There is no doubt that the Swiss watch industry has always been the domineering watch-making industry in the world. It's consistent progress and growth has mesmerized both the whites and the blacks. Today, many people are in tandem with the notion that Swiss watches are specially customized to meet the needs of the world market. After decades of shear stability, the growth of the Swiss watch industry can be described as steady and uncompromising. Being the third-largest exported item in Switzerland, the Swiss watch industry has experienced both highs and lows, but the upsurge and the steady growth of the sector have remained unscrambled. Swiss watches are found in 5 continents, and they occupy a large volume of the world market. They exist in various prices, models, and in trending designs that suit every budget. The sustainable success of the industry depends on the presence of many varieties of watches ranging from quartz watches for fashion freaks, Micro brands to well-refined observations and masterpieces made from Gold and other precious stones. Buyer’s get low price watches sold for tens of dollars as well as expensive watches which cost hundreds of thousands of dollars.
How the Swiss watch market has struggled in the past
Alongside several other European industries, the Swiss watch industry suffered a significant setback during the twilight of the 1970s and early 1980s, but it withered the storm, recovered and regained global competitiveness. Prices and wages are generally high in Switzerland, but the luxury watch industry has dominated the world market since the 1990s. The Swiss watch industry rose from oblivion to stardom by operating a horizontally structured model. In the horizontal model, the supplies of the watch parts and the assembling of the external parts of the watch handled by different subcontractors. The assembling process is carried out by 'establishers,' and final products are coupled and sold in the local and international markets.
There have been intermittent uses of a vertical model structure where the watch is manufactured from start to finish by a single company. Companies such as Rolex make use of this model, and they have a long list of sophisticated machines and talented workforce to handle the design and coupling of the watch parts. Improvement in the industry is made possible by an efficient and high-quality workforce. It faced a severe downturn in the 1970s and 1980s during the emergence of the Quartz watches, and the persistent economic crises. The key players struggled in the adaptation and formal acquisition of the Quartz. Switzerland was negatively affected by the financial disasters that took place within the period.
The number of employees in the Swiss watch industry was reduced from 90,000 in 1970 to about 30,000 in 1985. There has been a steady recovery in the industry. In-depth analysis of the market growth report indicates that bulk of the improvement caused by the rise in the sales of the mechanical watches. The number of employees has also increased to 57,300 in 2013. Talking about the number of luxury watch companies, the Swiss watch industry has not been the same since the quartz crises — so many companies folded while others were engaged in mergers or survival. Currently, there are 572 watch companies in Switzerland compared to 1600 in 1970.
The current state of the market
The Swiss watch market dominated by top companies, key players, and brands that are internationally known. Rolex emerged the most valuable brand in the Swiss watch industry in 2016. Rolex is not only famous within the Swiss watch industry, but globally. Omega, Patek Philippe, Chopard, Longines, Breguet, Swatch, Hublot, Tissot, Audemars Piguet, Vacheron Constantin, Tag Heuer, IWC, etc. are the key players in the industry.
Records have it that Swiss watches were the most exported watch brands in the world in 2018 amassing a value of $21 billion.
Majority of the products from the Swiss Watch industry are exported to other countries in Europe, Asia, America, Africa, and Oceania. Over 53% of their products sold in Asia, 31% in Europe, 14% in America, and about 1% in Africa and Oceania. Recent market research by delliote shows that the top three markets for the Swiss watch are Hong Kong, the United States, and China.
As of 2018, Patek Philippe brand emerged the most expensive watch to be sold at auction when it was sold for 24 million US dollars in 2014 in Geneva and is one of the most significant strides of the Swiss watch industry.
Data released by the Swiss watch federation (FH) lately reported that the Asian market still far the most significant demand and the export value in Hong Kong increased by 21% while China experienced a 14% rise. The United States market was not very far behind the Asian giants as it amassed 8% rise in export value.
The first eight months in 2018 witnessed a sharp rise of 9.5% in the value of Swiss watches exported to the international market. The progressive trend has gallantly entered 2019, and the key players will surely be happy with the news. They overcome the downturn in growth, and they are not relenting in their efforts to ensure that the competitive advantage over foreign competitors is maintained.
Key strengths and recovery
The Swiss watch industry has stood tall during recent times because of the availability of a plethora of products. Availability is their main strength and has given them a competitive advantage over her competitors in other countries. The brands have been able to offer products crafted for different classes and ages. There is always a regular and limitless stream of timepiece products that meets sporting needs, fashion needs, chronometers, and luxury. The product variety is very comprehensive, and mostly luxury watches. The product variety is inclusive of the micro brands watches, the high tech watches, and the modern designer watches.
This growth and recovery are mostly attributed to the mechanical watches sold for prices above 3000 CHF. The high end and micro brands watches have gathered strength, and this instigated the increase in the exports value. Over 66% of the exports in 2017 were mechanical watches. Watches sold for 200 CHF and below are not patronized much, and the export value reduced by 11% in 2017 and linked to the performance of the Quartz watch, which is still declining. As of 2017, the export values decreased by 5% while the amount of export reduced by 7%. The good news was that the results of a survey of the market trend indicated that all categories of the products were expected to experience growth in 2018.
It was suggested that during the period of decline, many of the watch-making companies had produced a plethora of low-price watches which they thought would tempt or attract the interest of the buyers in place of the expensive ones. It is quite glaring that this may have instigated a massive purchase of these products for pieces of jewelry stocks collection by foreign customers.
The future, threats, and competition
Researchers in the Swiss watch industry is very optimistic that the future is bright and expects continuity in the positive trend, and the pessimistic overview has been entirely replaced by positivity.
The growth is expected to be generalized across the board and in all their top export markets. The Asian market is expected to witness a boom as 71% of the Swiss watch market researchers predicted that there would be an increase in the demand for Swiss watches in China and other Asian countries by the end of 2018. As usual, luxury products are expected to experience much patronage in China, which is in contrast to the research results in 2014, which predicted a drop in demand for such products.
The US market has also predicted to experience growth, but it still falls short of Asia as the third-highest market for the Swiss watches. Top brands such as Rolex are most likely to continue to enjoy steady patronage in many product varieties.
Today, it is very apparent that these predictions will become a reality. The timepiece industry in Switzerland has witnessed immense growth and expansion after a few decades of stagnation. There were growths in all the top six markets. There was a 25% increase in the value of the products exported to Singapore. Growth of 18.6% was achieved in China, while about 14.5% of Swiss watch products were exported to Hong Kong. Exports to Japan increased by 9.9%. In the same vein, the increasing demand for the products in the United States yielded about 9% growth in Swiss watch product exports. Exports value within the European continent was not left out in this boom. For instance, in 2018, the market demands in the UK rose, and the export value increased by 0.6%.
Meanwhile, data released by FH indicate that watches that were mostly exported are within the ranges of 500 dollars to 3000 dollars. Switzerland is synonymous with watch-making. They are known for the manufacturing of high technology watches, mechanical watches, quartz watches, and a myriad of multifunctional chronometers. Observations are only behind machines and chemicals as the most exported products from Switzerland.
This has encouraged the recent believe `by many quarters that there is a flip flop by the millennial as regards the use of wristwatches as the primary device for checking the time. There is no doubt that high technology mobile devices have rivaled the mechanical and Quartz wristwatches and there is still a lingering debate whether smartwatches and the diversities in mobile devices technology have affected the patronage for the Swiss timepieces. Apple and other top phone manufacturers accused of producing smartwatches and portable gadgets that can defeat the need for the mechanical watches but the key players in the Swiss watch-making industry have identified this threat, and there is a need for a swift response by producing highly innovative technology watches with vast applications in sports and health technology. Some Market researchers believe that smart watches are likely to continue their surge for more market share at the detriment of mechanical and Quartz watches. The dynamic and innovative nature of the market has underlined the progress and the aesthetic quality in the Swiss watch industry and its preparedness for the future.
The label "Swiss made" has garnered massive reputation across the globe, and it is a true reflection of the aesthetic innovation, class, and impeccable quality that abounds in the Swiss Watch industry.
The threats from smart watches are overemphasized. The millennial may not be timepiece freaks, but it's glaring that the Swiss Watches will survive the surge. In the past, they survived the Quartz revolution, but today there are conspicuous shreds of evidence that they are insulated from a crash.
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