Swiss watch exports achieved unprecedented levels in 2023, driven by higher shipments of affordable quartz watches and price increases. However, the growth rate declined in the latter half of the year. The Federation of the Swiss Watch Industry reported that timepiece exports reached an impressive 26.7 billion Swiss francs ($30.9 billion) last year, but the sales growth rate fell to 3.6% in the second half, compared to a significant 11.8% in the first half.
Several factors contributed to the slowdown in Swiss watch exports, including cautious consumer spending due to economic and geopolitical uncertainties. The increasing value of the Swiss franc has also placed pressure on watch producers. The Federation highlighted that subcontractors and suppliers have expressed concerns about the outlook for the industry this year.
This sluggish economic situation has partially impacted the luxury goods market, leading to reduced consumer confidence across all segments. Various brands have already signaled their intention to be cautious in their forecasts. Previous reports from Bloomberg News shed light on the industry’s slowdown, emphasizing the exceptional demand for luxury timepieces during and following the pandemic.
In 2024, the strong Swiss franc is expected to continue imposing challenges on watchmakers, particularly in the entry-level and mid-range sectors. President Thomas Jordan of the Swiss National Bank acknowledged the adverse impact of the high value of the Swiss currency on exporters.
Despite the deceleration, Swiss watch exports still achieved a remarkable 7.6% increase to reach a record high in 2023. This growth was primarily fueled by the popularity of the Omega MoonSwatch collaboration, which boosted exports of quartz watches to over 10 million units, resulting in a 7.2% rise in volumes.
The United States maintained its position as the leading destination for Swiss watches, with exports rising by 7% to 4.1 billion francs, accounting for approximately 16% of the total exports. Shipments to China experienced a significant increase of nearly 8% to around 2.8 billion francs, constituting approximately 10% of exports.
Luxury watches priced above 3,000 francs continued to drive sales growth, contributing to 92% of the overall increase in value. Conversely, watches with wholesale prices of 200 francs or less, such as Swatch Group AG’s Omega MoonSwatch, accounted for 83% of the volume increase.
In conclusion, while Swiss watch exports achieved remarkable success in 2023, the growth rate decelerated in the second half of the year, and various economic factors continue to pose challenges for the industry. However, the demand for luxury timepieces from top brands remains robust, indicating a resilient market in the face of adversity.
Useful links:
1. Federation of the Swiss Watch Industry
2. Bloomberg News: Swiss Watchmakers Face Forex Pressures in 2024
