The Swiss watch industry has a centuries-old history, but has not always been surrounded by the glitz, luxury and glamor that it exudes today. In 1601, Geneva watchmakers banded together to protect their profession from poor working conditions. And it is an industry that was made possible in its early days thanks to cheap foreign labor, particularly Italian women, and is now supported by workers moving in from surrounding areas, particularly the Jura region of France.
To give the industry identity and relevance, the watchmaking guild decided that every watch made in Geneva should bear the manufacturer’s seal. An initiative that was born as a social demand but has evolved over time into a badge of luxury. It is enough to mention brands like Rolex, Omega, Patek Philippe or Audemars Piguet to see the most sought-after and expensive watches in the world (with four, five or six-digit prices) that are only accessible to a minority.
In terms of the number of units sold, the Swiss watch business is not exactly experiencing its best times, but it is in terms of sales, which is due to the increase in prices and the strength of exports. And luxury watches have always been an object of desire, pieces that are 95% made in Switzerland, according to Swissinfo. In general, according to the Chrono24 portal, the Swiss Confederation produces about 30 million watches of all price ranges, which accounts for only 2% of all watches sold worldwide, but their value reaches 60% of the total watches sold.
According to the Association of the Swiss Watch Industry (FH), exports of Swiss wristwatches generated 23.7 billion Swiss francs (27.93 billion euros) last year, 11.6% more than in 2021. A growth that is mainly due to Watches priced at more than 3,000 francs (3,103 euros), whose exports increased by 15.6% compared to 2021. In the same direction went watches made of precious metals, a segment that grew the most, although they only account for 3% of all foreign sales.
But behind the big (and dizzying) numbers lies a less idyllic reality. Despite this increase in settlements, exports per unit have declined over the past 20 years and there appears to be no recovery in sight at present. This was highlighted in recent statements to Bloomberg by Johann Rupert, majority shareholder of Richemont, a Swiss group with brands such as Cartier, IWC and Vacheron Constantin, who highlighted how inflation has gradually affected demand for luxury in Europe. According to him, even the most powerful pockets have begun to tighten their belts. Due to this slowdown, the watch industry exported 15.8 million watches in 2022, only 0.3% more than in 2021, while 30 million were exported in 2000.
Main buyer
When it comes to recipient countries for Swiss precision parts, Singapore, the USA and the United Kingdom are in first place. Other travel destinations that started with modest numbers in recent years have recently shown a clear willingness to buy, such as Malaysia (57.2% increase), Turkey (41.9%) and Spain (25.9%). On the other side of the scale, China and Hong Kong, previously the kings of buying these types of watches, have curbed their desire to flaunt luxury on their wrists. In fact, its imports were reduced by 13.6 and 10.5%, respectively.
As of last August, exports of Swiss watches exceeded 17,000 million Swiss francs (17,590 million euros), 9.2% higher than sales abroad registered in the same period in 2022, according to data from the Association of the Swiss Watch Industry .
According to Swissinfo, around 350 brands claim to carry the Swiss Made label, but in reality the Swiss watch industry is concentrated in a few hands. There are 10 brands that occupy the podium, but of these four stand out, they are the so-called big four of luxury watches: Rolex, Audemars Piguet, Patek Philippe and Richard Mille, none of which wanted to participate in this article. All four are family businesses and have made it – or almost, because Rolex is now in the hands of a foundation set up by the family of founder Hans Wilsdorf, so it is exempt from paying taxes, cannot be divided or sold and does not pay out dividends Dividends – avoid the offerings of the big giants of global luxury.
According to data from the 2022 annual report on luxury watches prepared by investment bank Morgan Stanley and Swiss consulting firm LuxeConsult, the big four generate 42% of this industry’s sales, despite their models, up 5% from 2021, are produced in limited quantities.
Rolex, known as the crown brand, remains the king within this select quartet. It has a turnover of 9,300 million Swiss francs (9,603 million euros) and a market share of 29.2%, figures similar to those of some global fashion houses such as Gucci, but in this case achieved with a single product.
Last summer, Rolex announced an operation that shook the foundations of the global watch industry: the purchase of British jewelry and watch retailer Bucherer, which has more than 100 stores around the world, 53 of which sell Rolex and 48 of which sell Tudor, its secondary brand. in addition to after-sales service.
The other three riders of Swiss watchmaking also have figures in the millions, such as Audemars Piguet with sales of 2,116 million euros last year and a market share of 4.7%; Patek Philippe with sales of 1,895 million and 5.1%; and Richard Mille with 1,369 million and 2.7% of the pie, according to Morgan Stanley.
In addition to these brands, there are large multi-brand trading companies such as the Swatch Group, which generates 69% of the volume of the Swiss watch industry in general and achieved sales of 7.9 billion in 2022, according to the company, 2.5% more than the previous year.
The parent company has found a vein in collaborating with its most exclusive brands. Omega (it is the division that contributes the most to the total value at 2.6 billion) launched the Swatch Moonswatch collection (250 euros) last year to commemorate the arrival of man on the moon with the legendary chronograph. Now Swatch wants to repeat the success with another of its major brands, Blancpain, with which it has just launched a collection dedicated to diving watches.
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