In June, the Swiss Watch Industry Federation announced the Swiss watch import and export data in May, showing that Swiss watch exports increased by 9% year-on-year in May, plus a reverse rebound in March ( 7.5%), basically setting the tone for the recovery of the watch industry. From January to May, we are glad to see two very important growth trends. One is that the total export value of Swiss watches and clocks continues to rise, and the other is that the Chinese market has rebounded very strongly. Let us believe that the watch and clock industry Is going out of the trough overall. Next, let us look at the most important driving force for the recovery of the watch industry from various aspects.
Swiss watch exports by material, January-May
First of all, from the perspective of materials, in this Swiss watch export data statistics, the material is one of the categories, and the material is divided into precious metals, steel, gold-steel, other metals and other materials, the first three are mainly mentioned here. From January to May, we saw that the total export value of precious metal watches has been increasing in value. Although it is in a state of decline year-on-year compared with the same period of the previous year, a strong inflection point appeared in May. 16% year-on-year growth. The same applies to steel models and gold-steel models. At the same time, we also see that although the value of steel watches is much larger than the export value of precious metal watches, the gap has gradually narrowed. This can be understood as that although steel watches are still very popular, gold models are being replaced by the market. Widely accepted.
From January to May, Swiss watch exports increased by material
In terms of materials, we can generally see a consumption trend, but it can not show the reasons that really promote the recovery of the watch industry, so only a brief summary, next we look at the most important regional factors. We know that Swiss watches and clocks are exported to the world. The economic, political and market conditions in each region are different. It is also the factor that has the greatest influence on the watch and clock industry. Luxury goods groups often formulate relevant market strategies based on regionality. Regional importance.
Statistics of Swiss exports from January to May published by the Swiss Watch Industry Federation
Data show that China (including Hong Kong) is the largest market for Swiss watch exports. From 2013 to this year, the market adjustment continued for four years, and finally saw a good turning point this year. For well-known reasons, Hong Kong, as a former shopping paradise, has gradually lost its appeal. Even if there is a possibility of recovery today, the total body mass can no longer be compared with the past. The Chinese market has clearly become a must-attend for Swiss watches. After experiencing a continuous wave of store closures from 2013 to 2016, the Chinese market began to recover strongly in October 2016, and has now continued to grow for 8 months. And since March of this year, the growth rate of Swiss watch exports to China has maintained an average year-on-year growth rate of 37%. This increase is quite horrible, and it seems that the new golden age is coming, and even the overall volume is approaching the US market.
Data released by the Swiss Watch Industry Federation
The US market, as the second largest region for Swiss watch exports, performed mediocrely. Except for March, it was down from the same period last year. The European market is currently performing well. The British market has been growing since the beginning of this year. It has even maintained double-digit growth since March. Although the UK is in the context of Brexit, there have been many terrorist attacks. But still maintained a strong momentum of luxury consumption. In addition, from a negative growth in Italy to a sudden positive growth of 26.7% in May, the amount of Swiss watches exported to Italy soared from less than 90 million Swiss francs to 134 million Swiss francs, an increase exceeding the imagination.
Statistics of Swiss clocks and watches exported to the UK
Euro zone economy improves, boosts luxury consumption
Halfway through 2017, data shows that the euro area economy is improving. From the currently released employment rate, production data, GDP and other indexes reflecting socio-economic levels, we can see that the euro area economy is recovering. Because Europe has a very good luxury culture, shopping environment, tourism environment and economic stimulus, Europe Become the yearning for the backbone of many luxury consumption. European Central Bank President Draghi once said that “the recovery of the euro area is resilient, and the countries and regions that are recovering are becoming more and more extensive”, “with the support of the European Central Bank’s monetary policy, domestic demand recovery is the main pillar of economic recovery. Globally, The economic outlook is also improving, and downside risks are mitigated. ‘ Reuters said in May that growth in the euro zone was expected to be stable but moderate, which made European economies more attractive for investment. At the same time, the euro has continued to rise against the US dollar and is expected to stay around 1.15 this year. The rise in the value of the euro has brought positive benefits to the prosperity of the European market. All this is based on the stability of European politics. Some people believe that the election of French President by Macron has strengthened the confidence of the euro area.
Since the end of last year, the euro against the dollar has bottomed out
Stable economic development in China drives rebound in demand for autogenic luxury goods
After four years of “bubble” squeeze, autogenous luxury consumption has finally become a new growth driver. Under a series of policies and regulations, everyone gradually left luxury consumption in the country. Although Europe, Japan, and Hong Kong still have some attractiveness, after the collective price control of luxury goods groups, the price gap between domestic and foreign countries has gradually increased. Shrinking, the price advantage brought by overseas luxury shopping is declining, but the policy risk (60% tax will be paid for entry checks, and the excess will be handled as smuggling), so under comprehensive consideration, the self-use type Luxury goods have some convenience and after-sale advantages when they are purchased in China.
Luxury brands are confident in the Chinese market, investing heavily in continuing to open flagship stores
The modest growth of the domestic economy has promoted consumption upgrades. At the just-concluded seminar on the economic situation, Premier Li Keqiang showed us some data. From 2013 to the present, the contribution rate of consumption to China’s economy has risen from 47% to 77.2%, indicating that economic structure optimization has achieved results; the added value of the service industry accounts for GDP The proportion is constantly expanding and surpassing ‘half walled rivers and mountains’, which has promoted employment and the birth of new businesses and models; new kinetic energy has supported China’s economy by 30%, thereby transforming and upgrading traditional industries. From these perspectives, China’s economy is currently developing in a stable and good way. In the past few years, the government’s vigorous administration of tax reduction and fee reduction has paved the way for market innovation and prosperity. The Belt and Road Initiative continues to play a strong role. Influence, external investment drives the healthy development of the internal economic environment. Although government data has always been based on good news, the accuracy of the data is also different, and the mainstream European financial institutions have raised the expectations of the Chinese economy, which also indicates that it is a benign economic environment.
Summary: According to data provided by Bain Consulting, under the constant exchange rate calculation, the global luxury goods industry achieved a 4% growth in the first quarter. Both LVMH and Kering also achieved strong growth during the quarter, achieving year-on-year revenue increases of 15% and 31.2%, respectively. The growth of luxury consumption also reflects the improvement of the economy, hoping to return to the glory of the past.