Asian appetite for Swiss timepieces returns
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Asian appetite for Swiss timepieces returns

2018 has been a great year for Swiss watches so far. The industry has seen stronger growth this year than it has for half a decade, largely down to a resurgence of demand from Asia. On Tuesday, the Federation of the Swiss Watch Industry reported that shipments rose by 13% year on year to $1.7 billion in January. That marks the ninth consecutive month of gains, and the biggest jump since October 2012, as Asia gears up for a later than usual Chinese New Year.

China and Hong Kong drive Swiss Watch exports higher in January

graph 2202 asian

January is not the beginning of the Swiss Watch recovery story – last month’s surge in demand follows the first annual gain since 2014. That year marked disaster for Swiss Watch exports. China, long a driver of growth for the industry, saw President Xi Jingping’s austerity drive begin. The practice of gift giving, which Beijing curtailed, put a (huge) dent in the country’s demand for luxury timepieces. 

President Xi Jingping isn’t solely to blame for the Swiss Watch industry’s downturn. The debut of smartwatches and a spate of terrorist attacks in Europe also contributed to it. Terrorism, however, only affects business for so long – markets and people are far more resilient than terrorists would like. And smartwatches have failed to capitalize on the interest they originally generated – it is also notable that a number of Swiss Watch companies have enetered the market, and may well wind up leading the trend forward.

Swiss Watch maker Richemont’s share price is up 20% over the past year

graph 2202 asian 2

SOURCE: Yahoo Finance

Zuzanna Pusz, a Berenberg analyst, explained the significance of a strong January to clients in a note, saying: “While we note that the data in January benefited from a range of favorable factors, the sudden strong acceleration in growth, if continued, could confirm the beginning of a long-awaited restocking cycle among multibrand watch retailers.”

Disclosure

Dominion holds Richemont, one of the world’s largest Swiss Watch makers, in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.