Swiss watch exports experienced a significant leap in June, with demand for high-end luxury timepieces from the US and China remaining robust, according to the Federation of the Swiss Watch Industry.
Last month, shipments surged by 14% to 2.4 billion francs ($2.8 billion CAD), underscoring the sustained demand for luxury watches from renowned brands such as Rolex, Omega, Patek Philippe, and Vacheron Constantin. This surge occurred despite concerns that shaky economic growth and higher prices might dampen consumer interest.
In the first half of the year, exports from this key Swiss sector rose 12% to 13.3 billion francs. Last year, shipments reached a record high.
The US, the largest market for Swiss watches, saw an increase of 8.8% in June. This followed an increase in May and a decline in April, the first in over two years. Meanwhile, shipments to China, the second-largest market, rose by 9%.
European markets also experienced a 13% rise in deliveries, with strong demand in Italy and Germany offsetting a decline in Spain and the Netherlands.
The value and volume of exports rose across all price categories, indicating an improving demand for lower-priced watches. Swatch Group AG reported better-than-expected financial results for the first half of the year, with the company’s CEO attributing the performance to demand for less expensive timepieces.
The value of exports for watches priced between 200 and 500 francs rose by 19% last month, while shipments of watches priced between 500 francs and 3,000 francs rose by 8%. Watches in the lowest price category, below 200 francs, increased by 10%, driven by sales of Swatch Group’s Omega MoonSwatch.
Despite concerns about a global economic slowdown, major luxury groups have seen little impact on their watch sales and distribution. Swiss watch exports rose by 14% year-on-year in June, continuing a trend that has seen growth of 11.8% for the first half of 2023, and putting the sector on track to beat its record performance in 2022.
Exports to Hong Kong rose by 46.5% in June, re-establishing its position as a top three market behind Mainland China (exports up 9% in June) and the United States.
The grey market, however, remains a concern. Cooling retail sales in key markets like the United States and UK, while Swiss watch exports continue to rise, suggest improving levels of inventory in the channel. This could mean shorter waiting lists for supply-constrained brands like Rolex and Patek Philippe, but also the potential for inventory build-up and discounted prices on the grey market for brands without supply constraints.
The United States remains the largest market for Swiss watches in the first half of 2023, with exports totalling CHF 2 billion, up 10% on last year. Mainland China is second with exports worth CHF 1.4 billion, up 25%, and Hong Kong is third with exports of CHF 1.25 billion, a rise of 29%.
The Middle East is emerging as a significant market for Swiss watchmakers, with total exports to the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, and Bahrain hitting CHF 1.1 billion in the first six months of 2023, which would place it as the fourth largest market in the world.