The Deloitte Swiss Watch Industry Study 2017

It's all about digital

The Swiss watch industry has started to recover since spring 2017. Exports rose in Q2 by 3% compared to 2016. The sixth edition of the Swiss Watch Industry Study sees this trend continuing. A majority of Swiss watch executives surveyed are optimistic about the outlook for the Swiss watch industry and the main export markets over the next 12 months.

The Swiss Watch Industry Study 2017 is based on an online survey among more than 60 watch executives and a consumer survey which was conducted among 4,500 people living in China, Italy, Germany, Japan, Switzerland and the US.

Highlights

Key Insights

Industry overview

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Industry outlook

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Swiss-Made legislation

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Digital channels

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Smartwatches

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Industry overview

The Swiss Watch Industry shows first signs of recovery. In Q2 2017, watch exports were worth CHF 5.0 billion, compared to CHF 4.8 billion in Q2 2016 (+3%). There has been a strong recovery of watch exports to China in particular with double-digit growth rates since Q4 2016. After a sharp downward trend from Q2 2015 to Q4 2016, watch exports to Hong Kong, the most important export market for Swiss watches, stagnated in Q1 2017 and slightly rose in Q2 (+1%).

Industry outlook

Swiss watch executives surveyed are now more optimistic about the future and think the recent positive change of trend should continue. 52% of respondents have indeed a positive growth outlook for the Swiss watch industry in the next 12 months, up from 2% in 2016. Only 15% consider the outlook to be negative. In 2016 this number was 82%. There is also growing optimism about the outlook for the Swiss economy and the main export markets.

Swiss-Made legislation

Twice as many watch executives (44%) consider the impact of the revised Swiss Made rules to be positive rather than negative for the industry. The new rules will not necessarily bring production back to Switzerland but are essential to maintain the undisputed leadership in the luxury watch market.

Digital channels

The fact that a large proportion of offline purchases are influenced by what the consumer has discovered digitally is also true for the luxury and watch industry. Many customers do not want to miss the experience of visiting a boutique, see the watch pieces in person, look at the material and touch it. According to our consumer survey that was conducted in six countries among a total of 4,500 consumers, the vast majority of people surveyed are still likely to buy a watch in-store. At the same time 60% of consumers use online and digital channels to research watches before they go in-store e.g. to check prices or find product information.

Smartwatches

Even though Apple continues to grow its offering and other players announce partnerships to gain market share, Swiss watch executives do not see smartwatches as a threat to their business, 72% do not expect them to have an impact on their sales and 14% see smartwatches as an opportunity. However, perception could differ depending on the target audience of the brand, its price positioning and development strategy.

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The Deloitte Swiss Watch Industry Study 2016, Navigating through stormy waters
The Deloitte Swiss Watch Industry Study 2015, Uncertain times
The Deloitte Swiss Watch Industry Study 2014, Changing times
The Deloitte Swiss Watch Industry Study 2013, Time for the future