Swiss Watch Exports Sink 17% – Coronavirus Watch 34

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Swiss watch exports - Federation of the Swiss Watch Industry

“In spite of certain key markets increasing or remaining stable, Swiss watch exports overall continued to fall significantly in July,” The Federation of the Swiss Watch Industry reports. “However, the downturn was only half of that seen in June.” Hang on. Does that look like a recovery to you?

Bottom line: Swiss watch exports were down 17 percent in July, year-on-year. The continued cratering didn’t happen across the board; some price categories did better than others . . .

Swiss watch exports - Federation of the Swiss Watch Industry value

Less expensive watches saw a more significant fall, while those at the other end of the scale held up better, posting only a third of the decline in comparison.

Volumes, in particular, decreased sharply for watches under 200 francs (export price), falling by -41.5% compared with last year.

Watches priced at over 3,000 francs saw a dip in value of 11.1%.

You might think that the precipitous drop at the bottom end of the Swiss watch market is all about people with less money spending less in the post-lockdown economic downturn.

Check out this chart from nytimes.com from June 2020:

Consumer spending by income

The more dramatic post-lockdown spending rebound is at lower income levels. The money could be going to groceries, rent and other basics – not Swiss watches.

Another explanation: lower-income consumers are buying Apple and other smartwatches – not Swiss watches.

Not to put too fine a point on it, Coronageddon or not, there may never be a significant rebound in inexpensive Swiss watches.

Swiss watch exports - Federation July Swiss export stats by country

Stick a fork in Hong Kong, it’s done. The U.S. market holding steady is good news for the Swiss watch industry, but we’ll know what’s what after the Christmas selling season – keeping in mind that the U.S. market doesn’t even account for 25 percent of total Swiss watch exports.

While Swatch’s execs seized on the Chinese sales surge as proof that the world Swiss watch market is well on its way to recovery, we’ve highlighted the fact that a large percentage of those sales would have normally been made overseas.

The Federation’s headline stats – only specifying six main markets – don’t give the whole picture. Their caption provides more perspective.

Surprisingly, the United Kingdom (+2.5%) showed some signs of recovery ahead of other European markets, which were either stable (Germany -1.1%) or down sharply (Italy -33.6% and France -30.6%). Japan, in fourth place (-32.1%), another country deprived of Chinese tourists, remained clearly in the red.

Here’s a more complete chart for January to July Swiss watch export stats for all regions. There are a lot of numbers – none of them good.

Swiss Watch Exports January - to July 2020

You could sum-up the Swiss watch export situation for July in five words: it could have been worse.

But as the chart at the top of the post proves, there’s a long way to go to get back to the Swiss watch industry’s former peak.

And unless and until the Swiss watch industry has a mass market answer to the smartwatch, they may never get there.

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