INSIDER VIEW: Salad days could be around the corner
This year is one of consolidation for the Swiss watch industry.
Hopes that 2026 would be a significant ‘bounceback year’ were somewhat thwarted when images were shared globally of a luxury Dubai hotel ablaze back in February, as part of the ongoing Middle Eastern conflict. It’s an image that the city may take years to recover from, which will stifle a key market for luxury watch sales.
But nor are we in ‘end of days’ territory. Beware anyone making such a claim and ask yourself whether truth motivates them more than clicks.
Numbers and data are not emotional; they’re black and white. Yes, the context and interpretation of facts can be nuanced and split opinion, but sticking purely to empirical evidence rarely leads to rogue conclusions.
Total global Swiss exports peaked (in nominal terms) in 2023, with sales value reaching about CHF 26.7 billion. Despite the doom and gloom that we’ve heard from some quarters in the following two years, the actual number for total global Swiss exports in 2024 was CHF 26 billion, and was CHF 25.6 billion last year. It’s not far off a rounding error, in terms of the supposed decline.
Against this backdrop of attempting to instil some calm into the macro outlook of the state of the watch industry, what is likely of most interest for manufacturers is to know where, geographically, to focus resources and energy. Everyone wants to be maximising an opportunity in a booming market, but often these territories have likely hit something of a ceiling and are at saturation point.
It’s why investors like to have a couple of dark horses up their sleeve, which may offer eye-watering returns on their money, and not just safe bets.
One way of trying to work out which countries are ‘underperforming’ or not is to look at Swiss watch exports to countries per capita, rather than as a raw number. What does this tell us?
Looking at the top 10 countries for Swiss watch exports and including India — no-one can deny that India is the surging force in luxury right now — both China and India stand out like sore thumbs. Based on the most recent data for the month of June, each Chinese citizen accounted for one tenth of a Swiss Franc, based on Swiss exports numbers. In India it’s even lower, at just one fiftieth of a Swiss Franc.
Compare this with Singapore, where the number per head of population is 26 Swiss Francs, or in Hong Kong, where it’s 21 Swiss Francs.
As mentioned above, there is context and nuance to such comparisons, including fundamental cultural, political, and economic differences. Clearly, expectations for growth in a region like sub-Saharan African should be muted compared with those in the West, irrespective of Swiss exports per capita. But in China and India in particular — where there are estimated to be over 6 million and almost 1 million millionaires, respectively — it’s reasonable to say that there is scope for significant growth.
A less likely country to flag up for underperformance is the USA. Yes, it’s been the dominant market in the watch world for years now, and its share of total watch exports is almost 15%. But in June each American represented 1 Swiss Franc, based on Swiss watch export data. This isn’t bad, but lags behind every other major Western country. The UK’s number is 2.5, Japan’s is 1.4, and even Germany’s is 1.3, despite having had its own struggles in the past couple of years.
In other words, there’s every reason to believe that we’ve not seen the best of the US market yet, which should be a fillip for all watch brands who have a presence in the land of the free. If it even got up to Germany’s level of Swiss watch exports per capita, then the biggest market in the world for watches would grow by 30%.
In a world of pessimism and risk aversion, the prospect of the best days still being to come for the American, Indian, and Chinese watch markets is the realistic tonic we all need.
