Swiss watch exports down significantly in the first half of the year
Published: Thursday, Jul 18th 2024, 10:00
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Swiss watch manufacturers once again exported less abroad in June. And the first half of the year was also clearly in decline. The two important Asian markets of Hong Kong and China in particular are weakening significantly. In contrast, the industry in Japan is experiencing an upswing.
Overall, Swiss watch exports fell by 7.2 percent to 2.27 billion Swiss francs in June compared to the same month last year, as reported by the Federal Office for Customs and Border Security (FOCBS) and the Federation of the Swiss Watch Industry (FH) on Thursday. In real terms, i.e. adjusted for price, the drop for products from brands such as Rolex, Cartier, Omega and IWC was as much as 9.7 percent.
According to the watch association, more than 80% of the decline in June was attributable to steel watches (-15.5% in value terms), while products made of precious metals remained stable. The overall volume fell by 300,000 units, which was due to the significant decline in both steel (-18.2%) and the "other materials" category (-19.9%).
After the record year of 2023, the nominal decline for the half-year as a whole amounted to 3.3% to CHF 12.9 billion, with the months of January and April recording positive growth rates and the remaining months negative growth rates. The number of exported watches fell by over 800,000 units (-9.9%) in the first half of the year.
Slump in Hong Kong and China
Growth rates in the key markets of Hong Kong (-23.1%) and China (-36.5%) were particularly negative in June. And things did not look much better in the first half of the year either, with sales slumping by around 20% in volume terms compared to the previous year. Over the half-year as a whole, China and Hong Kong were the number two and three markets with an export volume of around CHF 1 billion each; in June they were only third and fourth.
Another Asian market, Japan, developed positively. In June, watches made in Switzerland worth around CHF 175 million (+13.2%) were shipped to the Land of the Rising Sun, putting it in second place. In the first half of the year, Japan was in fourth place, just behind China and Hong Kong. One reason for the upturn is the increase in tourists traveling to Japan due to the weakness of the yen. Chinese people are also buying more watches there.
The USA remains the clear largest sales market for Swiss watches, with an export volume of CHF 376.2 million (+16.5%) in June and CHF 2.1 billion (+3.6%) in the first half of the year. Other important markets are Singapore, the UK, France, Germany and the United Arab Emirates.
Decline evident at Swatch and Richemont
The sharp decline in China, which is characterized by a weak economy, was also evident at the major listed watch groups Swatch and Richemont, which reported on their business performance in recent months this week. The Swatch Group, for example, suffered a drop in sales of around 30 percent in China together with Hong Kong and Macau.
"We had not expected such a sharp decline at the beginning of the year," Group CEO Nick Hayek told the news agency AWP. Consumer sentiment in China is suffering from the crisis on the real estate market, for example, and has also deteriorated in view of the increasing unemployment among the young population. According to Hayek, brands in the luxury segment in particular have declined sharply, while cheaper brands such as Swatch have actually increased.
Meanwhile, Geneva-based competitor Richemont recorded a decline of 27 percent in the aforementioned markets in the months from April to June compared to the previous year's very high figures.
©Keystone/SDA
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