Swiss Watch Industry Revealed: Coronavirus Watch 39



The Truth About Watches has done its level best to report on the secretive Swiss watch industry throughout Coronageddon. While the Swiss Watch Federation provides some general stats (e.g., Swiss watch exports declined another 10 percent in January) and we read Big Watch’s’ financial reports, we’ve been mostly flying blind. Until now . . .’s just published industry data unearthed and collated by Morgan Stanley. Finally we have solid intel upon which to base our observations. There’s plenty of insight to be gleaned from the numbers. Here’s a few key takeaways . . .

Swiss watch industry - Rolex wins

It’s Rolex’s world – everyone else is just living in it

As Swiss watch sales hit the skids, we predicted “a flight to safety” (i.e., strong consumer preference for established watch brands). True story. Rolex sits at the top of the sales chart like a Swiss Colossus. The brand captured 24.9 percent of the Swiss watch market, gobbling up market share at the expense of its rivals. Rolex’s market share is 50 percent larger than the top three Swatch brands.

As a result, Rolex was able to increase prices – despite shipping “just” 800k watches (140k less than the previous year). Also predicted and realized: industry consolidation on the supply (manufacturer) side.

Monochrome watch market chartThe top 10 Swiss watch brands now represent 68 percent of the market. We’re not seeing consolidation on the demand (consumer) side. Everyone is buying Rolexes; Swiss watch fans are turning into a monoculture.

OMEGA brand ambassador Zhang Ziyi- Swiss watch industry

OMEGA got crushed

In 2019. OMEGA earned around $2.4b in gross revenue. In 2020, the number fell to $1.75b. All Swiss watch brands saw declining income, but OMEGA’s nearly 30 percent hit is stunning, and not in a good way.

How much of their fall was down to disappearing in-person shopping, how much was the result of a flight to “quality” (vs Rolex)? Still unknown. But if I were the Swatch Group (OMEGA’s owners) I would be very very worried.

Swiss watch industry - Margot Robbie

High end Swiss watchmakers held on – as much as could be expected

Patek Philippe, Audemars Piguet and Richard Mille all saw declines from last year, but they weathered the storm better than most of their competitors. That’s because the action was at the top end of the market. Swiss watches priced over $7,515 may have only accounted for 10 percent of exports by volume, but they were responsible for 70 percent of sales in terms of value.

This is probably due to the K-shaped recovery throughout the world and tighter supplies in general – as opposed to overall demand making the higher end more resilient. Maybe selling variations on the same basic watch (Royal Oak, I’m looking at you) is a good strategy in times of trouble.

Cara Delevigne TAG Heuer Auction

The middle of the market is toast

TAG Heuer and Tissot got absolutely murdered, notching worse declines than OMEGA. Robert would say this mid-market cratering is the Apple Watch taking its toll (Apple Watch sales were up 19 percent in 2020 to 33.9 million units). I’m inclined to agree. 2020 was a year when people wanted convenience and technology of a smartwatch and didn’t care that it looks like dog shit on your wrist.

The good news? We’ll be going out and about in 2021; the downward trend is likely abating. A little. The bad news? Rolex’s market dominance is not abating. If Rolex had more watches to sell it would be even worse/better. Which they will. Meanwhile, all those Apple Watch customers ain’t coming back. The long term implications are almost as ugly as the blood on the carpet revealed by Morgan Stanley.


    • About that, please see below. Though I’ll add it isn’t “raw data,” and it’s only partially “data.” They took some of the published numbers (which are also not holy writ), they had their man in Geneva grease some palms / throw some darts to get the numbers marked “Est.”, and then they multiplied the former by the latter.

      It’s “accurate” only in that it validates the observation you could make at any decent country club’s pool deck. Rolex matters, to everyone; the other high-end Swiss brands matter to the (very!) occasional enthusiast, dandy, and/or extremely old person; Omega matters to the Infiniti driver who genuinely prefers his Galaxy to an iPhone.

      The rest of the Swiss players are competing heads-up with the rest of the industry for whatever portion of the watch-buying public’s money hasn’t already gone to Apple.

      • I can’t reply to you down below (there’s a limit on how much a convo can be nested) but the main thrust of your argument isn’t wrong. These #s are going to be generally estimates that are a mix of extrapolation, slightly-inside information, and outright guesswork. The exception would be the Richemont, LVMH, and Swatch Group which are public and have some better numbers to back this up.

        That being said, I have some familiarity with reports like this and they tend to be directionally correct, if not perfect. Certainly enough to base observations on; that these observations generally match with what we’re seeing on the secondhand market, hearing from our dealer pals, and various other sources.

        And for the record, while I genuinely prefer my Galaxy to an iPhone, I drive a BMW, not an Infiniti.

        • Ordinal rankings and lots of significant figures and every cell having a number regardless of the reliability of its source data … That’s not how you represent “directionally correct” levels of certainty. One cannot refine data by mushing multiple guesses together. They know what you do, that’s there’s Rolex then exceptions that prove the rule then everybody else. And they’ve tarted it up to look like they know substantially more.

  1. The sales similarity between Cartier and Omega is unexpected. This does prove that Tissot is a volume juggernaut despite being almost entirely off my radar for decades. What does 0% wholesale mean for Lange and Mille? That everything produced is already sold and nothing is being bulk shipped to dealers?

    • 0% wholesale means that everything is being sold through manufacturer owned retailers/boutiques or by the manufacturer online. Nothing is sold wholesale to distributors or independently owned retailers. I was aware Mille made that shift but I was not aware of it for Lange

        • It is interesting that only Rolex and Rado are listed as being sold 100% through independent distributors and retailers.

          That does not appear to be true for Rado because I just checked their website and can buy a watch directly from Rado online.

          Also interesting is that 60% of Cartier and 72% of AP watches are being sold through manufacturer owned boutiques or, for Cartier, through their online portal.

          • To Oscar and TT, and also to Joseph: Note the meat of the data comes from not MorganStanley, but a Geneva-based luxury-goods private-equity consultant (

            The consultant, in turn, is likely working off a survey discreetly circulated among his sources, whom I would guess vary greatly in access and reliability from brand to brand, and any internal financials (with all the subtle accounting-practice variation they entail) that can be ferretted from creditors and so forth.

            You may safely assume the MorganStanley Luxury Goods Research Group’s core contributions were to (1) cut that guy a fat check, and (2) beat on their spreadsheet monkeys, er, Wharton MBAs, until the data viz plastered over all that icky granular unreliability and made their face team, er, Saïd MBAs, look well-informed on the next M&A engagement pitch. Goodness knows MorganStanley wants to be out in front of the Swiss watch industry contraction parade.

            So, why the puzzling parity between Cartier and Omega in volume, or between Rolex and Rado in %wholesale? Well, why the apparent specificity for Piaget but the butt-scratching imprecision for Longines?

            Though my experience isn’t specific to the luxury industry, I feel confident in recommending that you treat high-level summaries like this, wherever you may find them, as you would treat automotive reliability reports. Any observation which is “unexpected” or “interesting” is more probably the result of sampling error, apples-to-oranges hand-waving, oversight, or sheer outcome determinism.

            That they take this data down to a tenth-of-a-percent market share and a to-the-ones average retail price is spit-take absurdity. “Est.” multiplied by “Est.” multiplied by “Est.” does not yield decision-grade conclusions, unless you also believe duct-taping bajillions of subprime mortgages together yields investment-grade securities.

            Your 7th-grade chemistry teacher wouldn’t let you get away with that garbage; maybe MorganStanley’s private-equity clients will.

  2. If my beloved Hamilton goes away, I may have to look for another brand that produces “military-inspired field watches” and fake patina’d dials. Or just keep the two Hamiltons I have and wear them forever. Not the worst problem to have.

  3. Does share of wholesale mean % of their product for that year that was sold on the market? Lower % meaning higher inventory?

  4. I know I’m supposed to be looking at the Tag with the girl in Pink, but I can’t stop looking at her eyes. Amazing (at least to me).

    Only thing missing here is margin and if there was any type of improvement, thus the monetary gain is somewhat offset by volume losses. Market-share is an overrated statistic because it drives lower margins, but this is a discussion for another day.

  5. I do see some M&A coming – with Morgan Stanley directly involved as a partner/advisor/whatever. And what’s best to shake things up with a bit of false-flag ops?

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