Swiss Watch Exports Continue to Decline
The bad news just keeps coming for Swiss watch makers as sales continue to plummet in Asian markets. The Apple Watch is just one of the factors blamed for the decline.
On Tuesday, the Federation of the Swiss Watch industry released a report showing watch exports were down 8.5 percent for the third quarter of 2015 following a drop of 10 percent in July and 9.9 percent in September. These are the largest drops in Swiss watch exports since the worldwide recession of 2007-2008.
According to the Federation, “After May and July, September is the third month to show a marked decline in Swiss watch exports. This negative change has spread to other, hitherto more robust Asian markets, and casts something of a shadow over prospects for the year 2015.”
The biggest drop occurred in Asia, where sales declined 12.7 percent in September with major dives in Hong Kong, China, Singapore, South Korea and Taiwan. Factors in this decline include poor comparables in 2014 and the SARS virus epidemic from earlier in 2015.
Although all price categories experiences significant declines, moderately priced watches took the biggest hit with timepieces in the 200-500 franc range dropping 14.5 percent. The Apple Watch, which may be siphoning off sales from comparably priced traditional Swiss watches, is taking some of the blame for this decline.
The market for Swiss luxury watches has bounced back in the past but some experts find the latest figures unusually ominous. One of them is analyst Patrik Schwendimann of Zuercher Kantonabank in Zurich. “The main reason for the drop are the Chinese, whose demand has declined locally with Hong Kong and mainland China, and now obviously also on a global level as they don’t buy as many watches while traveling anymore,” he stated.
“My biggest worry is how it’s going to be going forward: is it just temporary, or could it worsen?” Only time will tell.