Austen Chu, a young and enthusiastic luxury watch collector, claimed that he had been “many times” the victim of fraud when purchasing timepieces from the secondary watch market.
Chu said, “I once purchased a watch with a dented dial, and the seller informed me that the dial was dented during shipping. And he had faith in it.”
The 26-year-old claims he now knows better, though.
“I am aware that is absolute bullsh*t. It was already dented,” he said to CNBC Make It.
If I hadn’t been so obsessed with watches, I probably would have left the area after being conned once.
Not only did his watch addiction help him recover from those poor acquisitions, but the incidents also inspired him to found Wristcheck, his own luxury watch consignment website.
According to Chu, the website boasts a collection of watches worth $80 million that have all undergone verification by in-house watchmakers.
The 2020-founded startup recently received $8 million in a funding round run by Gobi Partners, a Chinese venture capital firm that also manages Alibaba’s Hong Kong Entrepreneurs Fund and the AEF Greater Bay Area Fund.
Chu explained to CNBC Make It how he transformed a pastime into a lucrative 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 simple. Normally, it’s ‘buy low, sell high,’” Chu explained, adding that sellers are 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 lowballing 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.
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 the buyer and up to 12% from the seller, he said.
In contrast, Wristcheck charges 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 reading online and learning about watches,” he shared.
“Obviously, there are no courses in university or high school that teach 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. He insists the younger generation has more “wrist awareness” now, thanks to the introduction of the Apple Watch.
“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 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 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.
Looking back, Chu said he was “lucky enough” to discover his passion at a young age.
“If you do find something that excites you and allows you to burn the midnight oil without even feeling like you are, dedicate 110% of your time to it—put all your eggs in one basket,” he advised.
“You’re either in it or you’re not.”
