form on the internet, one can imagine how there has been ample opportunity for this to take shape. One relatively successful new online watch trader may buy out another one for their access to either supply or demand in a particular brand or geography. They may want followers interested in Rolex, as their own customer base is more interested in Omega or Seiko. Or other brands altogether. Perhaps they want customers in the Middle-East or East Asia. There are ample reasons and avenues for inorganic growth for those with a bit of cash. This does not only happen at the level of tens or hundreds of millions, but rather also at the ‘micro’ scale – tens of thousands.
Les Linder adjusting a railroad watch movement / Credit: ElginWatches.org
To an extent, this has always happened in the watch business. Watch retailers or repair shops have always been bought and sold in between friends and family. I can think of some friends in Milan who have, at one time or another thought of selling their watch stores. Others who inherited it from a mentor or family member. These sorts of ‘microacquisitions’ have been commonplace.
Now, however, people are not selling physical stores but social media pages. Moreover, online businesses are being listed for sale on venues such as Facebook.
One current example of microacquisitions reaching the watch industry comes from our friends VintageMasters, who have recently been through their own microacquisition in acquiring Tijdloos Uurwerken, another online dealer also based in the Netherlands. Stan along with his new partner took over Tijdloos in late 2020 and have since started managing their website, social media, and existing inventory with the aim of expanding their own customer base that previously focused on vintage Omega with VintageMasters.
Omega Seamaster Chronostop ref. 145.008, currently available from VintageMasters on Montres Publiques Market here.
As the ever-fragmented online watch market continues to grow, I’m sure transactions like this will become evermore commonplace and many smaller operators or hobbyists will be consolidated into larger, growing operations. This may be both good and bad for the average collector, it’s natural that prices push upwards for something like vintage watches - this process may also be accelerated by factors such as consolidation. On the other hand, as we become more connected, we gain better access to more vintage watches - and perhaps getting closer to other markets could help bring prices down. Regardless of the outcome, this is certainly not the last time we hear of this phenomenon in our beloved industry.
By: Andres Ibarguen
A vintage Tissot Seastar Automatic ref. A550-X on its original bracelet, available for sale here.
Read more:
Novet, Jordan. “Pinterest acquires the two people behind mobile blogging startup Hike Labs.” Venture Beat, April 3rd, 2015, https://venturebeat.com/2015/04/03/pinterest-acquires-the-two-people-behind-mobile-blogging-startup-hike-labs/.