PARIS – For Swiss watchmakers, 2023 ended on a double high note, according to figures published Tuesday by the Federation of the Swiss watch industry.
Not only did foreign sales of Swiss timepieces in December grow 5.5 percent year-on-year, the strongest result in six months, but annual exports totaled 26.7 billion Swiss francs, a 7.6 percent year-on-year increase and a near 20 percent gain on 2021’s already record year.
In the final month of 2023, performance was uneven by geography compared to the previous year, the organization commented. The U.S. “performed better than expected,” it said, with an 11.6 percent increase that saw it cement its position as leader.
Despite a modest 1.7 percent growth, even against a low comparison basis, China muscled back into second place.
Although its post-pandemic reopening had been seen with hope by the luxury industry, this did not result in a boom as its consumers grappled in the second half of the year with macroeconomic uncertainties, particularly the middle class and high-income individuals.
Hong Kong, Japan and the United Arab Emirates were also highlighted as strong performers, with increases of 15.2 percent, 26.8 percent and 11.8 percent, respectively.
The U.K. lagged behind, posting a 12.1 percent drop which saw the country not only lose its fourth place but drop entirely from the monthly top six markets, which account for more than 50 percent of overall exports. Singapore, Germany and South Korea also ended the year with single-digit decreases.
All markets grew year-on-year in 2023, except for South Korea, Qatar and to a lesser extent Bahrein. The two-year comparison against 2021 is even more striking, with high double-digit growth in the top 10 markets, bar China where the zero-COVID-19 policy remained in place until last January.
December’s results highlighted the trends that have underpinned recent years, in particular premiumization and price polarization.
In the final month of 2023, exports of watches priced below 200 Swiss francs at export price jumped 12.8 percent and those retailing over 3,000 francs by more than 9 percent. The middle segment contracted once more, slumping 9 percent.
Leaving Switzerland at a brisk pace were gold-and-steel watches, with sales up 21.8 percent in exported value and 28.5 percent in the number of units, although the category amounts to less than 10 percent of the overall watch offer. Precious metal watches also strongly contributed to the export turnover.
Steel watches, which account for nearly half of the watches exported, contracted slightly in volume and value, while the next largest “Other materials” category grew 6.1 percent in the number of units leaving the country, although value remained flat.
Looking at the full-year picture, the number of wristwatches exported also grew in 2023, hitting 16.9 million pieces, its highest figure in four years.
This lent credence to Bain & Co’s recent analysis that the watch market will continue to thrive, despite “a rising polarization around few industry winners.”