PARIS — Summer is almost over but Swiss watch exports continue to shine, with exports growing 14.7 percent in August to 1.7 billion Swiss francs, or $1.8 billion, the Federation of the Swiss Watch Industry said on Tuesday.
Growth was steady in volume as well as value, the group noted.
While all materials contributed to the month’s positive results, the “other materials” category outpaced all others. It soared 109.1 percent in value and 81 percent in volume — translating to an additional 170,000 watches — in the month.
Precious metal timepieces also contributed, with a 29.8 percent increase in units and a 22.2 percent rise in value.
The high-end segment, starting at 3,000 Swiss francs, continued to perform well, with an increase of 20.2 percent in value terms, giving credence to experts saying the primary watch market would likely remain under pressure, despite recent a market correction on the collectibles market.
But its strong performance was nonetheless largely outpaced by sales of entry-level watches, priced under 200 Swiss francs, which recorded a 44.2 percent jump in value terms and a 33.5 percent rise in the number of units exported.
Still troubled is the mid-market segment, which has been on a sharp downward slide in recent months.
Bernstein analyst Luca Solca noted that these numbers seemed encouraging for Swatch Group but cautioned that the mid-market slump may be a sign that lower-end consumers may be curtailing discretionary spending due to inflation and recession fears.
“We expect watches to take a soft landing (for the major brands) as they benefit from the waiting list,” stated Solca, adding that jewelry could be the first sector impacted by consumers returning to normal spending patterns and skipping big ticket purchases if they needed to put their finances back on track.
He also cautioned that watch exports would not be immediately impacted by slowdowns, as retailers would be first in line to see any downturns in consumer spend.
In August, three territories accounted for half of the worldwide increase, led by Japan’s 48.3 percent leap, which saw it jump from sixth to third place on the market share podium, and supported by the U.S., which posted a 23.2 percent increase and remained the number one export market.
China, which had returned to growth in July after the end of the most stringent pandemic-related restrictions, continued on its upward trajectory, logging a 15.4 percent rise and consolidating its second position.
Hong Kong slid to fourth place in market share, owing to a 7.8 percent contraction to 113.3 million Swiss francs as the territory continues to be deprived of tourist traffic due to ongoing quarantine requirements. The U.K. was on its heels, closing the gap at 112. 2 million Swiss francs, thanks to its 11.2 percent growth.
Europe also saw growth during the month, with a 10.9 percent rise, despite Italy’s 4.1 percent backslide, which the federation attributed to an unfavorable base effect.