Swiss Watch Industry Study 2017


Swiss Watch Industry Study 2017

The Swiss watch industry shows first signs of recovery with a rise of watch exports in Q2 2017 to CHF 5.0 billion from CHF 4.8 billion in 2016 after 20 consecutive months of negative growth rates. Yet, this growth is relative and primarily reflects a recovery of mechanical watches while quartz watches continued to decline. Overall, volumes of wristwatches were still down.

Swiss watchmakers bank on digitalisation to unlock new opportunities

According to the Deloitte Swiss Watch Industry Study 2017, digital is at the heart of the Swiss watchmakers’ business strategies. Optimism is back; more than half of watch executives surveyed are optimistic about the future of the Swiss watch industry for the next 12 months, compared to only 2% last year. The market remains challenging, but the industry is tackling its transformation with Digital, the introduction of new products and Smartwatches as ingredients of the change.

A return to optimism

The growing optimism about the outlook for the Swiss watch industry is second highest since the first Deloitte Swiss Watch Industry Study was published in 2012, peaking at 52 % (compared to only 2% in 2016). While 61% of watch executives consider the outlook for the main export markets of the Swiss watch industry, such as China, Hong Kong and the US, to be positive in the next 12 months.

With double-digit growth rates in the last quarters, China recorded the strongest recovery in watch exports followed by Europe (9% in Q2 2017 compared to Q2 2016). After a sharp downward trend, Hong Kong finally showed signs of stabilisation with a slight increase in Q2 2017 (+1%). This upbeat is not surprising given the higher expectations for growth in almost all regions, especially in Asia. When asked about their growth expectations 71% watch executives see a positive outlook for China and the rest of Asia. A large majority of respondents (68%) still consider that the US market could grow in the next 12 months, making it the third most promising watch market.

External risk factors remain strong

With the implementation of the new Swiss Made rules in early 2017, requiring at least 60% of a watch’s manufacturing costs to be incurred in Switzerland, a new factor has found its way into the top five risks (25%). Only 57% of the watch executives surveyed name weaker foreign demand as a key risk to their business, down from 79% in 2016. The strong Swiss Franc remains also a significant concern, even though it is considered less important than in 2016 (46% in 2017 vs. 50% in 2016). The threat of smartwatches, with less than a quarter (23%) listing that trend as a risk has remained relatively stable compared to 21% in 2016.

Digital is key

For the first time since the Swiss Watch Industry Study was launched in 2012, “Developing e-commerce and digital channels” was a new answer option for the business strategies. 55% of watch executives see it as a major priority, making it the second priority after introduction of new products (64%, slightly down from 69% in 2016). The growing importance of having a digital strategy is not surprising given the overall luxury market transformation. Online retail sales are growing much faster than overall revenues. Until recently many Swiss watch brands had tended to be reluctant to adopt online sales channels; however this no longer seems to be the case.

However, these days digital includes much more than just online sales. Increasing customer connectivity expands the digital influence to offline shopping. Deloitte’s online consumer survey conducted among 4,500 people in six countries[1] shows that a substantial majority of people surveyed are still likely to buy a watch in-store, although in Germany already half of the respondents would consider buying a watch online. The use of digital has also become key to Swiss watch companies’ marketing strategies. In 2017 social media remains the most important marketing channel, followed by having a dedicated team for social community management which has overtaken bloggers.

Smartwatches not perceived as a threat

Even though Apple continues to grow its offering and other players announce partnerships with large sport brands to gain market share, Swiss watch executives do not see smartwatches as a threat to their business. A large majority (72%) do not expect them to have an impact on their sales and 14% see smartwatches as an opportunity.

Swiss Watch Industry Study 2017
Fanden Sie diese Information hilfreich?