Swiss watch exports will not return to pre-Covid levels until 2023

Mainland China will play a vital role in rebuilding the Swiss watch industry's fortunes. Keystone / Adrian Bradshaw

Exports of Swiss watches are unlikely to return to pre-coronavirus pandemic levels over the next couple of years according to estimates by the Vontobel private bank. 

The forecast is not all doom and gloom though. After taking a hit in 2020, Swiss watch exports should grow by around 18% in 2021, thanks to the dynamism of the market in mainland China.  

Expected to reach CHF20 billion (almost $21.5 billion), exports this year should increase sharply in the second quarter, where a jump of more than 50% is anticipated, the report said. 

In 2020, Swiss watch exports plummeted by 21.8% to CHF16.98 billion. The closure of factories and shops at the height of the health crisis and the lack of international tourists took a heavy toll on the sector. 

Movers and shakers 

Rolex, which has experienced a smaller decline in sales than many other watch brands, has become the leading Swiss watch brand with estimated sales of around CHF4.95 billion in 2020. It has a market share of 25%, thus dethroning the Swatch group, which hangs on to 22% of the market, according to calculations by the Zurich-based bank. 

The Richemont group, another big player which owns high-end brands like Cartier and Jaeger-LeCoultre, accounts for 17% of market share, while French conglomerate LVMH, which owns Swiss watch brands like Hublot, Bulgari, Tag Heuer and Zenith, enjoys a 7% slice of the pie. 

Mainland China became the most important export market for the Swiss watch industry for the first time, overtaking Hong Kong which had held the top spot since 2008. 

The Vontobel analysts also point out that entry-level and mid-range timepieces will continue to suffer, particularly because of competition from smartwatches. In addition, the recent strengthening of the dollar and the euro against the Swiss franc will benefit Swiss watch manufacturers.