ZURICH: The United States overtook Hong Kong as the No.1 market for Swiss watch exports in July as cash-strapped watch retailers in Hong Kong held back from ordering new timepieces.
Swiss watch exports dropped 14.2% in value terms in July, taking the decline for the first seven months of 2016 to 11.1%, the Swiss watch federation (FH) said in a statement on Aug 23.
Exports to Hong Kong fell 33% in July, while shipments to the United States declined 15%, meaning the United States is now in first place with a 10.9% overall market share, versus 10.7% for Hong Kong.
Demand for Swiss watches is down because fewer tourists – particularly from China – are visiting Europe's luxury shopping hubs in the wake of recent attacks and the Hong Kong market collapsed after a Chinese Government crackdown on corruption.
Britain was a bright spot, posting a 13.4% rise in value terms in July, as the fall in the pound triggered by the June vote to leave the European Union created a price gap with other markets.
France remained weak as fears of terrorist attacks kept tourist shoppers away and sales to Germany fell almost 24%.
The data shows a particularly steep decline for watches with an export price of less than 200 Swiss francs (RM837.30), with volumes down almost 20%, indicating the rise of smart watches like the Apple Watch may have an impact.
"Swatch should join the 'smart watch' rush – in partnership with one of the prevailing ecosystems. Android appears its best bet," Exane BNP Paribas analyst Luca Solca said in a note.
"Self-cannibalisation would be better than losing share to new entrants, or faster paced peers like TAG Heuer."
Swatch Group shares were flat at 1121 GMT (7:21pm Malaysia time), while Richemont rose 0.5%, underperforming a 0.7% higher European sector index. — Reuters
Already a subscriber? Log in
Get 20% OFF The Star Digital Access
Cancel anytime. Ad-free. Unlimited access with perks.
