The Strategist

Switzerland builds up export of watches

11/22/2017 - 03:22

Export of watches from Switzerland in October 2017 increased by 9.3% compared with the same month a year earlier - to 1.85 billion Swiss francs ($ 1.86 billion), according to the Federation of the Swiss watch industry. The growth of watch exports has been persisting for the sixth month in a row, and the growth rate became the highest since January 2013.

Deliveries of Swiss watches to Hong Kong in October jumped by 15.8%, to China - by 18.2%, to Japan - by 21.7%, to the UK - by 1.2%. In the meantime, the export of watches in the US declined by 7.3%, to Italy - by 0.7%. The share of watches accounts for about 10% of Swiss exports.

It is becoming increasingly clear that Swiss watch manufacturers no longer see threats from companies that produce "smart" devices. "I do not want to criticize these people [manufacturers of electronic devices]. But I believe that they are selling just technology, yet this is not enough. People need emotions, dreams", says Jean-Claude Biver, head of the watch business Tag Heuer and LVMH.

Smart watches are interesting for those involved in sports, said Tissot’s President François Thiébaud. Yet, a wristwatch is a product associated with emotions. "You will never forget your first watches. But people do not usually store the first smart watches, "he says. "Why should people put on a computer?" Biver echoed him.

Smart watches can even spur the demand for mechanical, the industry hopes. "Many young people do not wear watches at all, they have smartphones and tablets. Maybe smart watches will teach them to put something on their wrists", says Thiébaud.

Unlike Swiss watches, which can serve several generations, new products have a life cycle of six months to a year, told reporters Nick Hayek, CEO of Swatch Group.

In turn, Juniper Research suggested that blunt watches-hybrids are now responsible for the potential growth of the smart watch market. Technically, these are ordinary watches with some additions, such as a pedometer or contactless payment function. Their share is now 30%.

In general, the volume of exports from Switzerland in real terms in October decreased by 1.8% compared to the previous month, according to customs data. Import fell by 1.1% compared to September.

The surplus of the country's trade balance in October fell to 2.33 billion francs compared to 2.92 billion francs a month earlier. The export of gold from Switzerland last month decreased by 5.8% compared to September - to 139.9 tons from 148.4 tons.

Deliveries of precious metals to India tripled in October, reaching 38.1 tons, to China - almost doubled, to 34.5 tons, to Hong Kong - 71%, to 19.7 tons, to the UK - down 86%, to 9,5 tons.

The import of gold from Switzerland decreased by 35% - to 132.6 tons, the minimum level since August 2014. The volume of imports of precious metals from the UK practically did not change over the month, reaching 0.3 tons.