The Italian outbreak of coronavirus dooms Baselworld. The map tells the tale. It’s 193.4 miles between Codogno – center of Italy’s coronavirus outbreak – and Basel, Switzerland. As we’ve predicted, it’s all over bar the official announcement. It’s important to note that the coronavirus was only the final nail in the event’s coffin . . .
Large industry conventions are a dead genre walking. The costs of mounting a stand at a major event – be it the SHOT Show or Baselworld – are enormous. The costs to attend aren’t cheap either. The return-on-investment for both exhibitor and attendee is lousy – especially in the internet age, where marketing costs are minimal.
Watchmakers were pulling out even before the coronavirus doomed Baselworld. Corum said goodbye in October 2018. The SWATCH Group – all 20 brands – said no thanks in July of that year. In March, they made in permanent. In February of this year, LVMH’s Bulgari said au revoir, citing the coronavirus outbreak.
The cancellation will cost tens of millions of dollars, spread out across watchmakers, distributors, retailers and buyers. Not to mention the economic impact on airlines, hotels, restaurants, bars and transportation companies in and around Basel. But it’s a drop in the ocean compared to the coronavirus’ effect on Asian watch sales.
Before the outbreak, Asia accounted for roughly half of all Swiss watch exports. China is closed for watch business. Parts of Hong Kong are a ghost town. Singapore is struggling. The U.S. State Department is advising Americans not to travel to South Korea or Japan, both of which account for a significant percentage of Swiss watch exports.
It’s not about tourist sales or closed stores in affected areas – although those are a catastrophe. The general fug hanging over Asian consumers is crucifying the sale of luxury timepieces like Rolex and Patek Philippe throughout the region, and decimating the sale of low to mid-priced Swiss watches like Longines and Tissot. With no end in sight.
Just as a rising tide lifts all boats, a disappearing ocean leaves everyone stranded.
Apple Watch supplier Foxconn is still offline, with no sign of resurrection. Apple is ramping up production outside of China as fast as it can, but there’s no guarantee those plants won’t also be affected, and we’re talking about replacing a million Chinese workers.
Meanwhile, Swiss watch brands are no longer fighting the Smart Watch Crisis. They’re fighting for survival. The coronavirus dooms Baselworld, but it also sounds the death knell for the watch industry’s weakest players. Which ones survive and which ones fall by the wayside remains to be seen.
UPDATE (27.2.2020): Official statement from Baselworld: “The show is currently maintaining its planned timetable and the teams are continuing their preparations for the event to open as scheduled on the 30th of April 2020. Baselworld remains the must-attend beacon event it has always been, as is evidenced by the high public interest and number of tickets sold so far.”