Swiss watch industry recorded the worst result since 1984

Switzerland exported the fewest quartz watches in 33 years as competition from fitness bands and smartwatches pummeled the low end of the market and forced the industry to refocus on more expensive mechanical timepieces.

Swiss watchmakers shipped 17 million quartz and electronic timepieces in 2017, the lowest number since 1984, according to statistics published Tuesday by the Federation of the Swiss Watch Industry. By value, that was worth 3.5 billion francs ($3.7 billion), down 3.8 percent from 2016.

Exports grew by 2.7 % to CHF19.9 billion ($21.3 billion) on 2016. “Growth returned sooner than expected,” said the FH in a press release.

The biggest driver was the Asian market, which experienced the biggest growth (+4.8%) and generated half of all export sales. The largest market was Hong Kong, with exports worth CHF2.5 million.

Some traditional watchmakers are making tentative steps in the fast-growing wearables market via technology partnerships and investments. This includes Tag Heuer, Frederique Constant and a number of others.

But the industry’s unique positioning in the luxury segment, the strong brand image, the appeal of the Swiss Made label, all offer opportunities to traditional Swiss watchmakers. Particularly in the high-end part of the market. And it is precisely the luxury mechanical watch segment which helped overall Swiss watch exports increase 2.7% in 2017 to $21bn. This was the first rise in three years.

Only time will tell whether quartz Swiss watchmakers manage to turn market fortunes around. If it is to survive, this part of the industry cannot afford to ignore the potential opportunities and threats posed by the new smartwatch segment.