Watch industry association president sees great potential in India
Published: Wednesday, Apr 10th 2024, 13:11
Updated At: Thursday, Apr 11th 2024, 01:59
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After two boom years, business with Swiss watches is faltering. In February, fewer watches were exported than in the previous year for the first time in a long time. However, the new President of the Swiss Watch Federation (FH), Yves Bugmann, believes that the industry is still well positioned for the future. He sees great potential in the Indian market, among others.
"The slight decline in exports in February is a snapshot," said Bugmann in an interview with the news agency AWP at the "Watches&Wonders" watch fair in Geneva. Now it is important to observe how business develops in an environment burdened by economic concerns and geopolitical crises. The industry is also concerned about the continuing strength of the Swiss franc despite the SNB's interest rate cut.
In February, exports of Swiss timepieces fell by 3.8% to 2.15 billion Swiss francs. However, the industry had seen strong growth in the past two years and set a record in 2023 with an export volume of 26.7 billion Swiss francs.
Delle in China
The main reason for the decline in export volumes in February was China. "The economic situation in China is tense and consumers are putting their money aside rather than spending it, for example on buying a watch," said Bugmann, who took over the FH presidency from Jean-Daniel Pasche at the beginning of 2024.
In contrast, according to Bugmann, other markets continue to develop extremely positively for Swiss watch manufacturers. "The USA has enjoyed uninterrupted growth for two years despite high inflation and continues to grow."
India offers potential
Business is going very well for watch manufacturers in Singapore, some Latin American markets, the United Arab Emirates and, most recently, India. "With around 1.4 billion people, the Indian market has great potential," said Bugmann.
For a long time, the Indian watch market did not really take off despite investments by many brands. But that has changed: Last year, India moved up to 22nd place in the watch export statistics with growth of 16%, leaving countries such as Austria, Ireland and Kuwait behind.
"The new free trade agreement concluded with India will make India even more interesting for the watch industry," Bugmann is convinced. After all, it would gradually reduce the import duties for watches, which currently stand at 20 percent, to zero over seven years.
The fight against counterfeiting
One of Bugmann's main concerns remains the fight against the trade in counterfeit watches. "Every year, the Swiss Watch Federation confiscates several million counterfeit Swiss watches on the markets and removes over a million advertisements for fake watches from the Internet," explained the President.
"We remain strongly committed to protecting our products with the 'Swiss Made' quality label," says Bugmann. To this end, a group of 50 watch brands was set up several years ago under the umbrella of the association, which is involved in campaigns to combat counterfeiting.
Bugmann said that important progress had also been made in India with regard to the protection of "Swiss Made" products. However, he also has to convince politicians in this country. For example, the revision of the customs law being discussed in parliament could become a problem.
Accordingly, goods that are not subject to duty could be exempted from the customs declaration requirement in future. This approach was approved by the National Council at the beginning of March and is still being discussed by the Council of States. "If fewer parcels are checked at customs, then more counterfeit watches will be imported into Switzerland," warned Bugmann.
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