Unexpected Growth in Swiss Watch Exports Driven by US and Japan Demand
In a surprising turn of events, monthly Swiss watch exports experienced a significant gain in April. This growth was driven by a resurgence in demand for premium and luxury timepieces in both the United States and Japan, which managed to counterbalance ongoing weakness in the Chinese market.
According to the Federation of the Swiss Watch Industry, shipments by value increased by 4.5% to 2.1 billion Swiss francs ($2.3 billion) in April compared to the same month last year. This uptick follows a notable decline in the previous month, with an impressive 11.6% rise in exports to the US— the largest market for Swiss watches— effectively reversing the losses from March.
Jean-Philippe Bertschy, an analyst at Vontobel, described the monthly statistics as “surprisingly strong,” highlighting a robust performance from high-end brands such as Rolex, Patek Philippe, and Cartier. “Other brands, especially in the lower segments, are still in a reset mode after an extravagant post-COVID period,” Bertschy noted in his report.
The unexpected increase comes amidst a backdrop of declining global demand for Swiss timepieces, which had seen an unprecedented surge following the end of pandemic lockdowns in 2021. Since then, factors such as higher interest rates, uncertain economic growth, and geopolitical conflicts have led buyers to become more cautious with their spending. Additionally, the continued strength of the Swiss franc against other currencies has resulted in price hikes in certain markets, further deterring customers.
Shipments to Japan saw a remarkable 13.6% increase, driven by the weak yen boosting sales from tourists. Conversely, demand from China remained lukewarm in April, with exports to this critical market declining by 7.5%.
Notably, shipments of models priced above 3,000 francs continued to excel, with a 7.8% rise in value and a 6.1% increase in units. In contrast, less expensive watches, priced between 500 francs and 3,000 francs, experienced a 10% drop in value.
This report follows better-than-expected quarterly watch sales from Richemont, the luxury conglomerate behind prestigious brands such as Vacheron Constantin, IWC, and Jaeger-LeCoultre. Despite a 4% year-over-year decline in quarterly sales for its specialist watchmaker division, Richemont’s performance has been relatively resilient.
