Why Swiss Watchmakers Are So Nervous

Why Swiss Watchmakers Are So Nervous?

The watch Market is Untouchable don’t believe us take a look at what has been going on around the world none of the instability caused by the crisis in Ukraine China’s strict lockdowns inflation falling stock markets or crashing cryptocurrencies has affected the export of watches there was a nearly

13 percent growth in their worth from January and may of this year compared to 2021 which was a record-breaking year for the sector overall it has been a few bumps here and there all right but it has been a successful run so far but Swiss watchmakers are getting

Nervous by the minute why as it turns out nothing is as it seems sales records have been announced by companies throughout the whole price Spectrum growth is driving expansion efforts like CD peacock’s 20 million dollar plus building project which is a solid sign that the good times are here to stay

However there are warning indications that show 2023 could not be altogether trouble free the luxury watch sector is now seeing on average price tags of more than seven thousand dollars per piece and this is driving the new trend of should we say uncertainty as of last year such luxury watches accounted for

Roughly 75 percent of the total value of Swiss watch exports now according to statistics published by the Federation of the Swiss Watch industry the total number of watches shipped has stayed relatively constant since the beginning of the year going up by 2.3 percent and we have to admit this Global obsession

With expensive timepieces is new even many watch Consultants are surprised but here’s something interesting the hottest modern timepieces including the Rolex Daytona Patek Philippe Nautilus and odima pig Royal Oak have seen the resale prices drop by as much as 50 percent since their January highs the market

Slumped that started in April has scared off some investors now we’re being presented with Humanity’s worst enemy uncertainty you see when prices for Patek Rolex and Audemar Classics drop to more realistic levels in the secondary Market it’s a sign that the primary Market is beginning to cool off

So what do you think good or bad however it’s safe to say that things are not going as usual the microeconomic aspect is fraught with uncertainty the rate of interest is rising President Biden still avoids the subject of the economic downturn there isn’t a lot to be excited

About here but there aren’t any red flags either so it feels like we’re being pulled in separate directions such reluctance is typical among seasoned watch business Watchers no one in March of 2020 could have foreseen that the epidemic would Usher in a time of exponential expansion according to

The Federation of the Swiss Watch industry’s year-end report for 2021 Swiss watch exports peaked that year at 23.3 billion Swiss Francs or roughly 23 billion dollars a 2.7 increase over 2019 and as we’ve seen it has been way better this year so to the big puzzle why are

Swiss watchmakers so nervous the experts agree that investors loaded with stimulus cash and crypto wealth are mostly responsible for fueling most of the frenzy over the previous two years they helped whip the market into a craze by routinely paying three four or even five times the retail value on secondary

Channels for scarce models until the crypto collapse in May interrupted the purchasing spree Maximilian Bosa founder and creative director of mbnf a boutique watch brand that saw its business boom during the pandemic stated on a phone call all the speculators are running for cover for many years before the Advent

Of the pandemic they consistently sold 90 to 115 percent of our output watch brands like Mr Blue Stars pretty much had to investigate every customer to determine if they were a genuine watch enthusiast or someone just looking to make a quick Buck off of their purchase today things are a bit different and

Well simpler the percentage of customers who are going into stores in search of profitable business opportunities is falling daily which is great news for the majority of watch manufacturers more than the conflict in Ukraine Rising interest rates double-digit inflation and the looming threat of a recession the polarization that separates the best

Performing brands from everyone else is what many members of the Swiss Watch sector are concerned about today thankfully Swiss made luxury timepieces are becoming increasingly popular among young people on the other hand some individuals are purchasing watches solely to resell them at a higher price on the secondary Market which is

Unhealthy speculation people who desire these watches very much but can’t seem to get their hands on them have expressed a significant amount of frustration about this situation emphasis on the significant more than half of the earnings in the watch industry come from only three independent Brands Rolex Patek Philippe

And odima pig AKA The Big Three and as a result most of the speculation is focused on the most expensive models produced by these companies this sort of mania has previously Afflicted pre-owned versions of specific models but never before have we seen it have such a profound effect on brand new versions of

Those same models the Outlook is not as bright for makers of affordable and moderately priced wrist watches the total number of watches shipped has dropped by half in the last two decades from 60 million in the early 2000s to just 15 million in 2021 companies who create reasonably priced watches under

The Swiss made designation are feeling the pressure of rising competition from smart watches and the popularity of non-swiss fashion labels like guess puma and Armani among younger purchasers here’s the thing folks luxury sales are important but not enough to sustain the watchmaking sector we believe a solid industrial basis is essential as

Economies of scale are required to recover investment expenditures Rolex and the Swatch group are two examples of successful watchmaking brands that have the resources to improve their production models over the past decade these businesses have either built up their in-house production capacities or acquired subcontractors with a particular focus on those working with

Mechanical movements and their components as a result the labels will have more say over manufacturing now because there’s a scarcity of subcontractors it’s difficult for smaller Enterprises to find independent suppliers this makes the situation much more difficult the success of the Swiss watchmaking industry can be attributed

To the vast number of highly trained individuals who are employed within the sector all of the independent contractors and business owners that contribute to the continued success of this industry are necessary concern has been expressed by Swiss watchmakers regarding the near Monopoly that a small number of Brands currently hold in the

Market even if they only make a few dozen watches per year for Rich hobbyists independent watchmakers benefit from a thriving Market let’s talk about cars for a second the more similar automobiles become the more people will covet the uniqueness of a few models the same applies to wrist

Watches collectors who want a unique timepiece Drive innovation in the industry so while we Rejoice that many youngsters are becoming interested in Swiss watches the question is this when they become older buyers in the next 10 years will the Swiss Watch trade still have hundreds of brands for them to

Choose from many industry insiders are of the impression that the answer is no as mergers and the growing influence of the big three Rolex Patek Philippe and odima pig pose a danger to Independent Producers while there is the possibility of Brands like Leisha mil showing up and

Shaking the industry it would be a rarity indeed contrary to popular belief there is no space for everyone when the market is thriving and the money is pouring there is room for everyone but that time has passed natural selection has been severe and it’s just going to

Get worse in the next year or two years we must be practical but that doesn’t mean everything is Bleak or do you think it is this new trend of uncertainty might not go away for a while but we do know one thing there’s nothing quite like a mechanical watch

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