All eyes are on the Chinese market following the Hong Kong protests. The growth of this market is hugely influential in the luxury good markets and to the level of exports in the Swiss Watch Industry. However, the unrest now being experienced is having a definite impact.
Limited Sales Amid Unrest
With some of the busiest days in the retail calendar for watch manufacturers being limited due to the protests, Hong Kong is currently responsible for some negativity within the industry . After all, Hong Kong is not simply an entry to the watch market in Asia, but one of the most important markets for the worldwide watch industry as a whole.
Some of the most well-known Swiss watch manufacturers, such as Swatch (the world’s largest), generate between 18 and 20 per cent of their sales in Hong Kong. The owner of a range of prominent brands, including Cartier and Tag Heuer, LVMH relies on the city for 15 per cent of its revenue. The recent protests and subsequent actions look set to see the industry taking a significant hit.
Tough Choices for Major Players
The foreign markets, such as China, have been booming and emerging over recent years. Hong Kong has benefitted from huge amounts of attention and investment. This has enabled the watch industry to take big strides in these particular regions, even when there have been limitations elsewhere in the markets due to the economic downturn.
Traditionally, the relationship between the Swiss watch industry and Hong Kong has been both friendly and prosperous. Hong Kong itself has flourished as a luxury watch shopper's paradise. But now, with protestors even physically blocking the doors of luxury shops in the area, the industry is left having to make a tough decision regarding its next moves.
While no one company, especially a major player, wants to be seen as outspoken or supporting either the protestors or the Chinese government, the industry has much to lose if Hong Kong relinquishes its place as a major hub for luxury shopping. Having said this, reacting to economic change with a focal shift is not unheard of for the Swiss watch industry. What's more, the gradual economic recovery elsewhere does provide some room for manoeuvre. There is likely to be significant discussion about the future and how the watch industry will realign itself should the situation not improve in the near future.
Positives
The Swiss stock exchange has naturally been impacted by this activity, and the market is seemingly slowing. However, for the collector this is not necessarily bad news. As manufacturers temporarily reduce the numbers of new releases and innovations, there is the opportunity for renewed interest in classic pieces. There is never a better time to browse back catalogues in search of industry favourites. It's an exciting prospect for many.