The value of Swiss watch exports fell by 16.1 percent in March compared to the same month last year, according to a report released mid-April, just days after Watches & Wonders, by the Federation of the Swiss Watch Industry. The sharp decline, which was equivalent to 380 million Swiss francs and capped a first quarter decrease of 6.3 percent, follows months of retailer reports that consumer demand had cooled.
Exports to China and Hong Kong were particularly hard hit, falling 41.5 percent and 44.2 percent respectively in March. The US, by far the industry’s largest export market, recorded a smaller decline, with exports falling 6.5 percent over the month. The slide in Swiss watches appears to be more pronounced than the wider luxury slowdown. Sector leader LVMH’s total first quarter sales were up 3 percent to €20.7 billion.
“We need to see the evolution in Swiss watch exports in the broader context of luxury demand moderation after post-Covid euphoria,” said Luca Solca, Bernstein’s head of luxury goods research. “The moderation in this category seems greater because of higher exposure to wholesale: the wholesale channel would shift to destocking mode when they see softer demand.”
As the pandemic waned, Swiss watch exports spiked, reaching a record 26.7 billion Swiss francs last year, a year-on-year increase of 7.6 percent. But some argue this has created unrealistic expectations. “A return to 2019 levels of demand would translate into Swiss watch exports of 22 million Swiss francs, which was a high watermark for the entire 2010s decade,” said Rob Cordero, editor-in-chief of the specialist industry title WatchPro.
In a report published last week, RBC Capital Markets forecasted that the Swiss watch industry could contract by 7 percent in 2024, but called it a “post-pandemic normalisation phase.” As well as being geographically diverse, the decline was evident across export price segments.
The higher end, that is watches with an export value above 3,000 Swiss francs, has been a significant growth driver for the industry, with exports in the segment increasing in value by 9.4 percent in 2023 and accounting for 92 percent of the industry’s expansion, according to the FH. But RBC forecasts a high-end segment decrease in value of 10 percent this year, not much better than the 12 percent decline in values in the 500 to 3,000 Swiss franc segment.
“We’ve seen a decline, notably due to the uncertain economic situation in China,” said Yves Bugmann, president of the FH. “The real estate market is under pressure there, which creates insecurity in this market and this phenomenon has an impact on consumer confidence. Other markets however are still positive” Exports to the US, Japan and the UAE all recorded low-level growth in the first three months of the year, but reversing the current downward trend would depend on the Chinese market
Brands and retailers will be nervous of the impact the downturn could have on discounting culture and particularly the grey market, where re-sellers list new watches offloaded by cash-strapped retailers at reduced prices. In 2018, some brands were forced to buy-back unsold stock to counter the rise of discounted new watches on the grey market. Richemont was reported to have destroyed nearly €500 million worth of watches at the time.
According to a Morgan Stanley report analysing the Swiss watch industry, even in a record year, 15 of the top 50 Swiss watch companies saw a decline in revenues in 2023, including Longines at Swatch Group, IWC at Richemont and TAG Heuer at LVMH.
Bugmann pointed to India, where exports in the first quarter increased by 13.2 percent. India has long been identified by analysts as a future growth market for luxury watches, although to date, it’s been a slow burn. But a free-trade agreement is set to reduce import duties on Swiss watches gradually over the next seven years. “India will certainly also give a new strategic importance for Swiss watch exports,” said Bugmann.

Omega Speedmaster 38 mm 18k Moonshine Gold
More from ANALYSIS
Walmart’s 80 dollar Birkin bag knockoff sparks huge controversy
Third-party sellers on Walmart's website recently listed some new handbag styles and social media users were quick to point out the bags …
LVMH’s crown jewel, DIOR at crossroads
LVMH’s crown jewel, DIOR finds itself at a pivotal moment. With Kim Jones set to exit his role as men’s artistic director, …
Luxury fashion and handbags sales are expected to decline by 2027
Several luxury houses, including Saint Laurent, have lowered the retail price of their handbags. To boost their financial results and …