Swiss watch exports fall as Chinese demand drops further

Swiss watch exports fell sharply in June after a significant slowdown in demand for premium and luxury timepieces in China and Hong Kong worsened.

Shipments dropped 7.2% by value to 2.3 billion Swiss francs ($2.6 billion), or by 300,000 watches, in June from a year earlier, the Federation of the Swiss Watch Industry said Thursday. This was driven by a 36.5% slump in exports to China, the second-biggest market behind the US, and a 23% fall in shipments to Hong Kong, as a downturn in real estate values took a toll on consumer sentiment. 

The latest numbers confirm a China-led slowdown that’s rippling through the industry and hurting the top Swiss watch brands.

On Tuesday Richemont reported a 27% decline in Greater China sales in the three months through June, dragging down overall sales of its watch brands, which include Vacheron Constantin, Jaeger-LeCoultre and IWC, by 13%. Swatch Group AG, which owns Omega, Blancpain and Breguet, said on Monday China sales plunged 30% in the first half of the year.

Demand for pricey timepieces has waned after a spike when Covid lockdowns ended. Premium watch buyers have reined in spending amid higher interest rates, shaky economic growth and geopolitical conflicts. 

Watchmakers are also suffering from continued strength of the Swiss franc against other currencies that’s spurred price increases in some markets and deterred customers. Following another record in 2023, Swiss watch exports are down 3.3% in the first six months of the year.

The US and Japan were lone bright spots in June with wholesale exports rising 6.5% and 13.2% respectively.