Swiss watch exports increase by 6.3 percent in November 2017

The Swiss watchmaking industry has seen seven months of continuous export growth as of November 2017. The total value of exports stood at just under 2.0 billion francs (1.977 million), equivalent to 6.3% growth over the November 2016 figure. The main markets for Swiss watch industry exports alternated between strong rises and moderate falls in November. 

Most prominent among them is the United States. Exports were down, albeit slightly, in November (-0.4%). Exports have fallen for nine of the past 11 months and are down 4% year to date. Despite the United States’ growing economy and a booming stock market, Swiss watch sales here are bedeviled by a number of factors. They include the rise of e-commerce (which Swiss luxury brands on the whole have avoided), a glut of luxury watches available online from gray-market dealers, and the decline in traffic in brick-and-mortar retailer stores.

In Middle East UAE and Qatar increased by 14.8% and 26.2 percent respectively. Saudi Arabia, Bahrain and Kuwait was down by 17.7%, 7.1% and 32.1 percent respectively.

China’s surge was the largest jump in 30 months, the FH said. It is the latest sign of a new luxury goods boom in China since the Chinese government’s easing of its crackdown on “gift-giving” (i.e., bribery). That crackdown sent the Swiss watch industry into a slump in 2015 and 2016. The slump is now over. Through November, Swiss watch exports are up 2.8% for 2017 to CHF18.2 billion ($18.5 billion).

The China boom has helped this year’s recovery in Hong Kong. Exports there jumped 4.4% in November, the sixth consecutive monthly jump, and are up 5.3% year to date. Hong Kong and mainland China, Switzerland’s first and third largest export markets, are again riding to the Swiss watch industry’s rescue, as they did in 2010, after exports collapsed in the Great Recession of 2009. Other Asian markets are recovering, too. Exports to Singapore, for example, Switzerland’s seventh largest market, are up 10.6% for the year.

A closer look at the FH data shows that exports of electronic watches through November of this year are down by more than 1 million units, to 15.6 million, a drop of 6.3%. By contrast, unit exports of mechanical watch are up 4.6% over the same period, to 6.59 million pieces. It is something the Swiss need to keep an eye on. Quartz watches account for the lion’s share of Swiss watch volume. Between 2011 and 2015, Switzerland exported more than 20 million quartz watches per year. In 2016, that output fell to 18.4 million, a drop of 9.3%. With quartz watch exports down another 6% this year, the FH is sounding the alarm.