China Demand Drives Swiss Watch Growth

RAPAPORT… Swiss watch exports rose in December, as retailers stocked up in anticipation of the Chinese New Year.

Shipments to all countries grew 6% to CHF 1.73 billion ($1.78 billion) in December, the Federation of the Swiss Watch Industry reported Tuesday. That figure mainly reflects a 49% increase in exports to China, which outweighed a 21% drop in orders from Hong Kong. Supply to the US rose 10%, while Singapore jumped 25%.

Exports also benefited from an additional working day compared to the previous year, and versus a disproportionately weak figure the year before.

“Swiss watch exports posted steady growth in December, primarily thanks to China,” the federation noted. “China accounted for a significant share of global growth, anticipating expected sales in January to mark the Chinese New Year, which falls very early this year.”

Pro-democracy protests in Hong Kong have dented luxury demand in the municipality over the past six months, and drastically decreased tourist visits and local spending.

“The situation in Hong Kong showed no improvement over October and November,” the federation explained. “The special administrative region [SAR] saw a decline of 26% in the fourth quarter, costing the total result for the period more than four growth points.”

The trend toward shipments of higher-value watches continued in December, with timepieces priced over CHF 3,000 ($3,093) climbing 13% by value, while lower-value ones all declined. Orders of watches made from precious metals saw the largest growth, jumping 15%, while those composed of gold and steel went up 9%. Timepieces made solely of steel declined 3%.

In 2019, global exports of timepieces rose 2.4% year on year to CHF 21.7 billion ($22.37 billion).


Image: Swiss watches in a store display case. (Shutterstock)