The glory is gone! Buying sentiment for Swiss luxury watches plummets, even Rolex warns

Jean-Frédéric Dufour, CEO of Rolex, the top Swiss watchmaker, said in an interview at the Watches and Wonders Geneva show last month that treating luxury watches as an investment target is already extremely risky. This statement reflects the decline of the Swiss watch industry.

Jean-Frédéric Dufour, CEO of Rolex, the top Swiss watchmaker, said in an interview at the Watches and Wonders Geneva show last month that treating luxury watches as an investment target is already extremely risky. The comments reflect the decline of the Swiss watch industry.
Last year, the annual growth rate of Swiss watch exports reached 7.6%, and sales reached a record high of 26.7 billion Swiss francs. But then it ushered in a rapid cooling. According to the latest data released by the Swiss Watch Industry Federation, in March this year, Swiss watch exports increased year-on-year. Shipments dropped 16% to 2 billion Swiss francs, and shipments fell 25% to 1.1 million. Exports in February also dropped 3.8% year-on-year to 2.155 billion Swiss francs, even though January increased 3.1% year-on-year to 1.9 billion Swiss francs.
This year\’s downturn is particularly evident in the Chinese market. Swiss watch exports to the largest market, the United States, fell by 6.5% in March. However, exports to China and Hong Kong, the second and third largest markets, fell sharply by 42% and 44% respectively in February. The export value of Hong Kong and Hong Kong also decreased by 25.4% and 19% respectively year-on-year.
According to public statistics, the number of Swiss watch exports reached a high of 29.75 million pieces in 2011, but then began to decline, falling to 13.78 million pieces in 2020, a drop of more than 50%. Although it rebounded in subsequent years, it was still only half of the peak level.
However, the export value of Swiss watches has shown a steady upward curve, climbing from 16.2 billion Swiss francs in 2010 to 26.7 billion Swiss francs last year.
The reason for this discrepancy between volume and price is that the Swiss watch industry firmly believes that only high-end, high-end and then high-end can completely differentiate its traditional mechanical watches from smart watches.
Therefore, Swiss watch manufacturers relied on constant price increases to turn a consumer product into a luxury product. For example, when Rolex launched a diving watch in 1954, the official price was only a few hundred dollars. However, after countless price increases, today it almost costs RMB 100,000. This has made it almost a tradition for Rolex to adjust global prices on the first day of the new year.
Last year, prices for Patek Philippe, Omega, and Longines increased by more than 10% at least twice.
According to a research report by Morgan Stanley, the luxury level of Swiss watch brands has been increasing in the sales rankings in the past five years.
Facts have also proved that the price increase has a good effect. Last year, the sales of Rolex alone reached about 11.5 billion US dollars, and the sales of 6 Swiss watch brands exceeded 10 billion yuan.
However, due to changes in Chinese people\’s consumption habits and the evolution of global politics, economy and culture, this kind of \”jewelry-like product\” with luxury attributes has gradually fallen out of favor.
More than half of Swiss watch company executives predict that China\’s watch market will decline or stagnate this year.
According to data from the General Administration of Customs of China, Swiss watch imports in the first quarter of this year have quickly fallen back to pre-2021 levels.
China briefly won the title of the largest exporter of Swiss watches in 2020, but in the past three years, the United States has become the largest consumer of Swiss watches.
According to the \”Global Luxury Report 2023\” released by Bain & Company, Chinese consumers are expected to contribute 35% to 40% of sales to the personal luxury goods market by 2030. However, how much of this is contributed by luxury watches is still a question mark.
The report points out that the biggest factor affecting sales comes from the generational changes in the customer base of luxury watches. As Generation Z enters the main consumer circle and Millennials even become the new generation of consumers, the influence of luxury watch culture on these generations who grew up with electronic products is increasing. decline.
In addition, China has now entered the era of cost-effective consumption. Nick Hayek, CEO of Swatch Group, made it clear in a recent interview that Chinese consumers are becoming more and more sensitive to the price of luxury goods.
After losing its timekeeping attributes and frequently increasing prices, luxury watches have become far away from the word \”cost-effectiveness\”.
In a practical China, this means that more and more people will give up consumption.
Therefore, even the trend of luxury watches in 2023, which was extremely optimistic about consumption expectations, is weaker than that of other luxury goods. The Bain & Company report also shows that in terms of the entire consumption of luxury goods in China, the annual growth rate of watches last year was the smallest and far lower than that of fashion, Jewelry, leather goods and beauty.

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