Swiss Wristwatch Exports Suck – Coronavirus Watch 38


OMEGA boutique London

The U.K. is back in full lockdown. All non-essential businesses are shuttered. While we can take comfort in the fact that the new strain of COVID-19 doesn’t threaten to make Sean of The Dead into reality, the pre-Christmas cancellation is a bullet to the brain for U.K. watch sales. As for Swiss wristwatch exports generally . . .

They’re holding on by the skin of their teeth – to a level below 2019 which is even more frightening than Sean’s zombies . . .

Swiss wristwatch exports chart

Swiss Watch Exports Down 3.2% in November 2020, With Signs of Improvement trumpets. Make that “spins.” As the above chart from the Swiss Watch Federation (FH) indicates, the industry is still a very sick puppy.

Swiss wristwatch exports may have levelled off, but they’re levelled off at a level that leaves many watchmakers struggling to survive. Could your business survive a 23.5 percent downturn over 11 months? (That’s not a rhetorical question.)

Swiss wristwatch exports by country for November 2020

The fact that Swiss watch exports “only” dropped 3.2 percent in the month of November is due to China. The FH stat shows a huge disparity between the performance of the Chinese market and, well, everywhere else. It also somehow forgets to include numbers for Singapore (-31.9%), Italy (-27.8%) and France (-29.0%). And again, the net result is only a positive if viewed month-to-month.

The Swiss watch industry isn’t just ailing badly in terms of raw numbers. Deloitte has released a survey on the state of the Swiss watch industry; its getting massacred at the bottom end of the market. Again. Still.

Swiss wristwatch exports bottom end of the market

Since 2012, the trend of exports of entry-level quartz watches has been downwards, growing more acute in 2019 when export volumes were 10 million units lower than in 2011. This decline was further accelerated in 2020 by COVID-19, as illustrated in Chart 2. 

During times of crisis, those with less discretionary income have a tendency to save, and there has been a big impact of sales of entry-level watches from cautious spending, growing competition from similarly-priced smartwatches and non-Swiss fashion brands, and less need for the “Swiss made” label in this price range. 

Swiss wristwatches vs. Apple Watch

It’s the smartwatch comment that’s the most chilling (for the Swiss). Check out Chart 11. Plus twenty percent vs. -23 percent units sold is bad enough. The raw numbers discrepancy between smart and dumb watches is staggering.

The Apple Watch alone is outselling the entire Swiss watch industry. Specifically, 30.6m units vs. 20.6m in 2020 Q1, and Apple accounts for just 55 percent of the entire smartwatch market.

Cartier Apple Watch face - not Richemont

This is only going in one direction. “The worth of the global smartwatch market is estimated at USD 48.44 Billion in 2020,” reports, “it’s projected to reach USD 130.92 Billion by 2025.”

Are entry-level quartz watches the canary in the coal mine? asks, sensibly enough. Yup. All those global smartwatch sales have come – will come – at the expense of low to mid-market Swiss [branded if not made] quartz watches, COVID-19 be damned.

Swiss watch execs freak over declining quartz sales

No wonder 60 percent of the Swiss execs Deloitte surveyed consider quartz crisis 2.0 a threat to their industry’s long-term future. Not to mention the hit happening to cheap mechanical watches. Oh wait . . .

Respondents fear that a continuing fall in sales in entry-level quartz watches and low-to-mid-range mechanical watches, which are not performing as well as in the past, could weaken the industry in Switzerland. This would inevitably have a knock-on effect on prices, job losses and losses of know-how.

Grim stuff. And it gets worse. According to Deloitte’s consumer survey, given $5649.08 to spend on a watch, at least a third of respondents would rather buy a smartwatch every year for ten years than a single luxury watch. It’s a dopey question, but OMG. Really?

With each passing day, the Swiss watch industry is becoming more and more dependent on high-priced products. In fact, without sales of luxury Swiss watches, they’d be dead in the water. And even that last redoubt is under assault.

OMEGA Apple Store

With the second wave of COVID currently affecting Europe and the US, no one can say for certain how long the crisis will last. However, as [Switzerland’s] largest exporter and a pillar of the Swiss economy, the Swiss watch industry will adapt and recover. 

Deloitte’s conclusion strikes a distinctly Pollyannaish note. Well they would do, wouldn’t they? The high-priced consultant wants to help Swiss watch companies boost Swiss wristwatch exports. Maintain them? Stop them from sliding off a cliff? Whatever. No skin off Deloitte’s nose.

Swiss watch execs on smartwatch threat

At the tail end of Coronageddon, the Swiss watch industry is undergoing a wrenching period of downsizing and consolidation. Chart 15 indicates that its movers and shakers are in deep denial about the real, underlying and ongoing, inescapable threat to their livelihood.

China isn’t going to save Switzerland. Without an answer to the smartwatch, the Swiss watch industry will never again be the behemoth, the ne plus ultra it was just a few short years ago.


  1. The Swiss will be ok, industry is only about 25% of their economy, and within that watches account for less than 10% of exported goods.—fakten-und-zahlen.html

    The biggest impact is that the Swiss may have to replace UBI with polishing anglage for the people that cannot cut it in money laundering, denying insurance claims, and pharma, but we are on the verge of various technologies producing better anglage than humans anyway.

    It is interesting that the watch industry continues to count the city of Hong Kong separate from the rest of the country of China. The (painful for Hong Kong residents) reality is that Hong Kong is very much part of China, and if that reality is recognized China represents 25% of Swiss watch exports, and its numbers are not quite so rosy.

  2. I’m hardly an expert on economics. But, I know a bit about marketing. I do not get the comparison / competition between “smart watches” and watches. They are different animals… Or, at least different enough to know that it is FOLLY for watch manufacturers to try to COMPETE with smartwatches. Hit’em where they ain’t!

    It’s like trying to sell horses and competing with cars as TRANSPORTATION. Folly. Horses USED to be transportation. Not anymore. Horses are a hobby and sport now. There’s still a BIG market for horses and horseback riding. Ask this father of a 16 year old girl how he knows.

    A smartwatch is a phone accessory (for which I personally have absolutely no use). A watch is a timepiece. I’ll also begrudgingly admit that watches are also fashion accessories… functional fashion… but, yes… fashion.

    It’s a big mistake for the watch companies to try to compete with a phone accessory. They need to completely separate themselves from that fight. It’s unwinnable.

    • The future is very bright for people that appreciate mechanical watches. In 20 years it is almost certain that a nice mechanical watch will be available at a good price. Much nicer watches than Sistem51s (which are not bad) will be produced completely by automation.

      For Swiss watch manufacturers the future is ugly. Especially the ones that cannot produce under $1,000 and are not Rolex, Patek, or AP (thanks to the RO). “But look at the finishing on my mediocre watches” Richemont is toast.

      The hobbyists and collectors won’t replace the office drones that used to have to go to the mall and pay retail for, e.g., a quartz TAG Aquaracer or quartz Cartier, but can now get away with an Apple Watch.

  3. To continue my previous thoughts…. I think the watch companies need to target watch “collectors.”

    People who wear ONE watch to tell time are more likely to migrate to a “smartwatch.” And, once you do that, you’re fairly committed to that ONE smartwatch, until you upgrade to another smartwatch and dispose the previous. Smartwatches are paired to the phone, and by design / function need to be worn every day to gain the use of their features.

    Timepieces are don’t require that commitment. You can wear a different watch every day without having to “pair” it up with your phone.

    The target market for timepieces are those who like to have multiple options for their wrists. It’s the same for knives or guns. I only “need” one pocket knife and one gun, RIIIIGHT? Wrong! 😀

      • On a more serious note, I do see your point. Most people see a Rolex Submariner and don’t think “dive watch”. The bezel and wart just make it look ‘fancy” or “dressy”. My sibling thought her Seiko with a plastic crystal and a quartz movement was a potential family heirloom that would be cherished by future generations because she didn’t understand most quartz movements are disposable and she thought the bimetallic bracelet and square case was classy. I just bought a Casio MRW because it looks like the Luminox Karl Urban wears, but is a fraction of the price.

      • No (I know you were kidding)… more like guns and knives. Why would I have 50 Spyderco knives, when I only “need” one? Why would I have over a dozen G-Shocks and growing? Why would I have lost a bunch of guns in a tragic canoeing accident?

        And, of course, there are “collectors” of FAR more expensive timepieces (limited only by budget). It seems most owners of expensive Swiss watches have more than one.

        Don’t compete for the demographic that wears only ONE watch (likely a smartwatch these days). Go for the demographic that enjoys having a choice daily.

      • That’s the smartwatch I prefer tbh. Also, I was watching “Just One More Watch” on youtube (good channel) and he was reviewing a Christopher Ward World Timer and realized that putting London at the 12 position meant it actually didn’t line up with Sydney since they were an extra hour back. I chuckled and thought that these problems never occur with a smartwatch. Kind of funny that the analogue World Timer was wrong as it was made, also making Robert’s point.

  4. What I’d like to know is how a Rolex can sell for double the retail, yet there are thousands of them for sale at any given time? Yes I know they aren’t “new”, but there’s no reason the prices should be double when there is still significant supply (even for the new Oyster Perpetuals). The economics of it are inverted.

    • To my knowledge, this is not true. There are NOT thousands of them for sale at authorized dealers.

      The bottom line right now: You can’t waltz into a store and buy a NEW Rolex. You can’t. At best, you’ll be put on a waiting list. So, that makes the used and gray market watches (that are in high demand) go up in value. Way up.

      We saw the same thing with Ferraris back in the early 2000s. The demand was so high, that you could not walk into a Ferrari dealership, even with cash literally in hand, and buy a new Ferrari 360 . There was a waiting list. However, you COULD buy a slightly / lightly used Ferrari 360 (with a couple thousand miles on it) for $70,000 OVER the MSRP of a new one. That’s not a typo. A $70k premium for a USED one.

      At the time, if you wanted a new Ferrari 360 from my local dealer, it was a 5-year wait… and to qualify to be on the waiting list, you had to be a SIX-TIME repeat customer. No shit. Of course, by 5 years, they were already on to the next model.

      It’s not that way anymore, of course. But, it can happen. And, it’s happening right now with Rolex. Yes… there are tons of them for sale… used or gray market. And, you’ll pay a premium over MSRP. Or, you can get in line for a new one from an AD at MSRP.

      • There’s 15 pages of this watch here.–imod2745.htm?dosearch=true&query=Rolex+GMT+Master+II+Batman&goal_suggest=1

        Which means, there’s a significant amount not on that site. Plus, if you want a new one, then the gray market shouldn’t matter as much. Watches aren’t a new product in a regulated industry that are difficult to make. I understand there’s a demand, but double the price is ridiculous. It’s still inverted economics since the new watches are controlled by Rolex. The price hike should be at the dealer level.

        • I really don’t understand why you think it’s “inverted.” It’s rather simple supply and demand.

          Chrono24 is basically an ebay for watches, right? It’s not an authorized Rolex dealer selling new watches directly. Right? They set up escrow accounts for dealers and customers. Right?

          Or did I get that wrong?

          Yes… Rolex “controls the output of new watches to authorized distributors.” Right? I’ve heard the conspiracy theories that they’re intentionally throttling production. Honestly, I don’t know or care.

          The bottom line is if you want one from an AD, get in line. Otherwise, belly-up to the gray market bar (or used market) and pony up the premium. If you don’t, someone else will. Until that someone else WON’T pay the price, prices will stay high. Supply – demand. Simple and not inverted.

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