In the past two days, the Swiss Watch Industry Federation just announced the details of Swiss watch exports in March. The total Swiss watch exports in March totaled 1.473 billion Swiss francs, a sharp drop of 16.1% compared with the same period in 2015. It became the worst year for March since 2011. The release of data in March announced that the situation of the total Swiss watch exports in the first quarter has been clear. Since the entire first quarter included the two most important watch exhibitions in the watch industry-SIHH and BaselWorld, the total export volume in this period was relatively high. And because of the direct opening of the consumption boom after the year, the total amount of Swiss watch exports in the first quarter was relatively large. However, with the slump in the Hong Kong market, the total Swiss watch exports in the first quarter were only 4.657 billion Swiss francs, a year-on-year decrease of 8.9%. The Hong Kong market slumped 31.6% year-on-year. Of the more than a dozen countries with the largest consumption of watches and clocks, only Germany and Japan experienced significant growth. With such a start, it is difficult to imagine what kind of results will end in 2016.
Swiss watch exports data for March 2016
I do n’t know if it’s coincidence or inevitable. Since China began implementing anti-corruption policies in 2014, the entire luxury goods industry has suffered varying degrees of damage. Although such policies are good for the overall economic development in the long run, but for luxury goods, The influence of the industry has really troubled brand manufacturers. In 2015, China’s second- and third-tier cities and even first-tier cities experienced a wave of store withdrawals. The high rents and decreasing passenger flow of many shopping malls gradually lost their appeal as business districts. Chanel, LV, Gucci, Dior and other international luxury brands closed a large number of stores in China last year, while other brands in good condition, even if there are new stores in China, but the number is very limited. This year, the trend of high-end luxury brands to withdraw their stores is still Ongoing.
Consumer watch market data in the first quarter
Although there are many factors affecting the luxury market, all the spearheads seem to point to Hong Kong. Whether it is watches, cosmetics, luggage, etc., the sharp decline in the Hong Kong market is currently the main reason for the sluggishness of the luxury market. Since last year, Hong Kong, which has been regarded as a shopping paradise, continues to report the slowing market, and the news of luxury brand withdrawals is more serious than domestic. It used to be the high-end luxury goods gathering area such as Harbour City and Central. The high rents and the exploding consumer market have gradually seen many less high-end brand businesses settle in. According to tourism data, since last year, mainland tourists traveling to Hong Kong have fallen sharply. According to data provided by tourism companies, during the May 1st this year, the number of tourists going to Hong Kong will drop by about 90% compared to previous years. This is a very scary For a port city like Hong Kong that is driven by the tourism economy, the absence of tourists means no consumption. The sharp decline in mainland tourists is an important reason for the shrinkage of Hong Kong’s luxury market. According to previous news reports, the attitude of Hong Kong service personnel, the exclusion of tourists by Hong Kong people, anti-water tourists, and unrest in travel activities have led to Hong Kong. Gradually lost its appeal.
According to the latest consulting company statistics, mainland tourists’ spending power on luxury goods and overseas shopping is still very strong, but everyone has moved from Hong Kong to Japan, France, Germany and other regions. Some time ago, foreign news reported that the shopping spree of mainland tourists swept through Paris because the euro was weak and everyone wanted to buy goods cheaply with prices. It can also be seen from the first-quarter data of Swiss watch exports that Japan and Germany are two very popular luxury consumer countries. Not only can they rebate taxes, but they also have low tax rates and cheap prices, and they do not have to worry about buying fakes.
With the end of the first quarter, several luxury goods groups have also released the first quarter statements. Among them, the old luxury brand group LVMH’s global overall performance in the first quarter rose 4%, compared with the same period in 2015, an organic growth of 3%. The European and American markets, except France, performed well. The Asian market in Japan continued to show growth. Jewellery and watches grew organically by 7%, surpassing market expectations. Bulgari, Tag Heuer, and other brands’ new products on BaselWorld had a good response. . Chow Tai Fook’s financial report for the first quarter of 2016 is worrying. The retail value and same-store sales of its stores both fell by 26%. Not only Hong Kong, mainland Chow Tai Fook’s same-store sales and retail value fell by 25%, but Macau also fell by 22%. Luxury brand Gucci’s actual revenue growth in the first quarter was 2.9%, which is a good achievement among its peers. Among them, retail sales in Western Europe increased by as much as 20%, which has become the largest driving force for Gucci’s actual growth. The US market and the Asia-Pacific (except Japan) market Both showed declines.
Swiss watch industry hiring is not as good as in 2014
Although there is no clear data showing whether the development of smart watches and e-commerce platforms has an important impact on luxury consumption, it is clear that the decline in demand for watches and clocks is objective. Greater regulation of cross-border e-commerce and entry goods may further reduce the luxury consumer market. The shrinking of the watch market has also directly affected the production departments of brand manufacturers. According to the statistics of the recruitment of Swiss watch brand employees in 2015, compared with 2014, the number of Swiss watch manufacturer employees has decreased significantly, and employees have applied for employment. The number of people is also declining, which means the overall scale of employment is shrinking.
Of course, this is not a crisis of the industry, but just a transitional response to the regulatory process after the explosive growth of the Asian market. If this period is passed safely, then the economic development will continue to drive luxury consumption steadily.