Strong Mainland China demand boosts Swiss watch industry

7 September 2021 – Jointly organised by the Hong Kong Trade Development Council (HKTDC), the Hong Kong Watch Manufacturers Association and the Federation of Hong Kong Watch Trades and Industries, the special edition of the 40^th Hong Kong Watch & Clock Fair and the ninth Salon de TE begin tomorrow at the Hong Kong Convention and Exhibition Centre. To help industry participants grasp the latest market information and trends and formulate strategies for post-pandemic growth, the three organisations hosted the Hong Kong International Watch Forum on 30 August. The forum invited watch association representatives from Mainland China, France, Germany, Hong Kong, Japan and Switzerland to share on the watch industry’s current trade performance in the region and offer perspectives that can help the global watchmaking industry continue to move forward.

Swiss representative – US demand has also rebounded

Even though the pandemic has battered the global economy and posed significant challenges for the watch and clock industry, the speakers’ view was that markets are steadily recovering. They noted that imports, exports, production volumes and profits have all rebounded from the depths of 2020, although still remain shy of 2019 levels.

Thierry Dubois, the representative from Switzerland’s Federation of the Swiss Watch Industry FH, explained that Swiss watch exports during the first six months of 2021 have improved year-on-year. In 2020, the country’s total exports dropped 21.7% compared to the previous year. However, the total export value remained on a par with that of 2019, dipping only 0.5% to 10.6 billion Swiss francs. This was thanks to the Mainland China market, which has seen a surge in demand for luxury Swiss watches since last summer. Demand from the US also began picking up from March this year, which was sooner than the Swiss watch industry anticipated.

Mr Dubois pointed out that Asia now represents the largest market overall for Swiss watch exports, with Mainland China being the leading market, followed by the US, Hong Kong, Japan and Singapore. He foresees that by 2025, the mainland’s consumption will pull further ahead and account for 46-48% of all luxury watch purchases.

He added that the pandemic has created new consumer habits, with prolonged lockdowns giving consumers more time to reflect on their watch purchases and make new discoveries. “We have observed that online sales quickly replaced physical sales, as shops had to close during the lockdowns. In 2019, online sales represented 10-15% of total sales of luxury products. We expect this will rise to 30% by 2025. At the same time, the importance of social media for communication, interaction and sales has continued to grow. Livestreaming has exploded, and the trend is particularly visible in Asia. With the increase in e-commerce, the demand for efficient logistics and delivery has also climbed, because today’s online shoppers expect swift product deliveries once they have placed an order,” said Mr Dubois. He remarked that there has also been a notable increase in the demand for “pre-owned” watches — or watches that have been possessed by someone else — which is expected to rise by 15-20% within four years.

German representative – physical stores remain attractive

Guido Grohmann, the representative from Germany’s Federal Associations of Jewellery, Watches, Silverware and Supplying Industry e.V. (BVSU), said the country’s exports of watches, clocks and parts saw a significant year-on-year decline of 14.1% in 2020, including falls of 7.5% in the European Union (EU) and 16.4% in Asia. The situation was largely echoed in imports. In 2020, German imports of watches, clocks and parts fell 6.2% compared to the previous year, with the biggest decline registered in Asia, at 8.7%. Despite this, imports from the EU rose 28.5%, with logistics operating more smoothly among EU countries. In 2021, both exports and imports continued to strengthen during the first five months with imports faring even better than the same period in 2019.

While e-commerce continues to gain popularity, Mr Grohmann said that offline stores are still maintaining their attractiveness. He remarked that even though lower-priced products were sold online during the pandemic, consumers still preferred going to stores to buy high-end products as it allows them to try out the luxury goods. As for logistics, he noted, “The COVID crisis has reflected that we still have huge problems within the supply chain, especially in shipping parts. Industries are looking into reinventing local suppliers in Europe to attain a more secure supply chain. It would be much better if the world’s governments [could] focus on how to re-enact the fast and solid supply chain that we used to have. From the watch industry’s perspective, we have to discuss this on a global level. It is difficult, but it can be solved.”

The Hong Kong International Watch Forum was held as a webinar on 6 September. A replay will soon be available on the Watch & Clock Fair website.

Hong Kong Watch & Clock Competition identifies local design talent

To raise the design standards of the Hong Kong watch industry, nurture local designers and inject new impetus into the industry, the HKTDC collaborated with the Hong Kong Watch Manufacturers Association Ltd and the Federation of Hong Kong Watch Trades & Industries Ltd to organise the 38^th Hong Kong Watch & Clock Competition. This year’s competition was once again divided into the Open Group and the Student Group, adopting the themes of “Minimalism” and “Live Fully” respectively. About 90 high-quality entries were received, from which a panel of 10 judges from various sectors selected the winning entries.

The results of the competition have been announced and the champion in the Open Group was Tam Kwok-tung for his design titled “SPACE_BAR”. Housed in a transparent container, the design beautifully encapsulates the simplicity of the watch’s movements. The first runner-up prize was claimed by the Ballerina Watch Company Limited and its design “Singing Bowl”. The design forgoes a traditional watch crown to accentuate the unified and symmetrical watch case design. Second runner-up was Wong Ting-bong for his design “D012”. The unique open design of the minute dial is topped with a linear second hand, which perfectly represents the concept of points, lines and surfaces as the hands move.

In the Student Group, the Hong Kong Design Institute’s Yip Tsz-yan was crowned champion for her design “Insight”. Her watch’s bezel and glass are made with a diamond-cut design, and the case-back contains fancy glass that refracts light and reflects colours. Ho See-long from the Technological and Higher Education Institute of Hong Kong claimed first runner-up with her design titled “Serendipity”. The design reflects the idea that the happiness and fortune people seek may already be surrounding them and that every trivial matter in daily life can be a miracle. The second runner-up prize was taken by another Hong Kong Design Institute student, Pui Hong-yiu, whose design “Expedition” drew inspiration from the film Around the World in 80 Days. The watch’s oversized design symbolises the confidence and motivation for taking an expedition, while the mini globes on the face can display the wearer’s location.

The champions of the Open Group and Student Group will be sponsored to attend the INHORGENTA MUNICH 2022 trade fair in Germany. All the winning and finalist entries will also be displayed during the Watch & Clock Fair to showcase Hong Kong’s design prowess to global industry participants and the general public.

Renowned watchmaker shares tips on luxury watch investment in Mainland China

In addition to the above events, the annual Asian Watch Conference will be held on 9 September during the Watch & Clock Fair. With the theme, “Redesigning the Future of Luxury Watches”, experts will look at the future for the luxury watch sector from the perspective of product design trends and marketing strategies, helping watchmakers and manufacturers to be more future-ready. Trade professionals interested in attending the conference can register at the event website.

Meanwhile, a sharing session titled “Global Luxury Watch Investment and Market Outlook in Mainland China” will be held on the afternoon of 10 September. John Ng, Horologer of Montres S.A., who is known as the only Asian disciple of master watchmaker Philippe Dufour, will be joined by Ho Sai-chu, Chairman of Chih Lo Lou Art Promotion (Non-Profit Making) Ltd, as well as three auction house representatives: Cissy Ngan, Associate Vice President and Specialist at Christie’s, Mary Lee, Consultant at Sotheby’s and Jill Chen, Head of Watches, Hong Kong at Phillips. They will discuss global luxury watch investment and share insights on watch collecting, the prospects for watch investment in Mainland China, the role of young people in the watch industry, and the industry’s outlook in the Guangdong-Hong Kong-Macao Greater Bay Area. Interested trade professionals can register here.

The 40^th HKTDC Hong Kong Watch & Clock Fair and the ninth Salon de TE both begin tomorrow. The physical fairs will run from 8 to 12 September at the HKCEC, while the online version will run until 19 September. The hybrid format will help global watch traders explore more business opportunities. The five-day fairs at the HKCEC will open to industry buyers and, for the first time, also to the general public, offering local watch lovers the opportunity to shop for precious timepieces.

Fair websites

Hong Kong Watch & Clock Fair: hkwatchfair.hktdc.com

Salon de TE: hkwatchfair.hktdc.com/te

Media enquiries

Please contact the HKTDC’s Communications & Public Affairs Department:

Janet Chan                           Tel: (852) 2584 4369                       Email: janet.ch.chan@hktdc.org

Angel Tang                            Tel: (852) 2584 4544                       Email: angel.hc.tang@hktdc.org

About HKTDC

The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus. Follow us on Twitter @hktdc and LinkedIn