Editor’s Note
This analysis highlights a pivotal moment for the luxury sector, where overall growth is moderating. The resilience of ‘hard luxury’ categories like watches, even amidst a slight downturn, underscores a shift in consumer priorities and market dynamics that warrants close attention.
The luxury industry, as a significant component of the global economy, has always been a focal point for consumers and investors. Relevant data indicates a ‘cooling down’ in luxury consumption, with fluctuations also observed in the ‘hard luxury’ market. Taking watches as an example, in July 2023, Switzerland’s total watch exports fell by 0.9% year-on-year, with watch category exports dropping by 1%. This marked the first monthly decline in total Swiss watch exports in two years. However, by November, export value rose by 3.1% year-on-year to 2.5 billion Swiss francs, setting a new record for the highest monthly export value ever. Although the growth is not dramatic, the declining trend from the summer of 2023 has been reversed.
Due to the inherent characteristics of hard luxury—such as investment value preservation, collectibility, scarcity, and status symbolism—coupled with consumers adopting a more cautious and rational consumption mindset, an overview of last year’s watch market reveals that despite a narrowing demand for watches, the underlying hard luxury market remains an indispensable ‘engine’ driving incremental growth and acceleration in the luxury market.
When discussing how to better attract the younger generation of hard luxury consumers in the future, the word ‘balance’ becomes particularly important. Many watch brands have histories spanning nearly a century. How to balance the relationship between heritage and innovation, attracting new customer groups without losing the traditional clientele, is a focus for brands and a pain point for the entire industry.
As ‘self-pleasure consumption’ becomes more deeply integrated into consumer mindsets and brand digital transformation advances, the importance of shopping experience and customer service in luxury sales continues to increase. The combination and coordination of online and offline activities are significant for brands’ localization strategies and strengthening emotional connections with local consumers.
In September last year, Blancpain and Swatch jointly launched five Bioceramic Fifty Fathoms watches. In November, Piaget opened the ‘Metaphoria’ high-end jewelry exhibition in Beijing. Vacheron Constantin’s ‘The Anatomy of Beauty’ national tour and Jaeger-LeCoultre’s Reverso Water Curtain Music Show are all examples of brands’ experimental efforts to enhance offline consumer experience and transition towards a younger demographic.
Many watch brands are also actively exploring and upgrading new consumption business models that integrate the digital and physical realms, creating diverse consumption scenarios and gaining high market recognition.
With factors such as a long history, exquisite craftsmanship, and refined aesthetics, Swiss watches have maintained a high industry status, with many pieces enjoying global acclaim. Although China is a major watch-producing country, it is not yet a watch powerhouse. China’s watch industry started relatively late, lacking certain accumulation, and brand influence still needs improvement. However, in recent years, the design and manufacturing capabilities of domestic watches have significantly improved.
As a precision manufacturing industry, watchmaking places high demands on technology. Currently, China’s watch industry has formed an industrial production system centered on high-precision manufacturing technology, with a gradually improving industrial chain, making it an important part of the global watch industry. Behind this is the active transformation of traditional Chinese watch enterprises and the ‘injection’ of new forces, jointly propelling Chinese watchmaking towards high-end refinement.
