Swatch Expects Entry- To Mid-Range Lines To Perform Well This Year
Coming off a tougher 2012, during which many wealthy Chinese consumers either took a wait-and-see approach to luxury purchases close to home, or did their luxury shopping overseas, Swiss watchmakers expect renewed — albeit modest — growth in 2013. Heartened by signs that demand returned at the end of the year, particularly in Hong Kong, where sales of jewelry, watches and other valuables increased nearly 14 percent in November, leading luxury groups are expected to continue their Greater China expansion efforts this year, with Richemont recently partnering with Chow Tai Fook to take its Baume & Mercier brand to a wider audience.
One company closely eyeing the market this year is the Swatch Group — owner of Breguet, Blancpain, Omega and many more — which this week announced conservative projections for China in 2013. As CEO Nick Hayek told Bloomberg, he expects the market to grow by about 10 percent this year — more than double the 4.4 percent growth seen by Swiss watchmakers in the first 11 months of 2012 but far behind the 49 percent rise in Swiss shipments to China in 2011.
However, it must be said that China’s luxury market as a whole is a very different place now than it was in 2011, when first-time buyers went on a nationwide buying binge and top brands made their first appearance in many cities. Overseas travel with the intent to make big-ticket purchases has also become more accessible in the last two years, and is no longer reserved for the ultra-wealthy. Add to that the highly publicized scrutiny of government officials’ luxury watches and 10 percent sales growth looks pretty respectable.
Swatch’s Hayek hinted that the greatest action in the China luxury watch market this year may come from “the mid-range and entry-level,” singling out Group-owned brands like Longines and Tissot — both of which have massive brand recognition and years of experience in China. Added Hayek, “In the high-end, they might have a little bit less sales, but you can’t grow every year by 50 or 60 percent.”