Like most luxury brands, Li says, IWC will continue to tap the Chinese market by moving into smaller cities where there are considerable opportunities.

"Chinese people's demand for high-end wrist watches has continually risen in China's second- and third-tier cities over the past few years and there is potential for growth.

"In addition to consolidating our business in developed markets such as Beijing and Shanghai, we will enhance IWC's brand awareness in cities such as Chengdu, Chongqing, Hangzhou, Nanjing, Shenyang and Tianjin, where we have already done very well. We believe it will greatly fuel IWC's growth in China."

Chinese people appreciate heritage and prestige but, as customers mature, they look for uniqueness, so watchmakers incorporate Chinese elements into their designs so that they can come up with something new and specific for the Chinese.

"Watches with Chinese elements have a greater appeal to customers in China. Some of our products sold here are limited editions designed specifically for the Chinese market. They are of great value to collectors."

The Chinese now have a much wider range of brands to choose from, Li says. "Rather than buying watches simply to flaunt their wealth, they are increasingly interested in the brand's cultural heritage, which they believe will better display their fine taste."

To promote brand visibility, IWC has established itself on social media, such as Facebook, Twitter and Sina Weibo as the most visible haute horlogerie brand. IWC's online presence contrasts with the reluctance of most of its competitors to join the Chinese social media wave. IWC now leads in the digital world with more than 225,000 Facebook fans and 6,000 followers on Sina Weibo, Digital Luxury Group says.

"After more than 10 years, more luxury brands have begun to realize that they cannot rely solely on traditional advertising to cultivate customer loyalty in China," Li says. "Interacting with potential customers is becoming more important."

Even as Swiss watches continue to sell well in China, local watch companies will improve their performance, he says, and both will find their place in the Chinese market by targeting the right customer groups and through constant technical and design innovation.

Top 10 wealthiest people of Chinese origin

Top 10 brands that win rich women's hearts