Swiss watch exports soared to unprecedented levels in 2023, reaching a record 26.7 billion Swiss francs ($30.9 billion), driven by both price increases and a surge in shipments of more affordable quartz watches. However, the pace of growth experienced a notable slowdown in the second half of the year, dropping from 11.8 percent in the first half to 3.6 percent, as reported by the Federation of the Swiss Watch Industry on Tuesday.
Economic and geopolitical uncertainties have prompted watch buyers to exercise caution, contributing to the deceleration in sales growth. The Swiss franc’s increasing value is also placing pressure on producers, particularly subcontractors and suppliers who anticipate a less optimistic outlook for the upcoming year.
While the luxury goods market has only been partially impacted by the sluggish economic situation, it has nonetheless affected consumer confidence across all levels. Several brands have expressed their intention to approach forecasts with caution, reflecting the broader economic landscape.
Bloomberg News previously highlighted the industry’s slowdown as demand for high-end timepieces from brands like Rolex, Patek Philippe, and Audemars Piguet reached unprecedented levels during and after the pandemic.
The Swiss Federation anticipates continued challenges for watchmakers in 2024, especially in the entry-level and mid-range segments, due to the persistently strong Swiss franc. Swiss National Bank President Thomas Jordan has acknowledged the adverse effects of the high value of the Swiss currency on exporters.
Despite the second-half slowdown, overall exports experienced a 7.6 percent increase in 2023, setting a new record. Volumes rose by 7.2 percent to 16.9 million units, with the Omega MoonSwatch collaboration driving exports of quartz watches beyond 10 million units.
The United States maintained its position as the top destination for Swiss watches, with a 7 percent increase in exports, reaching 4.1 billion francs and constituting approximately 16 percent of total exports. Meanwhile, exports to China rose nearly 8 percent to about 2.8 billion francs, making up around 10 percent of total exports.
The high-end segment, with watches priced above 3,000 francs, continued to drive overall value growth, accounting for 92 percent. On the other hand, watches with wholesale prices of 200 francs or less, exemplified by Swatch Group AG’s Omega MoonSwatch, played a significant role, contributing to 83 percent of the volume increases, according to the Federation.
