Swiss watch exports drop in may as China slowdown persists

SWISS watch exports fell in May as a slowdown in demand for premium and luxury timepieces in China and Hong Kong continued.

Shipments dropped 2.2 per cent by value to 2.3 billion Swiss francs (S$3.5 billion) in May from a year earlier, the Federation of the Swiss Watch Industry said on Thursday (Jun 20).

Exports to mainland China, the second-biggest market behind the US, skidded 18 per cent by wholesale value as a downturn in real estate values battered consumer sentiment. Shipments to Hong Kong, a key watch-trading hub, plummeted 23 per cent.

The latest numbers follow a period that has seen demand for pricey timepieces wane after a spike when Covid lockdowns ended. Premium watch buyers have reined in spending amid higher interest rates, shaky economic growth and geopolitical conflicts.

Watchmakers are also suffering from the continued strength of the Swiss franc against other currencies that has spurred price increases in some markets and deterred customers. Following another record in 2023, Swiss watch exports are down 2.5 per cent in the first five months of the year to about 10 billion francs in total.

The decline for last month follows a surprise increase in April, driven by a US revival. May exports to the US were flat.

May’s results underscore the collapse in demand for watches in the mid-price segment, Vontobel analyst Jean-Philippe Bertschy said.

Exports of expensive watches priced above 3,000 francs remained the strongest category last month, dropping just 2.2 per cent in value and 4.2 per cent by number of units.

Swiss watchmakers including Rolex and Patek Philippe have been raising prices and producing more expensive timepieces to keep sales growing amid the downturn.

Shipments of watches with wholesale prices between 500 francs and 3,000 francs fell 16 per cent, while watches with wholesale prices of less than 200 francs, driven by Swatch Group’s Omega and Blancpain collaborations, fell 1.2 per cent by value. BLOOMBERG