It turns out, 2019 has been a pretty terrible year. Not just due to the melting of the icecaps, the blazing forest fires, our youth skipping class every Friday and all those things. It seems, the Swiss watch exports have turned rather dark and gloomy as well.
Reason being? The decimation of the affordable range which has taken up momentum as of 2015. Note the drop in number of units sold specifically under the Electronic category. Coincidentally this is also the exact time that saw the introduction (2015) and stellar rise of the Apple watch and consorts.
Now I hear you, yes indeed Hong Kong unrest and Paris unrest and all that sort of jazz didn’t help. But that’s all just a temporary distraction (from a watch industry perspective) of the real issue here. The death of the affordable range is real indeed.
This does not bode well for brands such as Swatch. This price segment being under heavy silicon artillery is also the key reason why we see for example that brands such as Seiko are moving upmarket and will continue to increase prices (and hopefully also increase value). Swatch and similar brands are likely to do the same.
The total value data is visibly less gloomy, meaning the Swiss happily take more of your money while selling you dramatically less units. A logical conclusion of the ever increasing prices which surely every watch enthusiast has been feeling for the last couple of years now. At what point does that strategy backfire though, I’m not sure.
As per a brief Bloomberg analysis, in addition to the lower market segment getting absolutely torn to pieces, it seems that the money has been slowly shifting towards the vintage market as well. In particular Rolex and Patek Philippe.
The Watch Industry is perhaps not the most innovative of industries, but surely when demand for your ‘old’ products starts to actively threaten demand for your ‘new’ (same old same old) products the time has come to look at why that is happening and what can be done (PS: The answer is anything except hiring more brand ambassadors)