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Where Is The Swiss Watch Industry Going?
Oct 08, 2018

The results of the August analysis of the Swiss watch industry have been released. The data shows that the Swiss watch industry once again performed strongly this month, extending its growth to 16 months.

The Swiss Watch Industry Federation (FH) announced that compared with August 2017, watch exports increased by 5.5% to 1.5 billion Swiss francs (about 10.6 billion yuan). About a dozen of the top 30 Swiss markets saw double-digit growth in August; in addition, the growth rates of the two small markets, Kuwait and Oman, reached almost three digits (119% and 154%).

 In August, the US market did not have a strong double-digit or even triple-digit growth. However, FH noted that the US market recovered after experiencing July's volatility (-0.7%). FH said in a statement: "The US market rebounded to +9.0% after July, confirming the continued recovery since the beginning of the year."

The United States is Switzerland's second largest market after Hong Kong. But since 2014, the performance of the US market has been unsatisfactory. The rebound in August clearly made the Swiss feel more comfortable, and more and more practitioners believe that the US market will re-emerge. In the eight months of the year, Swiss exports to the United States increased by 7.8% to 1.41 billion Swiss francs (about 10 billion yuan).

However, this does not necessarily benefit all Swiss watch brands. The data shows that luxury watches with prices above $5,000 are the strongest, while those with less well-known brands are increasingly bleak. Demand for watches above $5,000 is growing.

Moreover, although the US market is picking up, it is lagging behind the pace of recovery of global Swiss exports. Year-to-date, Swiss watch exports increased by 9.5% to 13.83 billion Swiss francs (about 98.3 billion yuan. In addition, FH data only represents wholesale). By August, other top Swiss watch markets have grown faster than the US, for example, Hong Kong has risen by 28%; mainland China has risen by 12%; and Japan has risen by 14%.

Further data shows that the top 30 markets for Swiss watches accounted for 92% of total exports, with six markets (UK, Italy, Spain, Taiwan, Austria and Belgium) outperforming last year. And as of August, 11 of the top 15 markets of Swiss Watch have reached double-digit growth. Overall, the Far East has the strongest performance this year, while the EU market is the weakest.

In the export category, as in the past, mechanical watches are still an important driving force for growth. To date, the export growth rate of mechanical watches has exceeded 9%. In contrast, the export of quartz watches continues to be sluggish, down 2.0% this year. At the same time, the performance of the low-priced watch market is not optimistic.

Personally, the general trend of the Swiss watch industry is that the two-level differentiation is becoming more and more serious, which is consistent with the trend of large groups continuing to annex independent niche brands.

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