Swiss Watch Exports Register Steady Growth in September
PARIS — The shift to a “normal level of growth” continued for Swiss watch exports in September.
Total exports grew 3.8 percent year-on-year to 2.3 billion Swiss francs, or $2.56 billion, the Federation of the Swiss Watch Industry said Thursday. It described the rise as “comparable to August” and coming despite “a particularly negative base effect.”
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While the monthly gains were slower since the summer, the first nine months of 2023 saw an 8.6 percent rise in exports versus the same prior-year period, a figure “encouraging for the category,” said Piral Dadhania, director of luxury goods and premium brands research at RBC Capital Markets, coming “slightly ahead” of the bank’s 7 to 8 percent expectations for 2023.
Global demand was mixed in September, with timepiece sales to the U.S. and China declining 6.4 and 5.5 percent, respectively. Sales to the third-largest market, Hong Kong, jumped 24 percent, as exports to France, Italy and Taiwan saw high-double-digit growth.
A number of these are top tourist destinations, such as Europe registering a 9.3 percent growth driven by tourist inflows, pointed out Bernstein’s Luca Solca in a research note.
While other major markets like Japan or the U.K. registered modest growth and others like Singapore contracted slightly, at 2.7 percent, the federation noted “the top 20 markets have all maintained steady growth since the start of the year, except for South Korea.” And all eyes will be on the latest entrant, in the 20th position: India.
With export sales of 20.5 million francs, India remains a modest market for now, but a Deloitte study published in October said the country would climb to a top-10 position within the next decade, generating at an estimated 400 million francs of Swiss watch sales.
Overall, for the third consecutive month, sales of the 500- to 3,000-franc price category, which accounted for around one-fifth of all watch exports, was down 10.4 percent. While the summer months were quiet for the top end of the price range, sales of watches costing more than 3,000 francs rose 8.2 percent, and sales of the entry-level range, under 200 francs, grew 4.3 percent in September.
This “barbell” shaped configuration should “read across incrementally positive for the hard luxury sector including Watches of Switzerland, Richmont and Swatch Group,” Dadhania said.
That month, the volume of exported wristwatches declined 2.9 percent, equivalent to 47,000 fewer units leaving Switzerland, but their value increased 4 percent, pointing to a rise in export prices.
Even the 22.5 percent in value and 11.5 percent leaps in volume of the “other metals” category was not enough to offset the contraction in steel watches, which accounted for more than half of all timepieces sold and were down 7.2 percent in value. The “other materials” category, falling 7.1 percent in units, was a major contributing factor to the decline in number of items exported.
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