The growth prospects for the Swiss watch industry continue to remain promising. A consulting firm expects strong growth in the future in online retailing and the market for second-hand watches.
Despite rising inflation and geopolitical turmoil, Swiss watch industry executives remain positive about the industry's growth prospects for the coming year, according to a study on the Swiss watch industry by Deloitte.
Difficult Market Environment
The majority of executives interviewed expressed confidence in the industry's prospects for the coming year, although the mood has dampened considerably from last year when more than three quarters had a positive outlook. Nearly 80 percent of watch specialists say the war in Ukraine and geopolitical uncertainty are significantly impacting their company's outlook.
Most executives consider the United States to be the next big growth market, followed by India and China. In terms of export volume, the United States is already the most important market for the Swiss watch industry.
Growth expectations vary considerably by region. In Hong Kong, a further decline or stagnation is expected, with only 57 percent expecting the Chinese market to grow. By contrast, more than three quarters expect the market in North America to continue to expand.
Online Retailing's Importance
The study reveals that 40 percent of all consumers are most likely to purchase a new watch from online retailers. In the under-40 age group, this rises to nearly one in two. Even so, most executives are convinced traditional watch stores will remain the most important sales platform in the near future. But to meet rising customer demand, they say that fundamentally, the watch industry must significantly expand its online offerings. According to estimates, the share of watches purchased online is likely to double to 30 percent by 2030, according to Deloitte.
Inflation Hedge
Almost a quarter of respondents buy watches for investment purposes, to resell them afterward, with Singapore, Hong Kong, and China leading the way, with more or less 30 percent of respondents planning to resell the timepieces. In a volatile market environment with high inflationary pressures, luxury watches are often seen as reliable value investments.
Second-Hand Market
The market for second-hand luxury watches is becoming increasingly important. Almost one in three of those surveyed intend to buy a second-hand watch in the next twelve months. These watches are becoming increasingly popular, particularly among millennials and Generation Z with nearly half expressing interest in such a watch.
Deloitte estimates that the used watch market will grow from the current 20 billion Swiss francs to a projected 35 billion Swiss francs by 2030, comprising more than half of the new watch market.
The ninth edition of Deloitte's watch industry study is based on an online survey of 70 executives, interviews with industry experts, and an online survey of 5,579 consumers in the home market and key export markets for Swiss watches.
