- The rise of electronic watches in the mid-1970s
The advent of electronic timepiece marked a major revolution in the watch industry. Electronic watches became popular in the US in the mid-1970s, and were subsequently evolved into electronic quartz analog timepieces. While most watches were equipped with“three keys and one crown”, electronic watches needed four push buttons and also had to be water resistant and dial printed. At this time, watch and clock manufacturers in Hong Kong had not yet developed such technologies. As Leung Lung Kee had mastered the electronic watch category quite early, and Leung Wai Ho was also familiar with the purchase price of complete watches, the electronic watch business generated huge profits for Leung Lung Kee. Back then, each electronic watch button could be sold at US$4 (its value today is just $0.5!), while single electronic watch cases could fetch prices of US$14. Watch crown and silk- screen factories were also making sizeable profits. Other local watch case factories did everything possible to follow Leung Lung Kee’s example in developing the electronic market. Between 1974 and 1977, every local manufacturer producing electronic watch cases made a healthy profit. For this reason, 1974 to 1982/83 were peak years for the local watch industry.
- The decline of electronic watches in the early 1980s
The Hong Kong watch industry mainly produced Roskopf movement watches in its early years. From the 1970s onwards, such movements began to decline in popularity as electronic digital watches became readily available across the massive US and Japanese markets. The new generation watches were very fashionable and had many functions. Some manufacturers invested in the electronic movement business and switched to electronic toys after making early profits. Many other local electronics manufacturers rushed to produce silicon chips, importing some chips from Japan and then processing them here in Hong Kong.
Electronic watches’ rise and decline were extraordinarily quick. Sadly, the excessive production of electronic movements and watches in the mid-1980s pushed prices down and eventually made production unprofitable. The fact that manufacturers in the Territory did not attach much importance to quality control also meant many locally produced electronic watches were simply not satisfactory to buyers and wearers. With consumers losing their confidence, electronic watches started to fall out of favour. The main beneficiaries of the electronic watch boom were Casio and ODM. Casio specialised in electronic watches made from high quality chips and cables whose quality was assured and so dominated the market between the 1980s and 1990s. In 1981/82, Japan and Switzerland co-operated in launching quartz analog watches. Such timepieces were popular due to their accuracy and subsequently become very hugely successful mainstream buys. While Dailywin had invested in the production of electronic watch cases, Leung Wai Ho later found that sale of electronic watches was not satisfactory. As a result, he adopted what he felt was a safer strategy and began specialising in quartz analog watches.
- Relationships between different types of watch manufacturers
There was a clear division of labour in Hong Kong’s watch industry in the early days, with watch case and band manufacturers not producing peripheral products. For example, watch case factories would purchase mold bases for their cases from other suppliers. Complete watch manufacturers on the other hand engaged in total assembly and would buy in watch cases, crowns, bands and glass dials. While cross-process production is common nowadays, Dailywin was rare in that it produced watch bands and engaged in electroplating at the same time. There were several other large and small watch accessories factories within the local watch industry.
Among watch case factories, Leung Lung Kee was considered a large production facility, whereas most others in the trade were small concerns. As manufacturers involved in the same process in the 1970s tended not to contact each other, outsourcing and sub-contracting were not common. That said, late in the decade, Leung Lung Kee did once sub-contract processes such as pitting and grinding. In the early years, Dailywin received orders from many of Leung Lung Kee’s customers. Some were subsequently outsourced to “friendly” factories to produce complete watches. In the late 1970s, many wage-earners set up small processing plants in order to improve their living standards, thus creating outsourcing and sub-contracting operational modes. Many small factories started business in this way.
- Dominance of quartz analog watches in the 1980s
After the electronic watch boom of the mid-1980s, quartz analog watches gradually became the mainstream and watch case manufacturers’ development once again stabilised. As sales of electronic timepieces declined, many watch case factories were hit with bad debts. After manufacturers turned their attentions towards quartz watches, their equipment grew more advanced and their business more standardised. Local factories learned much from the management modes and technologies of Casio. While the production of quartz analog watches was similar to that of mechanical timepieces, quartz analog products’ waterproof functions and level of accuracy were far superior.