This document provides a preview of Digital Luxury Group's 2013 Haute Horlogerie report. The preview analyzes search data and social media metrics for 18 luxury watch brands from January to September 2012. Key findings include Patek Philippe leading the segment and strong growth in searches from China, Russia, Brazil and other emerging markets. The full 2013 report will analyze over 60 brands and be released in April at the Baselworld trade show.

1. 2013
!
The Leading Market Research in the Luxury Watch Industry!
Since 2004!
!
HAUTE HORLOGERIE PREVIEW
JANUARY 2013
© Digital Luxury Group, DLG SA, 2013

2. The Leading Market Research in the Luxury Watch Industry. Since 2004.
2013 HAUTE HORLOGERIE PREVIEW .
§ 9th Edition
§ 18 Haute Horlogerie Brands
§ 20 Markets, including BRIC
§ 1 billion searches analyzed using DLG’s
proprietary semantic analysis technology
DemandTracker™ (see Appendix)
2013
§ Published in partnership with Europa Star Haute Horlogerie Preview
and the gracious support of the Fondation
de la Haute Horlogerie
§ Full version of report, covering 60+ brands,
available in April at the time of Baselworld
© Digital Luxury Group, DLG SA, 2013
2

3. The Leading Market Research in the Luxury Watch Industry. Since 2004.
18 HAUTE HORLOGERIE BRANDS STUDIED .
Note: Other brands exhibiting at the Salon International de la Haute Horlogerie such as Cartier,
IWC, Panerai, and Piaget, have not been analyzed in this year’s preview research after a revised
brand segmentation, the results of which will be released in April at the time of Baselworld.
See Appendix for more information.
© Digital Luxury Group, DLG SA, 2013
3

4. The Leading Market Research in the Luxury Watch Industry. Since 2004.
20 GLOBAL MARKETS ANALYZED .
© Digital Luxury Group, DLG SA, 2013
4

5. The Leading Market Research in the Luxury Watch Industry. Since 2004.
8 Key Insights About the Haute Horlogerie Market in 2012
© Digital Luxury Group, DLG SA, 2013
5

6. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Geographic Search Breakdown for Haute Horlogerie by Market
[Year-over-Year]
Russia: 9.4%
[+42.9%]
Germany: 10.4%
[+6.5%]
United Kingdom: 6.1%
[+1.2%]
Japan: 4.8%
[-11.7%]
United States: 15.6% France: 6.5%
[-10.6%] [+6.9%] Qatar: 0.1%
Spain: 1.8% [-41.0%] China: 31.3%
[-4.3%] [+26.8%]
Mexico: 0.7%
[-2.9%] Switzerland: 2.7% Taiwan: 0.7%
[+22.2%]
[+6.1%]
India: 1.2%
Italy: 4.1% [+17.5%]
Hong Kong : 1.0%
[-8.2%] [+4.3%]
Saudi Arabia: 0.2%
[-10.2%]
Thailand: 1.0%
Brazil: 1.2% [-10.2%]
[+30.3%]
Singapore: 1.1%
United Arab Emirates: 0.3% [-3.2%]
[+3.6%]
Jan – Sept 2012
§ Interest for Haute Horlogerie continues to grow (+7% globally year-over-year)
§ BRIC + Asian markets represent nearly 50% of the Haute Horlogerie global brand
interest
© Digital Luxury Group, DLG SA, 2013
6

7. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Haute Horlogerie Search Market Share and Growth Rate in 2012
55%
45%
Russia
35%
Brazil
China
Y/Y Growth Rate
25%
India
15%
France
Switzerland
Germany
5%
U.K.
Spain
0%
5%
10%
15%
20%
25%
30%
35%
-­‐5%
Italy Japan U.S.A.
-­‐15%
2012 Global Search Market Share Jan – Sept 2012
-­‐25%
§ BRIC markets record the highest growth rates (Brazil +30%, Russia +43%, India +18%)
§ Mainland China on its own compromises 31%, increasing by 27% vs. 2011
§ Domestic demand in the US (-­‐‑11%) and Japan (-­‐‑12%) declining for the first time since
the study’s publication
© Digital Luxury Group, DLG SA, 2013
7

8. The Leading Market Research in the Luxury Watch Industry. Since 2004.
The Most Popular Haute Horlogerie brands in 2012
25.0% 23.6%
20.0%
Haute Horlogerie Search Market Share
15.0%
12.7% 12.6%
10.0% 9.2%
7.7%
6.5%
5.9%
5.0% 4.3% 4.0%
3.8%
2.6% 2.2%
1.4% 1.2% 1.0% 0.8% 0.6%
0.2%
0.0%
Jan – Sept 2012
§ Patek Philippe leads the Haute Horlogerie segment, by a landslide
© Digital Luxury Group, DLG SA, 2013
8

9. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Growth Rates of Haute Horlogerie Brands in 2012 vs. 2011
Richard Mille +61.0%
Vacheron Constantin +26.0%
Patek Philippe +10.2%
A. Lange & Söhne +8.3%
Ulysse Nardin +8.0%
Breguet +7.9%
Blancpain +7.9%
Average +7.1%
Jaquet Droz +4.8%
Jaeger-LeCoultre -0.5%
Audemars Piguet -1.9%
Roger Dubuis -3.5%
Franck Muller -8.0%
Girard-Perregaux -10.6%
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Y/Y Evolution of Global Brand Interest Jan – Sept 2012
§ Richard Mille is the fastest growing Haute Horlogerie brand
© Digital Luxury Group, DLG SA, 2013
9

10. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Top 10 Most Sought-After Haute Horlogerie Collections in 2012
2012 2011  Brand Models Total #1 Haute Horlogerie Model
1 1 = Audemars Piguet Royal Oak 13.50% [13.5% market share]
2 2 = Jaeger-LeCoultre Reverso 9.26%
3 3 = Audemars Piguet Royal Oak Offshore 5.10%
4 4 = Patek Philippe Calatrava 4.49%
5 6 æ Blancpain Leman 4.43%
6 5 è Patek Philippe Nautilus 4.25%
7 7 = Franck Muller Long Island 3.69%
Vacheron
8 9 æ Overseas 2.25%
Constantin
9 14 æ Girard-Perregaux 1966 2.09%
10 8 è Jaeger-LeCoultre Master Compressor 1.99%
SUB-TOTAL 51.04%
OTHERS 48.96%
Royal Oak
TOTAL 100.00% Audemars Piguet
Jan – Sept 2012
§ Audemars Piguet’s Royal Oak reinforces its leadership as the #1 Haute Horlogerie
model
© Digital Luxury Group, DLG SA, 2013
10

11. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Global Haute Horlogerie Watch Preferences Differ
Japan’s #1 China’s #1 Russia’s #1
[17.8% market share] [30.1% market share] [22.1% market share]
1945 Overseas Leman
Girard-Perregaux Vacheron Constantin Blancpain
Jan – Sept 2012
§ Local preferences arise, stressing a distinct discrepancy in the Haute Horlogerie
inclinations of clients around the world
© Digital Luxury Group, DLG SA, 2013
11

12. The Leading Market Research in the Luxury Watch Industry. Since 2004.
The Growing Impact of Social Media
[Benchmarking Facebook Community Size & Post Engagement Rate for Haute Horlogerie Brands]
3.00%
2.50%
A. Lange & Sohne
Jaquet Droz
2.00%
Franck Muller
Ulysse Nardin
Engagement Rate
1.50%
Vacheron Constantin
Average
(Jan-Dec 2012)
Breguet Engagement
1.00% Rate: 1.17%
Richard Mille
De Bethune Girard-Perregaux Audemars Piguet
Blancpain
0.50%
Greubel Forsey Roger Dubuis Jaeger-LeCoultre
0.00%
0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000
Number of Facebook Fans
(at end of Dec 2012) Jan – Dec 2012
§ Facebook confirmed as a strategic communication channel, 670k total fans, up 127% vs. 2011
§ Improved brand social efforts in 2012 as average engagement rate increases to 1.17% vs. 0.8% in
2011
© Digital Luxury Group, DLG SA, 2013
12

13. The Leading Market Research in the Luxury Watch Industry. Since 2004.
Online Watch Forums Grow in Importance
[Top 10 Most Popular Haute Horlogerie Brands on Selected Watch Forums]
10000000
PuristSPro
Purist Pro Time Zone iWatch 365
Number of Brand Post Views
8000000
6000000
Jan – Dec 2012
4000000
2000000
0
+40.4%
+297.0%
+54.3%
+18.8%
+9.4%
+64.9%
-­‐‑47.1%
-­‐‑46.8%
+60.6%
-­‐‑46.2%
Jan – Dec 2012
§ 41 million total brand post views, up 29% from 2011
§
Watch forums become strategic online destinations for collectors and aficionados
§ Patek Philippe, Jaeger-­‐‑LeCoultre and A. Lange & Söhne shine in forum popularity
© Digital Luxury Group, DLG SA, 2013
13

14. The Leading Market Research in the Luxury Watch Industry. Since 2004.
WHO ARE WE?
About Digital Luxury Group
Digital Luxury Group (DLG) is the first international company to conduct luxury
industry market intelligence and use this strategic viewpoint to create and implement
unique digital marketing and communication strategies for luxury brands. Since 2004,
DLG has been publishing the WorldWatchReport™ a baseline market study for the
watchmaking industry in partnership with Europa Star and with the precious support of
the Fondation de la Haute Horlogerie.
Contact:
Tamar KOIFMAN
Head of Marketing
+41 22 702 07 60
tkoifman@digital-luxury.com
Florent BONDOUX
Head of Strategy & Intelligence
+41 22 702 07 60
Visit our website to get detailed information: fbondoux@digital-luxury.com
www.worldwatchreport.com or www.digital-luxury.com
© Digital Luxury Group, DLG SA, 2013
14

15. The Leading Market Research in the Luxury Watch Industry. Since 2004.
METHODOLOGY .
Search Queries
Extracted from search engines, the search queries collected in the WorldWatchReport™ encompass a large semantic field of 17k+ keywords
related to the brands including synonyms, plurals and misspellings.
Languages
Search queries are tracked in all major languages according to each key market: Portuguese, Russian, simplified and traditional Chinese,
Taiwanese, Japanese, French, Italian, Spanish, German, Thai and Arabic.
Search Engines
Based on Google, Bing, Yandex in Russia and Baidu in China, the WorldWatchReport ™ covers an average of 85% search market share globally.
Data Collection and Analysis
Public and professional tools are used to automate search volume collection, thanks to Digital Luxury Group’s strong partnerships with search
engines. Once collected, this data is filtered, analyzed and translated into 14 intentions (brands, models, replicas, etc.) using exclusive Digital
Luxury Group’s proprietary semantic analysis technology.
Brand Grouping
Thanks to the contribution and feedback from several watchmaking industry experts from the media, brands and retailers, the following criteria
have been taken into consideration to define 5 coherent watch brand categories:
- Brand positioning (market and target audience)
- Offer (average entry price of key collections)
- Volume (similar volume of online demand)
- Competitive environment
Harmonization
As multi products brands, such as Cartier, Chopard or Bulgari, may generate significantly more search volume than watch-only brands, data is
harmonized to identify watch-only demand and exclude demand for other products (for ex. “Cartier jewelry”, “Tag Heuer mobile phone”, etc.).
Similar corrections have been made for brands whose names could be associated with other products, such as Montblanc, Omega or Zenith.
Social Media engagement rate
The engagement rate is a qualitative indicator measuring the level of interactivity between a brand and its community on each Social Media
platform. Its calculation is based on the average number of feedback (“Likes” and “Comments”) per individual post published by the brand
(“Status Updates”), divided by the number of Fans on date of publication.
Brand Forums
Popularity on Forums is a quantitative measurement calculated as the total number of views of each post published on the dedicated sections of
brands in TimeZone, PuristsPro and iWatch365 from January 1st to Dec 31st, 2012.
© Digital Luxury Group, DLG SA, 2013
15