A 16.6% fall in exports to China caused global exports of Swiss watches to dip by 0.9% in July, despite continuing strength in the United States and UK.
Exports to the USA rose by 5.2%, compared to July 2022, and the UK was up by 5.6%.
The economic slow down in mainland China, which is struggling to bounce back after lifting severe covid restrictions later than the rest of the world and grappling with a credit and real estate crisis, is hitting investor confidence for major watchmaking groups.
Swatch Group, which before the pandemic was generating half of its revenue from Chinese customers, either at home or abroad, has seen its share price fall by almost 20% since mid-July.
Richemont stock has also dropped by 20% in the past month.
Although July was soft, 2023 is still on course to be another record year, surpassing the CHF 25 billion in exports by Swiss watchmakers in 2022.
The US market is comfortably the largest in the world for Swiss watch exports, up 9.1% to CHF 2.4 billion so far in 2023.
That dwarfs the once leading Chinese market, which has imported watches valued at CHF 1.6 billion since the start of the year and Hong Kong’s CHF 1.4 billion.
China’s modest rise of 16.1% for the year to date, and Hong Kong’s 26% increase, are particularly disappointing since they were still severely limiting international travel and imposing stringent local lock downs until January this year.
The UK market is showing notable resilience with 7.5% growth in Swiss watch imports (valued at CHF 985 million) since the start of the year despite anaemic economic growth, stubborn inflation and the challenge of VAT rebates being withdrawn for shoppers from overseas.
