The Unstoppable Growth of the Watch Industry
The watch industry keeps growing year after year with no signs of stopping
2022 was a stunning year for Swiss watchmaking, which set a new export record.
The industry registered an important growth that allowed it to hit 24.8 billion in exports, up 11.4% from 2021.
This is an increase of 2.5 billion francs achieved, however, while keeping the total number of watches produced and exported unchanged, which remained at around 15 billion units. The growth in value was driven almost exclusively by watches priced above 3,000 francs, with a sharp increase of 15.6% over 2021.
This figure actually confirms a clear trend in the Swiss industry: sales volumes are declining rapidly. In 2019, before the pandemic, export volumes reached 20.6 million, and even further back, in 2015 volumes were 28.1 million. In just seven years, the Swiss watch industry has lost more than 12 million units (-45%).
The result is an apparent contradiction: the Swiss watch industry is actually growing by shrinking.
According to the Federation of the Swiss Watch Industry (FH), in 2022, growth was driven by the United States, which replicated 2021's performance and recorded export growth of 26.3%, approaching 4 billion francs in total. Europe also weighed heavily on the final result, with three countries in the top ten largest export markets; particularly the United Kingdom, Germany and France, for which exports increased by an average of +21.4%. Asia was split between declines in China (-13.6%) and Hong Kong (-10.5%) on the one hand, and steady growth in other markets, such as Japan (+19.5%), Singapore (+26.4%), the United Arab Emirates (+12.7%) and Taiwan (+15.0%). The decline in China is largely due to pandemic measures, particularly the closure of Shanghai in the second quarter. The situation in Hong Kong, which has declined by more than half in eight years (-53.7%), reflects a long-term market adjustment combined with the consequences of the pandemic.
The first months of 2023 continued the trend of the previous year by recording solid growth.
An interesting change can be observed in terms of regions.
As reported by the Federation of the Swiss Watch Industry (FH) in its April report, Swiss watch exports to the United States (-4.9%) recorded their first decline in more than two years. However, the United States remains the largest market for Swiss watches, accounting for the majority of exports in April 2023 (14.9%). The Asian market, on the other hand, resumed its growth, benefiting from trade reopenings; their value more than doubled in China (+107.8%), the trend remained stable in Hong Kong (+15.8%) and more moderate in Japan (+5.4%), while Singapore (-6.3%) declined after 14 months of particularly strong growth. In Europe (+6.0%), the United Kingdom (+9.8%) and France (+18.9%) grew faster than average, while Germany (+1.0%) and Italy (-1.1%) remained at the same level as in April 2022.
The market grew even more in May than it did in April with a 14.4% increase to a total value of 2.3 billion francs.
What has been done during these first five months is extremely positive, the sector's exports have already far exceeded 10 billion francs (with 10.9 billion) and are 11.3% above 2022 levels that had totaled 9.7 billion.
All regions contributed to the overall growth, although some markets experienced moderate declines in May. South Korea registered the most significant decline, with -22.4% in May and -14% since January. The United States quickly overcame the April decline and returned to solid growth of +9.8%. China is the market that has increased its sales the most, up +158.3%, although it is still far from the position it reached before the Shanghai lockdown (-10.1% since May 2021). At the same time, Hong Kong (+19.2%) continued to recover rapidly. Watch exports to Japan (+11.0%) were very solid, producing one of the strongest monthly results. European markets posted an average increase of 8.8%, split between France (-2.9%) on the one hand and Italy (+23.1%) on the other.
All of these figures testify to how well the watch industry is doing. In the last few years growth has been significant, and everything suggests that 2023 can close with even greater results and can establish even greater turnover.
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