The swiss low-end watches, once world-renowned, are selling. Swiss watch exports are likely to hit a 35-year low in 2019 due to a severe downturn in The Hong Kong market, rising demand for high-valued second-hand watches such as Rolex and Patek, and a squeeze on smartwatches such as the Apple Watch.
Exports of Swiss watches fell 13 per cent year-on-year to about 18.9m in January-November, the Swiss Watch Association said on December 19th. The last such “recession” dates back to 1984, when the number was 17.8 million, just as quartz technology and plastic watches were creating fierce competition for the watch industry.
Demand for high-end goods in this important market has braked sharply as fewer tourists visit the hong Kong area of China have been able to travel, Nikkei News reported Tuesday. Exports to Hong Kong fell 27% year-on-year in November, eight consecutive months below the previous year’s results.
Several Swiss companies, such as the Swatch Group, which operates high-end watch Omega and other brands, are operating in Hong Kong. But some companies are considering layoffs and store closures because of instability.
Europe’s main markets also performed weakly in November. Exports to the UK plunged 17.3 per cent in the wake of Brexit uncertainty, while continued protests in France sent Swiss exports plummeting 17.4 per cent in November, while the UAE, once the biggest importer of Swiss watches, fell 27.8 per cent in November. The U.S. was the only gainer in the top three markets for Swiss exports, up 4.6 percent in November.
In addition, another reason for the low export volume of the Swiss watch market is the rise of the smartwatch market. Smartwatches were in full swing in 2014, with smartwatches such as the Apple Watch squeezing into the watch market and quickly getting a slice of the pie.
In response to possible changes, many brands have indeed begun to test-the-water smart watches. Jean-Claude Biver, a former chairman of LVMH’s watch division, said Apple’s $22bn profit per quarter was equivalent to the industry’s annual turnover.
However, Claude Biver is convinced that while smartwatches are starting to grow in the watch market, the market share of manufacturers who actually make traditional watches has not been much affected.
Deborah Aitken, another analyst, says there is only one way to go for low-end products: the amount of continuous sinking.