So if I try to envision how it works, you have a team in Hong Kong and relationships with people in mainland China or Hong Kong. The brands, typically French or Italian, would they exclusively use you to get rid of excess inventory? How should I envision the strategic fit of that?

Patek was gold because you could sell it at any price. People would get their allocations and, for whatever reason, they needed to turn it into cash soon. So they would resell it to you with a little discount versus retail, and you could resell it with a little bit of margin to anyone. We could resell it above retail. I think two-thirds of the production of Patek was going into the gray market.

So if I try to envision how it works, you have a team in Hong Kong and relationships with people in mainland China or Hong Kong. The brands, typically French or Italian, would they exclusively use you to get rid of excess inventory? How should I envision the strategic fit of that?

The watches were easy to resell at above retail value. AP and Rolex were also involved, but Rolex was very difficult because it's heavily controlled. Rolex understood this very early on, so it's very difficult to get your hands on. But Patek, AP, and Richard Mille were primary targets for these kinds of activities. A recurring deal, for example, involved a dealer in Hamburg getting a big allocation, bigger than the local market needs, and wanting to get rid of the watches discreetly. That was very common. But again, the market is shifting all the time because the brands are adapting, and so are the people in the middle. The brands want to sell more, but they want to control their distribution, which is the right thing to do to build brand values. So, as a middleman, like I was, and many of my friends, we need to find the sources and the buyers. We must ensure we don't disturb the brand's activity. The key is to make enough money. A couple of points margin; making a 20% margin on a deal like that is exceptional.

So, the current situation is you would get it from a dealer in Hamburg who has excess stock. You buy from him, ship it to Hong Kong, and then resell it on platforms like Secoo.

Exactly. The key now is to buy at a good price in Hamburg, which offers savings compared to the price in Asia, especially when taxes are factored in. For example, if the price in Paris is 100 including tax, you buy it for around 65.