After the brief upturn of July-August 2024, international sales of Swiss timepieces collapsed in September. The explanation lies mainly in poor sales on the Asian market, in China and Hong Kong in particular.
Johan Rupert, boss of Swiss watchmaking giant Richemont (Cartier, Baume & Mercier, IWC, Jaeger-LeCoultre, Vacheron Constantin…) and his Swiss colleagues were right.
Last September, despite two months of rebound in worldwide exports of Swiss watches (+1.6% in July and +6.9% in August), after five consecutive months of decline, they were worried about future prospects, weighed down by a lack of medium-term visibility and the sluggishness of the Chinese market.
Record decline
At the time, they called respectively for the former to limit production, and for the latter to call for emergency support measures (moderation of the Swiss currency, etc.) from the public authorities.
And indeed, September’s statistics from the Fédération Horlogère Suisse vindicated the Swiss industry’s pessimism.
Exports of Swiss watchesfell by a record 12.4%, “the steepest monthly decline of the year (-12.4%), for a total value of 2.1 billion Swiss francs”.
Unsurprisingly, as is the case for luxury goods players in general, it was China and Hong Kong, “in sharp decline”, that were “responsible for two-thirds of this decrease”. Exports to the Middle Kingdom have plummeted by 49.7% over the past year!
Sharp decline over the first nine months
Over the first nine months of the year, the decline in Swiss watch exports to all destinations, which was “only” 1.4% in August this year, has deepened still further, and now stands at – 2.7% compared to 2023.
Geographically, while “the majority of markets recorded a significant decline in September” , a few managed to escape the prevailing gloom.
Such is the case of the United States, “still growing” (+2.4%), which further strengthened its role as the leading outlet for Swiss watchmaking. Over the first nine months of 2024, sales of Swiss watches on Uncle Sam’s behalf rose by 4.9%.
Europe (-3.4%), on the other hand, saved the day thanks to markets such as Germany (+5.7%) and Spain (+5.3%).
Asia, the red lantern
Asia (-22.6%) was the continent with the worst monthly performance.
Among the markets most affected were the United Kingdom (-10.7% in value), the third-largest outlet for Swiss watchmakers, Hong Kong ( -34.6%), the fourth-largest market, China (-49.7%), the sixth -largest, and… Singapore (-13.9%), seventh market. Together, “they accounted for more than 80% of the worldwide decline ”!
Other Asian countries such as South Korea (-19.8%), Taiwan (-29.8%) and Thailand (-34.6%) have also plummeted. In 2024, they rank 11th, 13th and 21st respectively in terms of destinations for Swiss watch exports.
Since the beginning of 2024, China and Hong Kong have been the biggest declining destinations (-24.6% and -20.4%) for sales of Swiss timepieces. Declines in the other markets in the top ten list generally ranged from – 0.6% (Singapore) to – 2.2% (Germany). Thailand plunged by 20.7%, but is only the 21st destination for Swiss watch exports…
Luxury watches: a less pronounced decline
While all watch categories registered declines, they were not all affected to the same extent.
Watches priced between 200 and 500 Swiss francs suffered the most, with a 33% decline in their export value in September 2024, ahead of the more affordable timepieces sold for less than 500 Swiss francs (-20.8%).
By comparison, the most luxurious segment, watches costing over 3,000 Swiss francs , fared slightly better, with a contraction limited to 7.3%.
In terms of materials, exports of Swiss steel watches were the hardest hit, with a decline of 19% in value and 21.1% in number of pieces.
Sales of precious metal models slowed by 9.1% in value terms, while those of bimetallic compositions (-2.3%) proved more resilient.
In volume terms, the Other materials (-19.3%) and Other metals (-25.2%) categories accounted for a third of the decline.
As a general rule, La Fédération Horlogère stresses that the statistics it publishes “are based on export figures and not on sales to end consumers”, and that “there may be discrepancies between these two types of results”. It also stresses that its statistics “result from the consolidation of exports by all Swiss watchmaking companies” and “do not allow us to establish the business trend of a particular company or group, given that business trends may differ from one player to another”.
Nevertheless, the Swiss watchmaking industry as a whole is likely to remain cautious in the months ahead…
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Read also > The Swiss Watch Industry sounds the alarm
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