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    What part could China play in a luxury watch revival?

    After a steep decline from pandemic highs, the luxury watch market may be primed for a resurgence, underscored by Bitcoin’s recent turnaround and a possible boost in demand in Greater China.
    Swiss watch exports to mainland China fell 25% in February compared to the previous year. Image: Shutterstock
      Published   in Hard Luxury

    After experiencing a downturn from pandemic-era highs, the luxury watch market may be primed for a resurgence, underscored by Bitcoin’s recent turnaround and still-high demand in Greater China and the US.

    This week, the Bloomberg Subdial Watch Index, which monitors the transaction values of the top 50 most traded luxury watches, showed a marginal 30-day increase of 0.04% to reach $33,636, suggesting a stabilizing market. The index has remained relatively flat over the past five months, falling only 1.05% since October 19, 2023.

    That said, the index has plummeted more than 42% since March 31, 2022, with that peak largely fueled by a cryptocurrency boom, Covid-19-induced supply crunch, and lower interest rates. Since then, prices have been in relative freefall amid the cryptocurrency crash of late 2022, an ongoing global cost of living crisis, and a supply glut on the secondary market.

    The Bloomberg x Subdial Watch Index is down 42.5% over the past two years.
    The Bloomberg x Subdial Watch Index is down 42.5% over the past two years.

    However, in recent weeks, the potential for lower interest rates has lifted both stocks and Bitcoin, with the latter seeing its value more than double since October to reach $68,485.74 as of March 18. If these trends continue, the stage could be set for a long-awaited recovery in pre-owned luxury watch prices.

    Although Swiss watchmakers are likely to remain cautiously optimistic about the possibility of a recovery in 2024, all indications are that the market will remain shaky for the foreseeable future. In an announcement on March 19, the Federation of the Swiss Watch Industry announced that the value of exports declined by 3.8% in February compared to the same period last year, reaching 2.15 billion Swiss francs ($2.4 billion). Watch export volume also decreased, by 5.2%, with Switzerland exporting 1.2 million timepieces in February.

    The luxury watch sector, especially in Switzerland, faces a critical juncture worldwide, which is arguably more pronounced in Greater China. Amid an economic deceleration in mainland China, demand for Swiss watches has oscillated over the past year.

    From January to October 2023, collective imports in mainland China and Hong Kong reached $5 billion (CHF 4.3 billion) despite, around 24 percent more than the US imported over the same period.

    However, this momentum has yet to bleed over into 2024, with Swiss watch exports to mainland China falling 25% in February compared to the previous year and shipments to Hong Kong dropping 19% over the same period. Conversely, the US retained its position as the leading destination for Swiss watches with a 5.5% increase in exports in February. Meanwhile, the Federation of the Swiss Watch Industry noted that exports to the UK fell by 2.1% that month.

    A slight uptick in the Bloomberg x Subdial Watch Index over the past 30 days could signal improving fortunes in the luxury watch market.
    A slight uptick in the Bloomberg x Subdial Watch Index over the past 30 days could signal improving fortunes in the luxury watch market.

    Notably, the luxury watch market in China and Hong Kong is shifting in terms of consumer behavior and preferences. Despite a murky macroeconomic outlook clouded by high youth unemployment and fears of deflation, the Chinese market for Swiss watches grew by 9% from January to October 2023 compared to the same period in 2022, albeit remaining 5% lower than in 2021.

    This restrained post-lockdown recovery is sparking cautious optimism among luxury watch brands, even as they have sought to diversify their geographical reach and reduce their dependence on China in recent years.

    Looking ahead, the Swiss watch industry is divided on its prospects for 2024 in China, with executives split almost evenly between those anticipating growth and those expecting stagnation or decline. This split decision underscores the uncertainty pervading the market, and highlights a cautious optimism that growth is on the horizon.

    Patek Philippe and Rolex watches continue to offer investors greater ROI than gold or silver.
    Patek Philippe and Rolex watches continue to offer investors greater ROI than gold or silver.

    Contributing to this optimism is a trend towards luxury watches as investment pieces, driven by their potential to maintain, or increase in value. Over 30 percent of consumers in Hong Kong expressed interest in purchasing watches as a hedge against inflation, suggesting a shift towards viewing luxury timepieces not only as status symbols, but also as strategic financial assets.

    With the latest installment of Watches and Wonders set to kick off in Geneva on April 9, watch collectors and retailers eagerly await new models from the likes of Rolex and Patek Philippe. This event, coupled with the possible stabilization of watch prices, continued demand from Greater China, and a parallel resurgence in Bitcoin, suggests a market that could take on new life in 2024.


    • After a significant downturn, the luxury watch market shows signs of potential resurgence, influenced by Bitcoin’s recovery and fluctuating demand in Greater China and the US.
    • The Bloomberg Subdial Watch Index indicates a stabilizing luxury watch market, with a slight increase amid a challenging economic backdrop characterized by cryptocurrency volatility and a global cost of living crisis.
    • Despite the challenging economic climate in mainland China, demand for Swiss watches remains substantial, highlighting the resilience and shifting consumer preferences within the luxury watch sector in the Greater China region.
    • Brands eyeing the Greater China market should focus on understanding and adapting to evolving consumer behaviors and preferences, recognizing the potential of luxury watches as both status symbols and investment assets amid economic uncertainties.
    • Moving forward, the luxury watch market may experience revitalization in 2024, driven by a combination of factors including the potential stabilization of watch prices, a renewed interest in luxury watches as financial investments, and the anticipation of new releases from prestigious watchmakers at Watches and Wonders in Geneva.
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