Nato Strap Collections' Financial Analyst Tommy Kardaras examines a study done by the Federation of the Swiss Watch Industry FH and points out some key trends and metrics that were identified in 2015.
Sitting here on a cool Friday, I thought I would read up on some recent findings about the watch industry and share that with you - specifically, what happened in 2015 with some of the main export and import countries for timepieces. My intent is to share some of these interesting findings with you when I get the chance. Hope you enjoy!
The study was written by the Federation of the Swiss Watch Industry FH and titled “The Swiss and World Watchmaking Industry in 2015” (Source: http://www.fhs.ch/file/59/Watchmaking_2015.pdf). This piece was interesting in that it speaks directly to the numbers - being a finance guy, the numbers are always interesting to me. I am highlighting some of the more key facts in the article. If you find them interesting I would recommend clicking the link above to read the full article.
- The total value of watch exports declined by 3.3% compared to 2014 (21.5 billion francs). This is the first downturn reported since 2009 and levels were comparable to that of 2012.
- Performance for steel, gold, and bimetal timepieces are summarized below:
- Quartz export sales were far weaker than that of mechanical watches (-9.9% vs -2.0%).
- In 2015, Asia sales for Swiss watchmakers declined by 9.1% compared to prior year. Europe posted a 6.1% increase vs. prior year and accounted for one third of total export sales. North America showed a 1.9% decline. See summary below for further details.
- In 2015, Switzerland shipped 22.4 billion dollars worth of timepieces to approx. 200 countries – down 3.3% excluding the impact of forex. (Switzerland is an industry leader in watch exports in dollar terms)
- In 2015, Hong Kong shipped 9.9 billion dollars worth of timepieces – down 4.6% excluding the impact of forex.
- In 2015, China shipped 5.8 billion dollars worth of timepieces – up 10% excluding the impact of forex. Overall, China is the main exporter of timepieces in terms of volume, exporting 628.8 million timepieces (up 2.4% vs. 2014)
- The main watch industry exporters are listed below:
- The main watch industry importers are listed below:
The facts speak a lot to a worrisome future outlook for the Swiss watch industry and it is largely driven by the global economic downturn - particularly in China. Just like all economic cycles; however, all companies and industries experience their ups and downs. Yes, 2015 may not have been as great as we would hope but I honestly believe that the long term prospects are far from bleak.
In the coming weeks I will be posting an article about an industry study done by a consulting firm. The study measures 2015 performance but also speaks to the impact of smart watches and how that will affect the industry. It is interesting to read how directors feel threatened by smart watches and are considering, more than ever, the negative implications they pose to traditional watch manufacturers. In my opinion, I believe there is a distinct difference between those who purchase smart watches and those who purchase traditional watches. With that said, I am a small fish in a big pond and others may see it differently. If you have an opinion we would love to hear it.
I hope you all have a great Easter weekend and until next time.
By: Thomas Kardaras