The Swiss watch industry – the third largest national exporter after chemicals and machines – is recovering after a difficult year in 2016, caused in part by the strength of the franc and in part by changing conditions in China, one of its most important markets.
Figures from the Federation of the Swiss Watch Industry showed an increase of 3.8 percent in Swiss watch sales from the same month in the previous year – a monthly value of 1.4 billion francs. In the first eight months of the year, Swiss watch sales to China increased 19 percent, recovering from a slow 2016, when China introduced tougher customs rules and new anti-corruption laws that affected the tradition of gifts in business and political life. The franc’s slide against the euro also contributed to growth in countries including Spain, Austria and the Netherlands.
Swiss mechanical watches have “lasting appeal,” says Oliver Ebstein, managing director and owner of Lucerne-based Chronoswiss. The company’s main markets are in Europe, the U.S. and China. “Last year was a difficult year for the market in general,” he says. “This year, there has been a recovery.”
The Swiss watch industry has survived more turbulent times. In the 1970s and 1980s, it shrank dramatically due to the emergence of the quartz watch. The workforce shrank to 30,000 in 1984, a third of its size in 1970. Chronoswiss was founded in 1983, during the quartz crisis, in part because its founder believed in the future of mechanical watches.
Since then, the mechanical watch has staged a comeback and 57,300 people were employed in the industry in 2013. Asia absorbs 53 percent of Swiss watch exports by value, Europe 31 percent and America 14 percent.
The Swiss watch industry benefits from the country’s association with quality products, Ebstein says. Chronoswiss specialises in luxury watches, including timepieces tailored according to individual requirements. Luxury mechanical watches are less vulnerable to the fierce competition from smart watches that has plagued makers of cheaper models in recent years, because they are not competing in the same price segment, Ebstein says.
“The secret is not to stand still, but also not to destroy traditions dating back hundreds of years,” he says. “They are after all the special charm of mechanical watch-making.”
He sees digitalisation as an important area of development for the company – even if its products are mechanical. Though the company relies heavily on word-of-mouth for its brand reputation, it began online sales in 2015. “Personal contact is very important, but people go online to find the first information,” Ebstein says. “We are at the beginning of new buying experiences in the digital world.”
Chronoswiss has also begun accepting Bitcoins in its boutiques and online store, Ebstein says. “We are one of the first in the luxury segment to do this.”