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EXTRACTS Preview

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Table of content <ul><li>1. A Market Study Like no Other page 2 </li></ul><ul><ul><ul><li>The WorldWatchReport in a Nutshell </li></ul></ul></ul><ul><ul><ul><li>Benefits and Enhancements of the 5 th Edition </li></ul></ul></ul><ul><ul><ul><li>Brands & Categories </li></ul></ul></ul><ul><ul><ul><li>Methodology </li></ul></ul></ul><ul><li>2. Market Share page 9 </li></ul><ul><ul><ul><li>Global Internet Penetration </li></ul></ul></ul><ul><ul><ul><li>Global Geographic Search Origin </li></ul></ul></ul><ul><ul><ul><li>Geographic Search Origin from the BRIC </li></ul></ul></ul><ul><ul><ul><li>Category Searches by Region </li></ul></ul></ul><ul><ul><ul><li>Global Brand Market Share by Category </li></ul></ul></ul><ul><ul><ul><li>Brand Market Share in the BRIC </li></ul></ul></ul><ul><ul><li>3. Consumer Behaviors page 27 </li></ul></ul><ul><ul><ul><li>Search Intentions by Market </li></ul></ul></ul><ul><ul><ul><li>Search Intentions by Brand </li></ul></ul></ul><ul><ul><li>4. Model-specific Demand page 34 </li></ul></ul><ul><ul><ul><li>Top 30 Most Searched Models </li></ul></ul></ul><ul><ul><li>5. Brand Ambassadors page 38 </li></ul></ul><ul><ul><ul><li>Global Top 30 Most Searched Ambassadors </li></ul></ul></ul><ul><ul><ul><li>Share of Ambassador Searches by Brand </li></ul></ul></ul><ul><ul><ul><li>Breakdown by Activity of the most Searched Ambassadors </li></ul></ul></ul>DECIPHERING THE GLOBAL DEMAND <ul><ul><li>6. Distribution Channels page 46 </li></ul></ul><ul><ul><ul><li>Genuine products </li></ul></ul></ul><ul><ul><ul><li>Share of Distribution Searches by Region </li></ul></ul></ul><ul><ul><ul><li>Regional Distribution Search Breakdown </li></ul></ul></ul><ul><ul><ul><li>Replica </li></ul></ul></ul><ul><ul><ul><li>Share of Replica Searches by Country </li></ul></ul></ul><ul><ul><ul><li>Regional Replica Search Breakdown </li></ul></ul></ul><ul><ul><li>7. Social Media Impact page 59 </li></ul></ul><ul><ul><ul><li>Facebook </li></ul></ul></ul><ul><ul><ul><li>Introducing Facebook </li></ul></ul></ul><ul><ul><ul><li>Ranking of Brand Fan Pages </li></ul></ul></ul><ul><ul><ul><li> </li></ul></ul></ul><ul><ul><ul><li>YouTube </li></ul></ul></ul><ul><ul><ul><li>Introducing YouTube </li></ul></ul></ul><ul><ul><ul><li>Top 30 Most Viewed Videos on YouTube </li></ul></ul></ul><ul><ul><ul><li>The Most Popular Brands on YouTube </li></ul></ul></ul><ul><ul><ul><li>The Origin of Watch Brands Videos Content </li></ul></ul></ul><ul><ul><ul><li>The Subject of Watch Brands Videos Content </li></ul></ul></ul>

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The WorldWatchReport in a nutshell The WorldWatchReport (WWR) provides the luxury watch industry with exclusive analysis regarding its brands and models. The WWR is based on over 500 million search queries entered into search engines. Ex: Once collected, this data is analyzed and categorized into 9 intentions (ex: brands, models, replicas, etc.) with the help of exclusive IC-Agency technology.

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In the Press

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Benefits and Enhancements of the 6 th edition BENEFITS The WorldWatchReport helps you to: • Discover the strong and weak points of the different brands • Better define expectations of prospective buyers by market • Get a reference of brand exposure with respect to all other brands • Have a global overview of competitive positioning: by markets, brand categories, models and ambassadors • Benefit from strategic information, allowing companies to anticipate evolving trends relating to marketing strategies and the economic environment ENHANCEMENTS • BRIC markets are now included (Brazil, Russia, India, China) • Additional contributions from opinion leaders of the industry • Social Media impact is measured through historical data (Facebook and Youtube)

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Brands and Categories 10 KEY EXPORT MARKETS 25 TOP LUXURY WATCH BRANDS Haute Horlogerie: Audemars Piguet, Blancpain, Breguet, Franck Muller, Girard-Perregaux, IWC, Jaeger-LeCoultre, Patek Philippe, Vacheron Constantin, Zenith Women’s / Jewelry: Bulgari, Cartier, Chopard, Piaget Prestige: Breitling, Hublot, Omega, Rolex, TAG Heuer High Range: Baume & Mercier, Ebel, Longines, Montblanc, Raymond Weil, Rado

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Methodology COLLECTING DATA Search Queries Entered into search engines, the search queries collected in the WorldWatchReport encompass a large semantic field related to the brands and include synonyms, plurals and misspells. Languages A part of these search queries is in English whereas the other part is translated into each key market language : simplified Chinese, Russian, Portuguese, Hindi, Japanese, English, German, French and Italian. Search Engines Based on Google, Yahoo! and MSN – as well as Yandex in Russia - the WorldWatchReport covers more than 90% of overall Internet searches in the UK, Japan, the US, Italy, France, Germany, India and Russia. In China alone, these major search engines have a penetration rate of 35.6%. (Analysys, January 2010). Data Collection and Analysis Public and professional tools are used to automate search volumes collection, thanks to IC-Agency’s strong partnerships with search engines. Once collected, this data is filtered analyzed and translated into 9 intentions (brands, models, replicas, etc.) with the help of exclusive IC-Agency technology. Harmonization As multi-products brands, such as Cartier, Chopard or Bulgari, generate significantly more search volume than watch-only brands, data is harmonized to identify watch-only demand and excluding demand for other products (for ex. Jewelry, mobile phones, etc.). Similar corrections have been made for brands whose names could be mingled with other products, such as Montblanc and Omega.

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Methodology TRANSLATING SEARCH QUERIES INTO CONSUMER INTENTIONS For each brand, data collected is automatically translated into search intentions: Example of search queries Translated search Intentions « piaget » Brand « ballon bleu cartier » Model « fake rolex » Replica « chopard retailer » Distribution « breguet bracelet » Accessory « blancpain second hand » Preowned « raymond weil price » Price « hublot replacement » Repair « breitling homepage » Others

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<ul><li>GROUPING 25 BRANDS IN 4 CATEGORIES </li></ul><ul><li>Thanks to the contribution and feedbacks from several watchmaking industry experts from media, brands and retailers, the following criteria have been taken into consideration to define 4 coherent watch brands categories: </li></ul><ul><ul><li>Brand positioning (market and target audience) </li></ul></ul><ul><ul><li>Offer (average price) </li></ul></ul><ul><ul><li>Volume (similar volume of demand) </li></ul></ul><ul><ul><li>Competitive environment </li></ul></ul><ul><li>GROUPING 10 MARKETS IN 3 REGIONS OF THE WORLD </li></ul><ul><li>To facilitate the analysis and determine trends from an international point of view, the 7 markets are regrouped into “Regions”, as followed: </li></ul><ul><ul><li>• “ Europe” refers to the United Kingdom, Germany, France and Italy </li></ul></ul><ul><ul><li>• “ BRIC” refers to Brazil, Russia, India and China </li></ul></ul><ul><ul><li>• The United States and Japan are the only stand-alone countries </li></ul></ul>Methodology

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2. MARKET SHARE WHAT DO WE TALK ABOUT ? Internet Penetration Percentage of the total population of a given country or region that uses the Internet . ( Internet World Statistics 2009) Search Origin Weight of each country within overall 300 million of search queries analyzed globally Category Searches Summed search volumes of all brands within each category <ul><li>WHAT DO WE LEARN ? </li></ul><ul><li>Where does the demand for luxury watches come from? </li></ul><ul><li>In each region of the world, what brand categories benefit the most from consumer interest? </li></ul><ul><li>How should the findings of the WWR be taken in perspective with each country’s Internet penetration rate? </li></ul>DECIPHERING THE GLOBAL DEMAND

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Global Internet Penetration

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Global Internet Penetration <ul><li>The fast-growing BRIC markets, with nearly 550 million Internet users, exceed their Western and Japanese counterparts, by almost 50 million Internet users </li></ul><ul><li>Brazil and Russia lead their BRIC counterparts in terms of Internet adoption with nearly one third of the population presently connected to the internet </li></ul><ul><li>China, the BRIC pillar with the greatest growth, surpasses the number of US Internet users by 58% - an increase of 23 percentage points compared to last year - nearly 360 million Internet </li></ul><ul><li>Japan and the US stand out with the highest Internet penetration, reaching almost three quarters of the population </li></ul><ul><li>The only country which is still hovering at the halfway mark is Italy, with the lowest penetration of all the western countries studied (51%). </li></ul>INSIGHTS

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Global Geographic Search Origin

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Global Geographic Search Origin <ul><li>United States is still the most important market (41.3%) </li></ul><ul><li>Germany is now the European leader in search volume (13.3%), ahead of United Kingdom (10.9%) </li></ul><ul><li>Demand from Italy (9.3%), with the lowest Internet penetration in Europe (52%), exceeds the one in France (7.2%), showing Italians’ higher interest in luxury watches </li></ul><ul><li>Search engines confirms reaching consumers from BRIC markets (11.8%), where culture and appetite for luxury watches are constantly gaining importance </li></ul>INSIGHTS

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Global Geographic Search Origin “ Italians have always had a love affair with luxury watches. In fact, Italy remains one of the hottest markets for the likes of vintage Rolex watches in the world” Benjamin Clymer, Publisher, Hodinkee, USA “ The US consumer is hungry for information. Over 70% of customers who walk into our store have done online research first. They are approaching the purchase of a watch the same way that a car is purchased, and are gathering all pertinent details prior to stepping up to the counter. The Internet provides such a broad spectrum of information, and the instantaneous nature makes the process stress-free.” Danny Govberg, President and Owner, Govberg Jewelers, USA “ French high-end luxury watch consumers are not numerous, especially if we consider Paris, where 70 to 80 % of the buyers are foreigners.” Laurent Picciotto, Owner of Chronopassion, and FHH Ambassador France OPINIONS

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Global Geographic Search Origin in the BRIC Markets

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Global Geographic Search Origin from the BRIC Markets <ul><li>Demand coming from Brazil, Russia, India and China already account for almost 12% of the global searches. </li></ul><ul><li>The 8th export market according to the FHS (Jan-Oct. 2009), China alone accounts for 59% of the demand coming from the BRIC markets, followed by Brazil, Russia and India with 20%, 13% and 8%, respectively. </li></ul><ul><li>In most of the BRIC markets, the overall demand is strongly concentrated over 5 powerhouse brands (Rolex, Omega, TAG Heuer, Cartier and Breilting) while the other 20 receive relative low search volumes. </li></ul>INSIGHTS

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Global Geographic Search Origin from the BRIC Markets <ul><li>“ Chinese luxury goods consumers are younger. These people seek watch information through search engines, online forums or websites for luxury watches in Chinese.” </li></ul><ul><li>David Chang, Founder of Research Office of Haute Horlogerie and China, Correspondent to the FHH Journal </li></ul><ul><li>“ This result might not be surprising, as these 5 brands are the strongest in terms of notoriety, visibility and, of course, sales volume ” Christophe Maincourt, FHH Mission Delegate Latin America. </li></ul><ul><li>Russia, with 13% of the demand for luxury watches from the BRIC markets, “presents great growth opportunities along with relatively little supply awareness.” Alexey Tarkhanov, Chief of Culture, Kommersant, Russia </li></ul><ul><li>“ 50% of India is “young” - 25 years and below – and this segment is comprised of Internet savvy individuals who are not necessarily consumers of luxury products.” </li></ul><ul><li>Anita Khatri, General Manager, Times of India, FHH Mission Delegate India. </li></ul>OPINIONS

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Category Searches by Region <ul><li>Haute Horlogerie : Audemars Piguet, Blancpain, Breguet, , Franck Muller Girard-Perregaux, IWC, Jaeger-LeCoultre, Patek Philippe, Vacheron Constantin, Zenith </li></ul><ul><li>Women’s Jewelry : Bulgari, Cartier, Chopard, Piaget </li></ul><ul><li>Prestige : Breitling, Hublot, Omega, Rolex, TAG Heuer </li></ul><ul><li>High Range : Baume & Mercier, Ebel, Longines, Montblanc, Raymond Weil, Rado </li></ul>

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Category Searches by Region <ul><li>Prestige watches account for over half of all the Internet searches in every region, thanks to the attraction of major leading brands such as Rolex, Tag Heuer, Omega and Breitling. </li></ul><ul><li>Haute Horlogerie (25%) and Women’s/Jewelry (14%) watches perform well in Japan </li></ul><ul><li>“ High Range” brands maintain a larger share in the U.S. and China (13%) </li></ul><ul><li>“ This past year was witness to the well-publicized discounting of brands within this category [High Range] , between department store sales, going out of business sales, and specialty discount websites.” Danny Govberg, President and Owner, Govberg Jewelers, USA </li></ul>INSIGHTS OPINION

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Global Brand Market Share for Haute Horlogerie

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Global Brand Market Share for Prestige

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Global Brand Market Share for Women’s/Jewelry

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Global Brand Market Share for High Range

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Global Brand Market Share in the BRIC Markets

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Global Brand Market Share <ul><li>Haute Horlogerie </li></ul><ul><li>The US is still the n°1 market across the board </li></ul><ul><li>With an 11.9% average of share of searches from BRIC markets for this category, China and Russia strongly dominate India and Brazil </li></ul><ul><li>Women’s/Jewelry </li></ul><ul><li>Italy remains the 1st market for Bulgari searches, while the US increases its significance in online search volume from 10% to 25% </li></ul><ul><li>The US still has the highest share of search volume for the three other brands, but the gap with China is closing in the case of Piaget. </li></ul><ul><li>Prestige </li></ul><ul><li>US is still the leading market for the Prestige category. </li></ul><ul><li>Relatively, Omega and Rolex show the most balanced proportionate spread over all the countries analyzed. </li></ul><ul><li>Hublot stands out with the strongest showing in France, </li></ul><ul><li>High Range </li></ul><ul><li>The US remains the n°1 market in this category (on average 13.5%), while BRIC markets show significant search volumes for these specific brands (on average 11.6%). </li></ul>INSIGHTS

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Global Brand Market Share These results “ are perfectly in line with the market evolution of both established and emerging markets. The new markets are particularly interesting as the level of brand searches are based on their offline visibility, recognition and perceptions.” Uché Okonkwo, Executive Director, LuxeCorp, Author of “Luxury Online” (Palgrave, 2010), France “ These results show special regional associations with particular brands to have a high impact on consumer interest in those countries. Otherwise you would likely see a correlation between product availability and Internet searches.” Ariel Adams, aBlogtoRead.com, USA OPINIONS

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Ariel Adams aBlogtoRead.com, USA Robert-Jan Broer Editor, Fratello Watches, Netherlands Luana Carcano Lecturer, SDA Bocconi School of Management, Milan Carlo Ceppi FHH Mission Delegate Italy David Chang Writer, Founder of Research Office for Haute Horlogerie and China, Chinese correspondent of FHH Journal Benjamin Clymer Publisher, Hodinkee, USA Richard Courbrant Journalist, FHH Ambassador Latin America Danny Govberg President and Owner, Govberg Jewelers, USA James Gurney Editor in Chief, QP Magazine, United Kingdom Gareth Jones Head of Digital Sales, Financial Times, Switzerland Anita Khatri General Manager, Times of India, FHH Mission Delegate India Christophe Maincourt FHH Mission Delegate Latin America Uché Okonkwo Executive Director, LuxeCorp, France Author of “Luxury Online” (Palgrave, 2010) Laurent Picciotto Owner of Chronopassion, FHH Ambassador France Nicolas de Quatrebarbes FHH Mission Delegate Germany Alexey Tarkhanov Chief of Culture, Kommersant, Russia Cyrille Vigneron FHH Mission Delegate France 2010 Invited Contributors

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What are the differences between the EXTRACTS and FULL Versions? More information on www.worldwatchreport.com

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What makes the WorldWatchReport unique? Traditional Market Studies Online Market Studies from IC-Agency <ul><li>Elements measured aren’t always representative of the exact preoccupations of those surveyed </li></ul><ul><li>Focuses on real consumer intentions </li></ul><ul><li>Responses are influenced through the method of questionning </li></ul><ul><li>Spontaneous responses </li></ul><ul><li>Ego biases are unavoidable </li></ul><ul><li>Anonymity removes ego biases </li></ul><ul><li>The panel is predefinied. Its composition may not be representative </li></ul><ul><li>The panel is naturally defined and focuses on the intentions displayed by those surveyed </li></ul><ul><li>Relatively high costs for varying results </li></ul><ul><li>Limited costs for real-time responses </li></ul>

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About IC-Agency and Luxury Digital Marketing IC-Agency is the company in which the Luxury Digital Marketing™ concept was founded. This unique approach offers exclusive brands the ability to reinforce their positioning online. Based in Europe (Switzerland) and in North America (Canada), IC-Agency offers services including analysis, promotion, and protection of brands, products and services. A number of independent luxury brands can be found among IC-Agency’s clients, as well a brands belonging to groups such as Swatch, Richemont, LVMH and PPR / Gucci. In 2009, following an invitation from the Financial Times, IC-Agency participated in the worldwide launch of HowToSpendIt.com. Contact www.worldwatchreport.com [email_address] IC-Agency (Geneva) 7 Ave Krieg CH-1208 Geneva T. + 41 22 702 07 60 http://www.ic-agency.com IC- Agency (Bathurst, NB) 216 Main Street, Suite 312 Bathurst, NB, E2A 1A8 Canada T. +1 506 547 8292