Swiss watch sales have taken a real hit in previous years for more than a few different reasons. One of the biggest fears when the Apple Watch first hit shelves was that it would destroy the Swiss watch market. In fact, some of the people at the top of Apple were very vocal about the impact they were expecting to have on the Swiss manufacturers.
Thankfully, talk about the demise of Swiss watches was very premature and it seems that Swiss watch sales are booming this year. Exports of watches from Switzerland have grown by the highest amount in almost 6 years thanks to increased sales in an unexpected market! This Swiss watch rebound was certainly unexpected and manufacturers will be hoping that it isn’t a short-lived upturn.
What Led to the Swiss Watch Sales Boom
Swiss watch shipments rose by 13% in January according to the Federation of the Swiss Watch Industry. This proved to be the biggest increase since October 2012 and made for the 9th month in a row that there has been an increase in exports. It is also exciting for the Swiss watch industry to see annual growth for the first time since 2014, the year before the release of the first Apple Watch.
The surprising aspect of this isn’t just the way that luxury Swiss watch sales have improved despite increased competition from top smartwatches, but where in the world this growth has come from. There has been an incredible upturn in popularity of luxury watches in China and Hong Kong. This has boosted sales of Swiss watches in a market which has not historically been the backbone of Swiss watch sales figures.
One of the explanations for this incredible increase in sales to the Asian market – with Chinese exports up by 44% and Hong Kong exports up 21% – is the increased orders for the Lunar New Year. The Lunar New Year was a month later this year than it was in 2017, which was very favourable for the increased exports to the Chinese market. Of course, this does not fully explain the amount exports rose by – and does not explain how exports have increased for 9 consecutive months prior to January 2018.
As Zuzanna Pusz, a Berenberg analyst, explained: “While we note that the data in January benefited from a range of favourable factors, the sudden strong acceleration in growth, if continued, could confirm the beginning of a long-awaited restocking cycle among multibrand watch retailers.”
On the downside for Swiss watch manufacturers, lower end watches actually recorded a slump in sales. These watches (watches costing less than 200 Swiss francs) declined by 3.5% – however, this was the only price category to record any downturn.
Another slight worry is the slump in exports to the United States, a market which has generally been strong for Swiss watch sales. This made for the the 6th consecutive month of lowered exports to one of the most important markets for Swiss watch sales. It remains to be seen whether exports to the Asian market can replace the United States in the long term.
Of course, we always like to end on a bright note. And one real bright note for the Swiss watch industry is that exports to Japan, historically one of the biggest rivals for Swiss manufacturers are up by a staggering 13%.
