Over the past few years, the Swiss watch industry has been confronted with difficult market conditions. It is anticipated that watch exports will drop to their lowest level in the next 35 years in 2019, as the level of competition from fitness bands and smartwatches increases.
For a considerable amount of time, this sector, which normally brings in more than twenty billion dollars in annual exports, was able to bask in an aura of exclusivity. The conventional watchmaking industry is currently experiencing a decline in market share.
According to the Swiss Watch Industry Federation, the Swiss watch industry exported 18.9 million watches from January to November of this year, a 13% decrease from 2018.When compared to the previous year, November’s exports resulted in a revenue decrease of 3.5 percent. The watch business only shipped out 17.8 million timepieces in 1984, which was the last time things were in such a precarious state. But this was during a time when it was facing a crisis brought on by the introduction of inexpensive quartz timepieces.
This marked the beginning of an era in which cheaper and more accurate alternatives to Swiss mechanical timepieces became available. During that time period, new competitors nearly brought the industry to the brink of extinction. The number of watchmakers in Switzerland decreased from 1,500 in the 1970s to only 600 at the peak of the crisis in the middle of the 1980s. In the end, Swiss watch companies were able to weather the storm and carve out a place for themselves in the premium luxury segment of the market.
This time around, Swiss watches that are priced at the entry-level face competition from another manufacturer. It comes from high-end wearables like the Apple Watch, as well as a multitude of other hybrid and intelligent timepieces. Shipments of Swiss watches costing less than $200 fell by 20% in November.
Traditional Swiss watchmakers continue to have access to a variety of market prospects thanks to the industry’s distinctive stance within the luxury market, the robust brand image, and the allure of the Swiss Made logo. Some watchmakers have focused their efforts on high-end mechanical clocks that sell for more than three thousand dollars.
However, demand in that traditional hub is decreasing as a result of the political unrest that is currently taking place in Hong Kong. In light of the fact that Hong Kong is the second largest market for Swiss watches after the United States, this has had a considerable impact on overall performance.
Some conventional watchmakers are making headway in the rapidly expanding market for wearables by forming collaborations with technology companies and investing in related startups. This comprises a number of other brands in addition to Tag Heuer and Frederique Constant. However, in terms of sales, Swiss brands have not yet played a particularly significant role in the smartwatch industry. [Citation needed]
Time will tell whether or not Swiss watchmakers are successful in turning around their fortunes in the market. This sector of the industry can’t afford to ignore the potential opportunities and challenges provided by the emerging market for smartwatches if it wants to continue existing in the future.