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China Daily Website

Mainland has less time for exports of Swiss watches

Updated: 2012-10-25 10:15
By Wang Wen ( China Daily)

The Chinese mainland led the decline in Swiss watch exports last month, with a 27.5 percent year-on-year decrease, reflecting the slowdown in economic growth, according to the Federation of the Swiss Watch Industry.

Mainland has less time for exports of Swiss watches

Figures from the federation show watch exports from the nation fell for the first time in the past three years by 2.7 percent year-on-year to 1.73 billion Swiss francs ($1.86 billion).

Watch exports to Hong Kong dropped by 19.9 percent in September compared with the same period last year.

Some Swiss watch manufacturers have also noticed the market risk in China. A "certain weakening" in the high-end segment in parts of China is a negative trend for the future, Swatch Group Ltd, a Swiss manufacturer owning 19 brands, said in its half-year report released in July.

The drop in Swiss watch sales reflects the slowdown in China's economic growth this year, said Yang Qingshan, a guest researcher on luxury goods and services at the University of International Business and Economics in Beijing.

Rich people are the main buyers of luxury watches and their purchasing habits are more likely to be affected by economic growth, he said.

In July, the Chinese government banned government officials from using public funds to buy luxury items. Some business insiders said the ban will change the rapid development of China's luxury watch market.

"The ban will definitely have an adverse effect on luxury watch sales," said Sun Xuguang, operations manager for Sparkle Roll Group Ltd, a Hong Kong-listed luxury dealer in several Swiss independent watch brands, including Parmigiani and DeWitt.

Sun said very high-end brands, manufacturing only hundreds of watches a year, will be affected more, because their products are more conspicuous to the public.

However, Sun said a change in consumer patterns - rather than a fall in sales - would be the more obvious result of the government's ban.

"Business owners, rather than government officials, will be the main consumer group for luxury watches in the future, which will be better for the sustained development of the luxury industry," he said.

But the Swiss watch industry federation said the decline will not be a cause for concern, following sales increases for more than 30 months.

The steep decline in China reflects sales figures over several months, with growth clearly losing momentum, the federation said.

Yang, from the University of International Business and Economics, said: "The decline is normal for the market, which touched a peak last year."

Yang said that as a large part of China's luxury market, Swiss watches enjoyed a "dream sales performance" in 2011 and this year's decline was no surprise.

wangwen@chinadaily.com.cn

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