History has always been a major selling point when it comes to Luxury Swiss Watch brands, and for the longest time they’ve benefitted from enviable track records dating back to previous centuries, well into the 1980s, and 2000s. In recent times, it’s been more obvious that the industry’s been suffering a decline for a number of reasons, but the Swiss Watch Industry Fighting Back.
Swiss Watch Industry In Decline
The Swiss watch Industry where manufacturers generate more than $20 billion in exports every year, is undoubtedly experiencing a decline. There are varied figures depending on who you listen to but the Federation of Swiss Watch Industry suggest that exports of Swiss watches fell nearly 9% to 1.4 billion Swiss francs in August 2016. From the get-go, we can clearly see this is a giant fall, which incidentally, represents the 14th consecutive month of decline.
So what’s happening and what can be done about it? Certainly, there are the usual economic factors influencing the industry, just any other industry. True, the Swiss watch Industry had enjoyed a lengthy period of ‘super stability’ but the modern world has introduced modern dilemmas. Over the past decade, we have seen an increase in competition from a number of sources, such as the counterfeit market and the gray market, which the discount watch industry fits into.
These are factors that have been present and growing steadily, forcing the industry to take action as we see with The Federation of the Swiss Watch Industry (FH) who
“On average each year we destroy around one million fake watches across all continents,”
as Jean-Daniel Pasche, President of (FH) points out. Further pressure on the Swiss Watch Industry is seen in the form of the gray market, which is precisely where Discount Watch stores reside.
The Gray Market
Further pressure on the Swiss Watch Industry is seen in the form of the gray market, which is precisely where Discount Watch stores reside. Although coupled with the global financial downturn the gray market can be seen as a necessary evil helping to keep this particular boat afloat, by making genuine quality timepieces available to a wider ownership.
Other factors that continue to cause headaches for the Swiss watch Industry is global financial instability. From the global meltdown of 2008, all the way up to the 2016 Presidential election, the shocking Brexit vote, and China’s debt explosion threatening its financial stability as the ‘Ratings Agency’ Fitch has pointed out.
Add to this, what Bloomberg refers to as the ‘perfect storm’ and you have a clear picture of what we are all up against. The strong Swiss Franc, the anti-corruption campaign in China, the fall of the Renminbi(Currency), the rise in gold prices, and the slowdown of tourism due to terror attacks on the continent, no one can be surprised to see a slowdown across the board.
Smart Watch Scare
In some quarters the introduction of the SmartWatch was initially considered to be a threat to the Swiss brand, but this too has seen a slowdown in sales. Having said that, you may be surprised that Apples’ SmartWatch has gained significant ground to become the second most popular watchmaker behind Rolex.
The Swiss Fight Back
Rather than riding out the storm, some Swiss watchmakers are fighting back. In contrast to their long-standing and stuffy approach to modern technology in favor of tried and tested precision manufacture, renowned watchmaker Frederique Constant is planning the rollout of their own SmartWatch collection. The collection will consist of 5 women’s’ models and 4 men’s’ models.
Two things stand out for me. I don’t know if I am a watch snob, perhaps you can tell me? I’m of the opinion that Swiss Luxury brands and SmartWatches are simply two different products that should never experience any organic competition.
Surely the people buying a quality Swiss Watch are buying it because of its history and prestige of owning a precision crafted movement? Sure, the SmartWatch will always be accurate and many features, but this is like going out to buy a Jaguar and coming home with a Prius. They aren’t in the same market, let alone the same class.
By no means am I criticizing manufacturers for putting on the gloves and entering the ring for the fight. No, absolutely not, but I just think they should choose the right fight. They’re heavy weights trying to fight a flyweight and they don’t need to prove themselves better, plus they’re in danger of chasing the flyweight around the ring and never landing a punch.
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