March saw a significant decrease in Swiss watch exports, which fell by 16% to CHF 2 billion ($2.2 billion), according to data from the Federation of the Swiss Watch Industry.
This downturn is attributed primarily to a reduced demand in key Asian markets, particularly China and Hong Kong.
Export Analysis Breakdown
Decline in Asia
China and Hong Kong experienced pronounced declines, with exports to China dropping 42% to CHF 150.2 million ($165.2 million), and Hong Kong by 44% to CHF 148.1 million ($162.9 million). These reductions have brought exports to levels lower than those observed at the peak of the pandemic in March 2020.
“The negative trend is even worse than we expected and the decline in China is really worrying and probably indicates that inventories in the region were once again too high,” expressed Jean-Philippe Bertschy, an analyst at Vontobel in Switzerland.
Other International Markets
Other regions also experienced declines but to a lesser extent. The United States, currently the largest market for Swiss watches since overtaking China in 2021, saw a decrease of 7% in shipments to CHF 340.5 million ($374.5 million). The UK, Germany, and France noted decreases in the range of 12% to 15%. Exports to Japan decreased by 3.5%, and the United Arab Emirates saw a similar drop of 3.6%.
Impact on Different Price Segments
All price categories of watches saw decreased demand:
- Watches priced below CHF 200 ($220) decreased by 19%.
- Those between CHF 200 and CHF 500 ($550) also declined by 19%.
- Watches in the mid-range category, priced between CHF 500 and CHF 3,000 ($3,300), experienced the largest decrease at 38%.
- Luxury watches valued over CHF 3,000 saw a decrease of 10%.
Industry Overview and Implications
Global Economic Influence
The decline in Swiss watch exports reflects broader economic pressures, including rising interest rates and uncertainties in economic growth and geopolitical situations. These conditions have prompted consumers to become more cautious about purchasing luxury items. The 25% drop in units shipped in March suggests a broader reduction in retailer orders globally.
Implications for the Industry
The luxury watch sector is adjusting to a shifted economic landscape after a period of significant demand. While the pandemic led to increased sales due to consumer savings and luxury spending, the current environment is marked by supply chain challenges and adjusted pricing, affecting production and market stability.
