Unrivalled manufacturing know-how coupled with sound business acumen enabled Swiss watchmakers to exploit the potential of foreign markets to the full. Exports have always been the backbone of the Swiss watch industry – in 1790, Geneva alone exported 60,000 watches. Around 95% of watches produced in Switzerland today are destined for the export market, making the watch industry the country’s third major exporter after the chemical and engineering industries in terms of value.
First export markets
Starting in the 17th century, and growing in importance in the 18th and 19th centuries, Asia was a major market for Swiss clocks and watches. The Genevans started off in Constantinople (where Jean-Jacques Rousseau's father, Isaac, became the official timer in charge of the clocks in the Topkapi Palace), and later expanded to China, where their wares became popular among the Qing dynasty aristocracy in the mid-18th century. Watches were adapted to meet the needs and tastes of their customers. For example, watches with automata were made specifically for the Turkish and Chinese markets. In the 19th century watchmakers in Geneva produced special “Rajah watches”, creating enamel portraits from photographs supplied by their Indian clients.
For centuries Switzerland was the world’s leading watch and clock producer. In 1870, it was responsible for three quarters of global production by volume and two thirds by value. One hundred years later, it was an entirely different story - the Swiss watch industry was in crisis. It had failed to anticipate and adapt to a market which was radically changing as a result of the major advances being made in the world of electronics. The future was looking bleak until the arrival of the Swatch Group on the scene. By the mid-1990s, the phenomenal success of the group, founded by Nicolas Hayek, led to the recovery of the crippled industry. By the end of the 1990s, Switzerland was again one of the world’s major watch exporters (around half of global export revenue is generated by the Swiss watchmaking industry). However, in terms of export volume, the situation was dramatically different from a century ago. Today, Switzerland’s exports by volume account for less than 10% of total exports worldwide (it annually produces around 33 million watches with a total value of CHF 500 million). This is not all that surprising, since the industry made the conscious decision in the 1990s to concentrate on the production of high-end, luxury timepieces, which generally sell for much higher prices. China may be the world leader in terms of volume (80% of global output), but it has a long way to go before it can supplant Switzerland as the top exporter by value.
Who are the leading importers of Swiss watches today?
The 21st century got off to a very promising start for the Swiss watch industry thanks, once again, to a buoyant export market (approx. 95% of total output). Its largest market is Hong Kong, followed by the US, Japan, France and Italy. In 2008, the total value of Swiss watch exports stood at CHF 17 billion, compared to CHF 10.2 billion in 2000 and CHF 4.3 billion in 1986. The parlous state of the global economy probably means that the Swiss watch industry will have to expect somewhat slower growth in the coming years.