Projections and trends are an important factor for any timepiece creator, especially when the turmoil of world events gives rise to changes in all markets, with recessions and reductions in consumer spending becoming a realization, forecasts become increasingly harder to make. By reviewing the trends up to the mid-year point of 2024, in the midst of some of the biggest world history events still currently taking place, we can see where the industry is leading and where markets are seeing some decline.
For a niche industry, focused on the functionality and elegance of timekeeping for the working-class individuals around the world, there have been some markers of gross profit share reductions and fluctuations between markets with Europe seeing a -1.1% reduction in overall sales while holding a 30.2% share in the Swiss watch industry. While, Africa, only holding on to a meagre 0.5% market share, finds its overall gross share reduced by a whopping 20.7% from 2023. The only region holding strong by this mid-year projection is the States, with an overall increase of 3.8%, since the last reported figures in 2023.
In the sections below, we’ll gloss over some of the finer details of how the watch industry has performed globally compared to previous years, keeping in mind that we’re only in the mid-year portion of 2024.
EXECUTIVE SUMMARY
For the First half of 2024, the Swiss watch industry has been presented with some challenges, with visible global declines in exports by 3.3% compared to the same period of 2023. You’ll notice in the table above; Regional changes, illustrated in CHF (Swiss francs), have shown significant changes save for the USA and the UK, with a 6.5% increase and 2.3% decrease, respectively.
Japan, leading a respectful positive stance with a 13.2% change. Following the data provided by the Federation of the Swiss Watch Industry, we can establish a 12.9 billion CHF export exchange for global markets. With some further analysis of key market trends and overall performance for the first two quarters of 2024, as of July, we can take a deeper look into where the market has been affected the most and draw on economical conclusions and possible resolutions for the second half of the year.
YEAR BY YEAR COMPARISON – GLOBAL
Following the market distribution table above for watch exports, immediately, it’s visible that although global markets have seen significant increase since 2022 for the same period, for most of the markets, the progression of this trend has fallen short for the majority from expected growth projections from 2023 to 2024. Only a handful, out of the 30 countries have shown a steady increase when comparing the variants of 2022, 2023 and 2024. Keep in mind that those 30 countries are representing the majority of luxury watch sales in the world, catering to different clientele, such as diving watches, dress watches, racing watches and other popular categories in the watch industries.
With a softening of the market in exports, only the Far East seems to be showing an increased inclining share of global exports, grabbing greater portions of the market than expected. All while the USA hold a semi-steady increase, also holding over 2.1 billion in global sales. It’s always great to see some unexpected entries in the race for market share like Mexico, showing an astronomical growth of over 33.8% from 2022 to 2024, stabilizing to a humble 20.5% difference from 2023 to 2024. While they may only hold 165.2 million in market share, it shows some positive growth and reassuring growth for an exchange rate that leaves something to be desired against major global currencies like the Dollar, Euro and the Pound.
However, for a region like China and Hong Kong to show such a heavy decrease, both being well known as major manufacturing hubs of Asia, it shows that their presence in the luxury watch export market is waning, both losing just over and under 20% of their gross market share from 2023.
We’ll look in to the regions a little more closely in the next section, with some feedback on the market trend for this 2024 mid-year luxury watch industry analysis.
GLOBAL OVERVIEW
ASIA – LEADING THE CHARGE, DESPITE THE RED FLAGS
Despite some challenges maintaining their position in the top three continents for luxury watch exports, they’ve still managed to keep themselves in the running. Although countries like China and Hong Kong losing much of their share in the global exports of luxury watches from 2022 to 2024, Asia accounts for 47.7% of the total exports. With significant headwinds, Asia has weathered the storm of global economic upheaval felt the world round from the war between Russia and Ukraine, even more so with being on the doorstep, the true question is, will it last while we’re into the second half of 2024 going into 2025, respectively.
With some of Asia’s most influential timepiece crafting masterminds behind the wheel of Asia’s growth in the global watch export market, Brands like Omega, Jaeger-LeCoultre, Patek Phillipe, Rolex, IWC and more have become coveted timepieces within Asia’s burgeoning market for Swiss luxury brands. With speculative increases of up to 2.93% per year, Asia is in good standing to keep their position on the Swiss luxury brand leader board.
However, Asia totals out to 6,148.6 million CHF for the first half of 2024, with a year-on-year change of -7%, with China and Hong Kong weighing down the average for the continent. Despite this many other Asian countries have shown resilience against the weakness of it’s global share, and with some hope they can make up for the apparent decline in China and Hong Kong.
EUROPE: GRIPPING TIGHTLY, BUT SLIPPING SLOWLY
With taking in account all of the countries in Europe, the continent continues to maintain itself as the second-largest luxury watch market. The highlights of early 2024 have had some resounding negative effects on the European economy, with so many providing assistance to Ukraine, it’s understandable for the market to suffer. After all, if a country suffers from economic problems, so does its people. Despite the large immigration disputes and illegal immigrants fleeing into major parts of Europe, seeking asylum, which affects employment, imports, exports and has promoted some social unrest, Europe has managed to only show a year-on-year change of -1.1% with a total value of 3,890.8 million CHF. Europe manages to maintain a 30.2% hold on the global market share.
Despite the decline, the European Union has managed to maintain a level of stability as a whole, regardless of the minor decline in luxury watch market.
AMERICA – A BEACON OF GROWTH
North America has emerged in 2024 with some defining growth in the market, peaking out at 3.8% year-on-year change, with the remainder of 2024 still left to go, there I still plenty room for that to change. Proving to drive the market, while other area’s have seen some downwind, lends some stability to the ever growing and improving art of timepiece creation. America saw a total value of 2,580.5 million CHF in exports and sales with a respectable market share of 20%, out of the global market share. As a beacon, America leads the charge to offset the declines we’ve seen in other regions.
MIDDLE EAST – ROOM FOR GROWTH IN 2024
The Middle East, which lends to thoughts of Dubai, and other highly sophisticated and exceptionally wealthy regions, managed to find itself on a small but noticeable decline in the market, with -1,5% and 1,241.7 million CHF in revenue. The Middle East is a well-known hub for its ingenuity, technology and appreciation of the classics in style and elegance granted by the luxury brand market. With all that has been said, perhaps the decline can be derived from changes in consumer behaviours or demand.
OCEANIA – RECESSION OR CREDIT CONTROL
Oceania saw a year-on-year change of -3.9% with an overall revenue of 203.3 million CHF. With many countries in the Oceania borders fall short with the currency conversion rate for Swiss luxury brands, it is expected that the market would be fairly small compared to the titans in the industry. Regions such as Indonesia have a very acute ratio of wealth to approach with this industry and many others very much the same. However, the decline does show some significant instability for the industry in the region, likely due to the strength of the Swiss franc to local Oceania currencies, save for Australia and New Zealand’s cities.
AFRICA – MAJOR HEADWINS AND NO HANDHOLD
With many countries in Africa in some kind of civil turmoil and social unrest, even the wealthier countries in Africa fall very short in the race of currency conversion with the Swiss franc. Not to mention the unprecedented unemployment rates and unbalanced wealth in many regions, luxury brands are mostly for the exceptionally wealthy. With this in mind, Africa has seen a whopping -20.7% decrease in year-to-year change with only 68 million CHF in revenue for the period. Africa still has plenty of room to grow in the industry, and may still yet show an uprising turn by end the end of 2024.
ANALYSING THE TOP MARKETS
United States
With an overall two-year change of 13.7% from 2022 to 2024, The United States has proven itself to be a promising Country for the Swiss luxury market, with potential to grow even more in this year and years to come.
China
Although their year-on-year change leaves little to be desired, their two-year decline was only –1.7%, still leaving some hope for the Swiss watch industry for China. The overall positive change may only happen within the next two years, but considering the level of enthusiasm for Swiss watch brands, the trend could change in their favour within the next few years.
Hong Kong
Hong Kong may have seen a large year-to-year change when comparing 2023 to the current period but overall, over two years the market has managed to see a 3.6% increase from 2022, leaning on the eventuality that the market will return to a stable condition and possibly even improve.
Japan
With the culture of sophistication and at the peak of technologic advances, Japan can appreciate their overall two-year change at 14.1%, nearly double that of it’s one-year change from 2023. Their appreciation of the art in timepiece engineering, well routed with the many numbers of movements created and designed in Japan for many watches and devices to date. While the yen may be weaker, tourism is booming in the country, lending to a burgeoning Swiss watch industry for the country.
Singapore
The Singapore Swiss watch market has seen an excellent two-year change, nearly twenty times the one-year change seen between 2023 and 2024. The signs of continued growth are evident and is establishing itself as the perfect hub for the Swiss watch market in Southeast Asia.
ANALYSING THE TREND
All the numbers may seem a little much so in this section we’ll take a look at the price segment trends and what they mean for the world of Swiss luxury watches:
Watches prices over 3,000 CHF (Export price), despite being the types of watches only the exceptionally wealthy buy has managed to only lose 0.5% for the first half of 2024, with the overall change still perhaps leaning towards a more positive end of year percentile with much of the longer Holiday seasons to come.
The 500-300 CHF segment severely impacted 80% of the overall decline in June, still leaving a flicker of hope for the more prominent markets to pick up the slack.
Lower tiered price segments, specifically below 500 CHF, have experienced a substantial decline, in both value and units.
These trends suggest an unbalancing in the market, with high-end luxury watches maintain their consumer appeal, while mid-ranged timepieces face challenges.
TRENDS AND KEY FACTORS
Economy – Turbulent Ripples
The Global economy has had some scares with increasing inflation, signs of an impending recession looming on the horizon. Price increases caused by the ripples in Asia and Europe have also heavily influenced markets around the world. Recession is as naturally occurring to economies nowadays as pandemics, all thanks to the ever growing population and demand. When industries are reliant on so many factors for their pricing, the ripples are felt globally when they’re influenced negatively, like oil, gas and even crop yields.
China – The Industry Giant’s Slowdown
Market changes in China have caused ripples in the industry, affecting many neighbouring regions as well, including Hong Kong. Being a hub of technology and manufacturing China heavily influences neighbouring markets. India, Singapore and other neighbouring countries have never really been seen as wealthy countries, with only a small minority in the exceptionally wealthy bracket. Asia as a whole has always been the manufacturing hub of the world, with the industrious spirits in Asia affecting industries, with China being a good contender in technology and engineering.
Despite the industrial power of Asia, thanks to recent events, many countries are looking more towards locally sourced products or alternatives, ultimately affecting the hold Asia has had in the industrial sector. This still hold true as of now, however trends do suggest some significant changes in coming years.
Currency – The Swiss franc vs The World
The Swiss franc has seen significant increase in value compared to other currencies and may be the cause of some decline in certain regions with currencies with a higher conversion rate. It’s important to note though that the Swiss bank interest rate is very low compared major currencies around the world, however for Switzerland these interest rates are seen as rather high.
Switzerland also has very few issues with credit control measures, with most of their citizens maintaining a very positive credit score, an expected outcome for a country so closely associated with precision and efficiency.
Consumers – Needs, Wants and Desires.
The shift in consumer preference for high-end, high quality luxury watches may lend itself heavily to the decline in overall revenue generation. Many consumers preferring to vouch on quality then quantity, whereas that level of quality is expensive to roll out. Many brands, including micro-brands are opting for high-quality stainless steel casing, highly accurate movements and timepieces that can endure moderate to extreme weather conditions.
Tourism – Recovering tourist Industries
Japan, amongst other countries are still reeling financially from the expansive burden that was Covid-19 when a lot of countries made the decision to have a lockdown. However, now many countries are recovering and their markets are showing growth again with the arrival of tourists to boost the industry. Japanese culture has always fascinated many people around the world, but its also their ingenuity and foresight that makes them a country to keep an eye on not only in the timepiece industry but others as well.
OUTLOOK FOR THE REMAINDER OF 2024
The first half of 2024 has had its challenges with plenty signs of resilience in the industry for key markets from slight fluctuations to drastic changes between the one and two-year changes.
America has shown continued growth with a strong performance in the US market, with expected increases for future periods offsetting potentially weaknesses in other regions.
China’s economy will show significant stabilization with the reduction of travel restrictions helping alleviate these deficits in industry potential.
High end, High Quality; The continually increasing demand for quality assurance checks, materials and workmanship levels many watches to be on the pricier side of the market, some even reach over 3000 CHF. High-End manufacturers may be the cause of some of the dispersing on lower end watches with revenue, while they focus on providing higher-end materials, mirroring the price.
With the Dispersion in market strengths, and emerging markets presenting themselves, brand may feel the need to broaden their horizons and market their timepieces in other markets more suited to the specifics of their brand, like pricing, style and others.
The luxury watch industry is undoubtedly well invested in the technological advancements of their respective watch brands, with aims to improve appeal to changing consumer preferences.
CONCLUSION
The Swiss watch industry is bound to face some uncertain economic circumstances and challenges in 2024, with global exports and revenue declining by 3.3% for the first part of the year. Traditionally, China and Hong Kong would be the powerhouses of the luxury watch industry but with the recent changes in their exports and circumstances leads to a significant windfall. The United States and Japan stand a good chance at being contenders on the luxury brand stage. With the perpetual growth being exhibited in the States, and Japan, it would be accurate to say that there is still a point of optimism for the Swiss luxury brand, and where one might fall, another with stand up taller.
With the overall resilience of the market, foregoing the negatives changes seen for several regions, there is still good suggestive evidence to prove that luxury watches are still viewed as valued assets and status symbol.
While we see fluctuations in this market of today, the key to grasping a hold of the market is customizing the luxury brand to the customer preferences while successfully balancing their global presence by the technologies and strategies well established in the industry. If mortar and brick store fronts could focus their attention on transforming their business model to a digital platform, they would be able to navigate the ever-evolving market landscape.
*This report is based on data and information provided by the Federation of the Swiss Watch Industry (FH) as of July 2024.