Swiss Watch Exports Hit Record High Despite Decline in Volume
Insights from Morgan Stanley's annual watch sector report on the state of the luxury watch industry in 2022
As every year, Morgan Stanley has published the annual watch sector report, providing important informations on the watch industry. After shrinking significantly during 2020 due to the pandemic, 2021 corporate revenues were exceeded in 2022 as a result of a further increase in the size of the primary market. Swiss watch exports-a proxy for the global luxury watch business-breached records again in 2022 with an annual tally of 23,7 billion francs, an all-time high thanks to year-on-year growth of 11.6%.
After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, the volume of Swiss watch exports continued to hit rock bottom. The industry exported only 15.8 million watches in 2022, an increase of just 49,000 or 0.3% growth from 2021, while in 2000 Switzerland still exported 30 million watches a year. In other words, the number of Swiss watches exported has declined by nearly 50% in the past 23 years.
And the numbers hide an even darker reality. Excluding the MoonSwatch from the equation, the decline in export volume would have been about 900,000 units from 2021. This is based on our estimates of the MoonSwatch representing 950,000 units exported and 1,000,000 units sold globally in 2022.
The "big four" (Rolex, Audemars Piguet, Patek Philippe, and Richard Mille) continued to outperform the broader industry and together captured a consolidated market share of 41.7%, up from 36.7% in 2019.
The first brand in terms of revenues is Rolex with total sales of CHF 9.3 billion, a 14.8% increase over the 2021 figure, mainly due to an organic growth factor but also due to the significant increase in list prices over the past year. Although its watches are almost impossible to find at retail, the brand has increased production from an estimate of 1,050,000 units in 2021 to 1,2 million pieces sold in 2022 (+14.2%). Audemars Piguet had the 50th anniversary of its iconic Royal Oak to help increase revenue over the CHF 2 billion mark for the first time in its history, translated into an increase of 25% in revenues with respect to 2021.
Patek Philippe and Richard Mille achieve outstanding performance with opposite retail strategies: the former relies almost entirely on third-party retailers, while the latter controls its own retail network, owning boutiques or relying on joint ventures.
Vacheron Constantin is the third Richemont brand in the top ten after IWC and Cartier. IWC and Vacheron Constantin are likely to be the next members of the billion-franc revenue club along with Breitling, which also entered the top ten thanks to revenue growth in 2022 of 25%.
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