Swiss Watch Exports Sustain Growth Despite China Challenges

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PARIS — Swiss watch exports continued to grow in May, rising 13.6 percent, despite continued headwinds in China, said the Federation of the Swiss Watch industry on Tuesday.

Totaling 2 billion Swiss francs, or $2.07 billion at current exchange, the growth in foreign sales of Swiss timepieces was driven by the 55.1 percent rise in value terms of watches in other materials and 34.3 percent increase for other metals, although their relative size compared to steel and precious metal timepieces remains small.

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High-end timepieces contributed the most to the month’s figures, with a 20 percent increase in value compared to 2021’s figures, with the 5 percent uptick in volume of watches under 200 Swiss francs giving a modest boost.

Bernstein analyst Luca Solca attributed the performance of lower-end time pieces to successful new product introductions like the recent Moonwatch collaboration between Swatch and Omega, which saw consumers queue around the block at launch, while watches over 3,000 Swiss francs were boosted by long waiting lists and an appetite for mega-brands equivalent to the boom in soft luxury, he said.

The 200 to 500 franc watches slumped sharply by 22 percent, furthering the 28 percent decline in value and numbers seen in April.

The month’s performance, described by the federation as “within the average range for the start of the year,” was driven by Western markets, which benefited from two additional business days compared to the previous year even as there was a temporary halt of deliveries to China.

The U.S. continued to boom at 34.8 percent, which has been above 30 percent for several months. Europe also continued its recovery, growing 31.6 percent, with France and Spain growing at 32.6 percent and 36.6 percent respectively.

By contrast, Asia continues to navigate choppy waters as the Chinese market further contracts, logging a 65.2 percent slump that confirms the effects of the country’s zero-COVID-19 policy, especially with the strict monthslong lockdown in Shanghai. In April, it had seen a 57.8 percent decline, which had been compounded by the 21.1 percent slowdown in Hong Kong the same month.

The effects of these were mitigated by the strong performances of other Asian territories, with Japan, Singapore and South Korea growing 29.9, 27.2 and 26.5 percent, respectively, leaving the region’s overall performance with a modest 3.5 percent decrease.

However, Solca said expectations were that recovery would follow the pattern of the footfall of Shanghai’s luxury shopping malls as logistics reopen and lockdowns are lifted.

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