The Swiss watch industry loses a decade

The conclusion of the Deloitte Swiss Watch Industry Study 2020 makes for reassuring reading: "With the second wave of the COVID pandemic currently affecting Europe and the US, no one can say for certain how long the crisis will last However, as the country's third largest exporter and a pillar of the Swiss economy, the Swiss watch industry will adapt and recover Regardless of how the pandemic plays out, the watch industry will look back on the year 2020 as the year of accelerated transformation" Except that in the meantime, Morgan Stanley has put some numbers on this "Transformation" and they are considerably less upbeat.

The American bank forecasts a drop in Swiss watch exports this year of 32% in volume to 14 million units and a 19.5% contraction in value to CHF 16 billion According to Morgan Stanley, watches with a wholesale value above CHF 3,000 should account for an all-time high of 71% of Swiss watch exports in value versus just 10% in volume With a 15% share, this would make China the biggest export market for Swiss watch brands.

The bank models a 15% contraction in the value of Swiss watch exports to the US to CHF 2 million, compared with a decline of 21% outside the United States Turning to smartwatches, the Deloitte report concludes that the Swiss watch industry has "Missed the boat" Sales of the Apple Watch in Q1 2020 climbed 23% year-on-year whereas Swiss watch exports for that period declined by the same amount. Source