Swatch has beaten Apple to mobile payments in China after launching a new watch – but it's not technically a smartwatch.
The Swiss timepiece maker unveiled the Swatch Bellamy on Wednesday – an analog watch with a chip inside that allows you to do contactless payments.
It does not connect to the internet or your phone but instead contains near-field communication technology that allows a user to pay by touching their watch on a terminal.
Swatch has struck partnerships with China UnionPay – which holds a virtual monopoly over payments in China – and Bank of Communications in order to bring the feature to the world's second-largest economy.
The Swatch Bellamy is the company's attempt to fend off the challenge posed by the Apple Watch. Analysts say that Swatch is one of the most exposed companies to the Apple Watch threat because of the lower-end brands it sells. On Monday, the CEO of TAG Heuer told CNBC, that Apple's device is "big competition" in the price segment between $200 and $2,000.
And China is a very important market for Swatch with 45 percent of sales coming from Chinese consumers, according to Bernstein estimates.
But Swatch, like many luxury players, has had to deal with a tougher economic situation in China and volatility in the country's stock market. The company will be hoping the Swatch Bellamy will improve its bottom line after net income fell nearly 20 percent year-on-year in the first half of the year.
The 580 yuan (US$91) watch will start selling in China in January and will "soon be launched in Switzerland with a Swiss bank and secure transaction partner, as well as in the U.S.A.," according to Swatch.
Apple has been seeking to bring its contactless payment service Apple Pay to China but has been facing resistance and issues with UnionPay, according to a report in MarketWatch earlier this year.
Swatch released a smartwatch earlier this year called the Touch Zero One which has basic features such as step counting and a calorie tracker. Traditional watchmakers like Swatch had previously dismissed the threat of the Apple Watch when it was first announced, but those companies have now changed their tune. TAG Heuer is set to release an Android Wear powered device at an event in November. The CEO told CNBC earlier this week that while smartwatches were important, the traditional higher-end watches would still survive.
"I don't say we want to compete with Apple because we're not in the same business, but we can compete any technological product. So this means we believe in it (smartwatches), but we also believe in our traditional product. We believe in both in fact," Jean-Claude Biver said in an interview on Monday.