>SHOP

keep my inbox inspiring

Sign up to our monthly newsletter for exclusive news and trends

Follow us on all channels

Start following us for more content, inspiration, news, trends and more

© 2019 - Copyright Fondation de la Haute Horlogerie Tous droits réservés

Economic growth continues to drive Swiss watch exports
Economy

Economic growth continues to drive Swiss watch exports

Friday, 26 November 2010
close
Editor Image
Christophe Roulet
Editor-in-chief, HH Journal

“The desire to learn is the key to understanding.”

“Thirty years in journalism are a powerful stimulant for curiosity”.

Read More

CLOSE
4 min read
E

For the nine months to end September, exports of Swiss watches across all segments increased 21.5% on the same period last year, while the +CHF 3,000 export price* (€2,260), category gained 22%. If the trend continues through to year-end, the industry could come close to matching 2008’s record of approximately CHF 16 billion (€12 billion) for 26 million watches, and leave 2009 figures far behind.

Financial institutions barely raised an eyebrow when the latest watch industry statistics (up 25.5% in value in September and 21.5% for the first nine months) were announced. “To be expected,” declared JP Morgan, recalling that 2009 had been a deficit year for Swiss watchmaking with a substantial fall in export sales. From an analyst’s perspective, this means that until the end of the year, growth in Swiss watch exports, which only began to recover in January 2010, has the benefit of a positive base rate. Be that as it may, this upward trend bodes well and, if confirmed for the full twelve months, could well make 2009 nothing more than a bad memory.

Watches with an ex-works price* above CHF 3,000 (€2,260) account for just 4.5% of export volume but close to two-thirds of value, which is why news of the upturn in this price category – which gained 22% for January to September 2010 – has been welcomed with open arms. Not that brands should be using this as a pretext for celebration. These figures are for export, not sales to end customers, and success is measured by actual supply and demand. Still, surveys by the FHH show that some brands are again finding their production capacity stretched to the limit.

Fine Watches sweep the board in China

As the Chinese economy continues its “great leap forward,” the country has risen through the ranks of export destinations for luxury goods. Unsurprisingly, luxury brands are well aware of the advantages to be gained from developing their business in China, which is set to become one of the sector’s biggest markets… as figures for Swiss watch exports clearly show. For the first nine months of 2010, China ranks third for exports of Swiss watches in value terms, behind Hong Kong and the USA. Slim this down to watches with an ex-works price under CHF 3,000* (€2,260), and China moves up to second place. By way of comparison, the country was trailing in eighth place for the same period 2009.

Turning to growth in Swiss watch exports, China is top of the board, and with a comfortable lead, having recorded a 65% increase for January to September 2010. Hong Kong, which represents twice the US market and is a wide-open door into China, posted 43% growth in Swiss watch exports for the first three quarters, ahead of the United States which came in at “just” +13%, leaving no doubt as to who is driving the Swiss watch industry.

China also leads the field for growth in exports of watches with an ex-works value above CHF 3,000* (€2,260): they doubled over the first nine months. Hong Kong and Singapore, also major destinations for this category of watch, posted healthy growth in the region of 40% whereas the more mature markets such as the United States, France, Italy and the United Kingdom gained little more than 10%, a performance which Portugal, Saudi Arabia and even Russia have topped.

Note that the BRIC countries (Brazil, Russia, India, China) account for close to 6% of total Swiss watch exports in the +CHF 3,000* (€2,260) category for January to September, versus 4% in 2009. Three of the four have reported growth well in excess of the average for the branch (21.5%), with an increase of more than 100% in China, 42.5% in Russia and 59.5% in India. Brazil is trailing with a tiny 0.5%. Yet however spectacular growth may be in these “new regions,” it mustn’t overshadow the importance of European and American markets for watch firms which must keep a fine balance when developing their distribution networks.

*Retail price is between two and three times the ex-works or export price.

Back to Top