The Deloitte Swiss Watch Industry Study is in its tenth edition and is based on an online survey of 75 senior executives in the industry, interviews with industry experts, and an online survey of 6,045 consumers in the Swiss market and top export markets for Swiss watches. The study is independent and provides a holistic industry assessment comprising diverse points of view. This year the study also includes a specific section on the growing Indian market.
Export Numbers
In 2022 the Swiss watch industry experienced a record high in exports, with a 14% increase from pre-pandemic figures. Despite on-and-off lockdowns in China, Chinese consumers remained key while the U.S. remained the biggest single market. The end of 2022 was challenging due to an energy crisis and falls in global stock markets and cryptocurrencies. In 2023 inflation impacted many consumers worldwide and the Swiss franc continued to appreciate against major currencies, making Swiss watches more expensive for international buyers. Nonetheless, watch exports increased in volume and value during the first eight months of the year.
Watch Markets
The top 10 export markets for the Swiss watch industry continued to grow in the first eight months of 2023, with the U.S. remaining dominant and China seeing similar growth. Exports to Hong Kong were strong but still not at pre-2019 levels due to severe pandemic lockdowns. India has also seen a healthy increase in exports. Despite the growth, exports to China are still down by 7.5% compared to 2021 levels.
Priorities
Swiss watch industry executives' priorities for the next 12 months differ between brands and component manufacturers. Brands' top priorities include introducing new products, developing or strengthening their omnichannel strategy and investing in sustainability. Component manufacturers are focusing on increasing capital expenditure and production capacity in Switzerland. Brands catering to the price segment below CHF 5,000 have a stronger focus on introducing new products, while mid-range and high-end brands are prioritising increased production capacity in Switzerland to help mitigate future risks. No respondents are making increased production capacity abroad a priority.
Concerns
Geopolitical uncertainty and inflation coupled with the cost-of-living crisis are the biggest challenges facing the Swiss watch industry, according to executives surveyed. Shortage of qualified labor is also a concern, with 4,000 professionals needed to be recruited and trained by 2026. Brands are investing in their current and future talent, with Adecco Switzerland founding the Watch Academy in Geneva. Inflation is not expected to impact consumers likely to purchase luxury timepieces, but consumers buying in the sub-CHF 500 range may be affected. Demand far exceeds supply, particularly in the higher price segment, and insufficient supply of parts and movements are exacerbating delays.
Outlook
Swiss watch executives are optimistic about the Swiss economy and export markets, but less confident about the industry's prospects than they were a year ago. 44% of executives are optimistic about the industry, while 25% expect a negative year ahead. India is seen as the most promising market, with 75% of executives expecting growth. China's prospects are split, with 49% expecting growth and 51% assuming stagnation or decline due to the prolonged Covid-19 hangover and wobbly recovery. The Middle East and North America are also expected to grow, while most European countries in the Top 30 markets have seen high single- or double digit growth in terms of the values exported.
Key Findings
Experience over convenience
Experience over convenience
Brands are enhancing the in-person experience – at retail outlets, watch fairs and auctions – to interact closely and sell directly to customers. While new customers will initially engage with brands online, these spaces will evolve into storytelling hubs and information sources. The personal connection, relationship building and face-to-face brand experience will outclass the convenience of the digital space, especially for mid-market and luxury timepieces. Price conscious yet curious Of those consumers willing to buy a preowned watch, 22% would be willing to spend between CHF 1,500 – CHF 15,000.
Greening priorities from the inside out
Greening priorities from the inside out
External pressures have given way to internal priorities. This year brands and retailers are investing more in sustainability because it’s part of their corporate strategy and identity, rather than doing so because of consumer pressure or concerns about brand image.
Augmenting their reality
Augmenting their reality
The traditional industry continues to embrace innovation. Over half (52%) of executives surveyed plan to use Generative AI to create content for written publications and reports in the coming year, with approximately one quarter only considering it for brand campaigns/ marketing purposes and to support the creative process.
India, incredible India
India, incredible India
This was the first year India was mentioned so frequently as the next big growth market for the Swiss watch industry. By 2028, we predict that export sales of Swiss watches in India will reach over CHF 400 million. We think that India will be in the top 10 of Swiss export markets within a decade.
Price conscious yet curious
Price conscious yet curious
Of those consumers willing to buy a pre-owned watch, 22% would be willing to spend between CHF 1,500 – CHF 15,000. While not grail watch territory, it’s a healthy range to sustain further growth in the secondary market, which more consumers are now interested in timepieces. Greening priorities from the inside out External pressures have given way to internal priorities. This year brands and retailers are investing more in sustainability because it’s part of their corporate strategy and identity, rather than doing so because of consumer pressure or concerns about brand image.
From scrolling to selling
From scrolling to selling
Social selling will become a key sub-channel for the industry due to its ability to offer personalised recommendations and instant purchasing through connected apps and mobile payment options, particularly for younger consumers. Already well established in Asia, social commerce offers a unique blend of buying, community and trust, turning screen time into an instantly gratifying, shoppable experience.
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Karine Szegedi
Karine is the Consumer industry lead, Audit Partner, Swiss Fashion & Luxury head and member of Deloitte Switzerland’s Executive committee. She has over 25 years of experience advising Swiss listed companies, multinationals, family businesses and start-ups, as well as leading global audit engagements. Besides her expertise on topics affecting consumer clients, she is also experienced in financial reorganisation, shared services centres and bond issuances. Karine is the co-author of the world renown Deloitte’s Swiss watch industry study and is frequently interviewed on topics spanning fashion, luxury, watches, retail trends and consumer behaviour by national and international media including the Financial Times, Handelszeitung, New York Times, Le Temps and Vogue Business among others. She co-hosts Deloitte’s Luxury On Air podcast, moderates industry webinars and participates in international conferences. She is a board member of EXPERTsuisse, part of the Swiss-American Chamber of Commerce, Career Women’s Forum and an alumnae of American Swiss Foundation’s Young Leaders. Karine is a Swiss certified accountant and licenced auditor.