Deloitte Swiss Watch Industry 2023 Study Breakdown - Part 1: A Time of Resilience and Transformation

Deloitte Swiss Watch Industry 2023 Study Breakdown - Part 1: A Time of Resilience and Transformation
Source - Deloitte.

The Deloitte Swiss Watch Industry Study 2023 provides an illuminating view of a sector, that against various odds, displayed resilience, innovation, and adaptability. This article delves into key takeaways, market trends, and outlooks for the watch industry based on the study.

1. A Record Year and its Significance

1.1 Remarkable Growth amidst Pandemic Woes

In 2022, the Swiss watch industry hit an all-time high with exports reaching CHF 24.8 billion, marking a 14% increase from pre-pandemic figures. This growth occurred amidst intermittent lockdowns in key markets like China, suggesting the industry's capacity to navigate crises.

Source: Federation of the Swiss Watch Industry FH, Deloitte research

1.2 Factors Fueling the Momentum

  • Tourism: Global tourism saw a resurgence with nearly one billion international arrivals, rejuvenating demand.
  • MoonSwatches Phenomenon: Over one million MoonSwatches were sold in 2022, propelling growth even in lower-end segments.
  • The Pre-owned Market: Contributed significantly through volumes sold and price premiums.

2. Diverse Market Dynamics

2.1 The US and China Dominate:

While the US retained its position as the biggest single market, China, despite its economic challenges, remained pivotal, especially for European sales.

2.2 A Look at Emerging Markets:

India has showcased healthy export growth, hinting at its potential as an emerging powerhouse in the luxury watch segment.

Source: Deloitte research

3. Overarching Concerns

3.1 Geopolitical and Economic Challenges:

Executives cite geopolitical uncertainty and inflation as top concerns impacting the industry.

3.2 Talent Crisis:

The art of luxury watchmaking is under threat. With a need to recruit and train 4,000 professionals by 2026, brands are investing in nurturing current and future talent.

4. Glimpse into the Future

4.1 An Air of Optimism:

While executives exude confidence in the Swiss economy and export markets, they exhibit a mix of optimism and caution for the industry's immediate future.

4.2 Market Hotspots:

India emerges as a promising market, while China's prospects seem divided among industry leaders.

5. The Rise and Stabilization of the Pre-owned Market

5.1 Market Landscape:

While the pre-owned market experienced a surge during the pandemic, values normalized in 2022. Despite challenges, industry stalwarts like Cristiano Ronaldo are backing its potential.

5.2 Brands Embracing Pre-owned:

Notably, Rolex's Certified Pre-Owned programme indicates the luxury segment's strategic shift towards embracing this market.

5.3 Consumer Perspective:

Consumer intent to purchase pre-owned watches is rising, especially in regions like Hong Kong, UAE, and the US. However, traditional markets like Japan still prioritize 'newness'.

6. Concluding Thoughts

The Swiss watch industry, emblematic of timeless elegance and precision, navigates the tumultuous waters of global uncertainties. Adapting to changing consumer behaviors, embracing the pre-owned market, and strategizing for future talent needs, the industry is set to continue its legacy of excellence and innovation.

Note: This is a condensed breakdown of the Deloitte Swiss Watch Industry Study 2023. For a detailed analysis, readers are encouraged to refer to the complete report.

https://www2.deloitte.com/content/dam/Deloitte/ch/Documents/consumer-business/ch-deloitte-swiss-watch-industry-study-2023_EN.pdf

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