Asian demand fuels record Swatch sales

British actress Kate Winslet at the opening of Longines' flagship store in Hong Kong last month Keystone

Swatch Group sales rose 14 per cent to a record SFr8.1 billion ($8.8 billion) in 2012 as the watchmaker benefitted from demand in Asia and from tourists, who bought timepieces from Swatch brands like Omega, Longines and Tissot in Europe.

The Biel-based maker of timepieces, jewellery and watch parts said nearly all of its 19 brands had experienced double-digit growth. It also said it had increased its market share in the world watch sector, which is set to reach $47 billion in 2017 according to market researcher Global Industry Analysts.

Sales were fuelled by the demand for luxury watches, including Swatch’s Blancpain and Breguet. Chinese tourists avoid considerable taxes imposed in their home country when they buy timepieces abroad.

Watch and jewellery sales, Swatch’s largest business, increased 16 per cent to SFr7.3 billion in 2012, while revenue from its production division, which sells movements and components to other watchmakers, rose ten per cent to SFr2.2 billion.

Sales at its electronics business, which supplies components used in automotive, consumer and industrial electronics, dropped 7.4 per cent to SFr311 million.

Swatch is the owner of luxury watchmaker Omega SA, the official timekeeper of the Olympic Games in London last year. Omega was one of the few corporate Olympic sponsors allowed to display its logo inside Olympic venues; the theory was that keeping time was integral to many events.

Swatch said it expects “good” operating profit and net income for 2012, despite “significant” marketing expenses for the games and unsatisfactory currency developments.

“As expected, the first ten days of January once again indicate positive growth in 2013,” Swatch said in a release on its website.

For Switzerland, which exports about SFr20 billion worth of watches every year, the Asian continent accounted for more than half of the total value of exports in 2011, according to the Federation of the Swiss Watch Industry. The federation has not yet released figures for 2012.

In 2011, China and Hong Kong made up the biggest single market for Swiss timepieces with about 30 per cent, followed by the US with ten per cent and France with 6.7 per cent.