Swiss watch exports declined in May due to reduced demand for premium and luxury timepieces in Mainland China and Hong Kong.
According to the Federation of the Swiss Watch Industry, Swiss watch shipments fell 2.2 per cent by value to US$2.6 billion compared to the previous year, with exports to Mainland China (the second-biggest market behind the US) and Hong Kong dropping by 12 per cent and 23 per cent respectively.
The decline in demand for high-end timepieces is attributed to various factors, including higher interest rates, economic instability, and geopolitical tensions.
Additionally, the strength of the Swiss franc against other currencies has led to price increases in certain markets, impacting consumer purchasing decisions.
Citigroup analyst Thomas Chauvet has expressed concern about the export report’s implications for companies such as Richemont and Swatch Group AG, which makes Omega and Longline brands.
“With Richemont and Swatch’s high exposure to a depressed Chinese consumer, we see downside risks,” adds Chauvet.
Despite the overall downturn, the export of expensive watches priced above $4500 showed resilience, with a 0.7 per cent increase in value.
However, shipments of watches in the $700-4500 price range declined by 16 per cent, while those priced below $287 experienced a 1.2 per cent decrease in value.
In response to the challenging market conditions, Swiss watchmakers – including Rolex and Patek Philippe – said they have been focusing on producing and promoting more expensive timepieces to maintain sales momentum.
