The Hong Kong market for Swiss watch exports grew by 10.9% during 2008 while the US market shrunk by 3% which was enough to see the US toppled from the number one spot it has held for the last decade. The US fell to second place but it is still a market twice as large as Japan in third place. Japan is followed closely by the fourth and fifth largest markets, France and Italy respectively. Compared to 2007, the biggest gains in the value of Swiss watch exports were 43.1% for China, then the United Arab Emirates with 27.6% and Saudi Arabia with 24.0%. Spain showed the biggest decline with 13.5%.
Somewhat surprisingly, 2008 was still a record year for Swiss watch exports with the total value of exports 6.7% higher than 2007, which itself was a record year. The final result doesn’t tell the whole story however with the final quarter of 2008 showing a 7.8% decline as the Global Economic Crisis started to hit home for most markets.
The top 15 markets for Swiss watch exports in 2008 with the percentage variation against 2007 and the total value in million US dollars are:
1. Hong Kong ($2,405, +10.9%)
2. USA ($2,111, -3.0%)
3. Japan ($1,053, -4.5%)
4. France ($1,008, +15.1%)
5. Italy ($932, +2.5%)
6. Germany ($814, +10.2%)
7. China ($736, +43.1%)
8. Singapore ($698, +16.8%)
9. United Arab Emirates ($600, +27.6%)
10. United Kingdom ($571, -2.7%)
11. Spain ($403, -13.5%)
12. Russia ($259, -9.7%)
13. Taiwan ($258, +5.1%)
14. Thailand ($236, +11.8%)
15. Saudi Arabia ($213, +24.0%)
The decline in Swiss watch export values seen in the final quarter of 2008 has continued into 2009. The results for the first two months of 2009 released by The Federation of the Swiss Watch Industry show the value of exports to the US declined 38% against the same two months in 2008. Exports to the US in the month of February 2009 alone fell by nearly a half with a drop of 47.5%. Other markets have fared better however with the next largest market decline being Japan with 13.5%.
It wasn’t doom and gloom across the entire price range. Exports of watches with an export price of more than 3,000 francs (USD $2676 at the time of writing) increased in 2008 by nearly 20%, in contrast to watches with export prices below 3,000 francs. The number of watches exported priced below 3,000 francs and particularly between 500 (USD $446) and 3,000 francs (USD $2676) fell when compared with the 2007 results.
As the economic conditions get tougher, luxury items like luxury watches are seen by middle income earners as purchases that are hard to justify when their personal financial circumstances are less secure. For hign income earners, a high end luxury watch is still relatively affordable and this can be seen by lesser effect on the upper end of the luxury watch export market. It will be interesting to see how long the current difficult times continue before we see a return to overall growth in all the Swiss watch export markets.
It is worth remembering that 2008 was a record year after a number of record years for the Swiss watch industry so declining sales after sustained growth is not an immediate recipe for diaster but most believe that it is unlikely that any export records will be achieved for some time into the future.
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