India and Mexico could become new drivers of growth for the Swiss watch industry, which has been impacted by U.S. tariffs and weakening demand in China, according to a report from Deloitte, announced on Wednesday.
Swiss watch industry sees growth potential in India and Mexico, Deloitte says – Divulgação
The emblematic Swiss watch sector “is navigating one of the most complex periods in recent memory,” the professional services firm noted in the 11th Deloitte Swiss Watch Industry Study.
Watchmaking, Switzerland’s third-largest export sector, was rocked when the United States — its largest market — imposed 39% tariffs on Swiss products in August.
Meanwhile, exports to mainland China — another major market for Swiss watchmakers — continue to decline, with demand dampened by youth unemployment and turbulence in the real estate market.
According to data from the Federation of the Swiss Watch Industry (FH), exports to the United States in 2023 reached 4.4 billion Swiss francs ($5.5 billion), representing a 5% increase from 2022.
Exports to mainland China totaled 2 billion francs, a 26% decrease.
Karine Szegedi, leader of Deloitte Switzerland’s consumer, luxury, and fashion practice, said the industry should seize opportunities in emerging markets where growth is accelerating.
“Tapping into new growth regions is crucial as a way of cushioning declines in established markets,” she said. “Countries like India and Mexico are a source of young, dynamic customers. These customers are open to innovations, allowing the Swiss watch industry to expand its global presence in the long term.”
New watch markets
Deloitte identified India as a high-potential market for Swiss watchmakers in its 2023 study. Since then, Switzerland has signed a free trade agreement (FTA) with India, which came into force on Oct. 1, improving access to India’s growing middle class for Swiss watch brands.
This year’s study cited India’s “strong domestic demand, rising affluence, and active investment in retail infrastructure.”
The report also highlighted Mexico, with which Switzerland signed an FTA in 2021. Since then, Swiss watch exports to Mexico have increased fivefold, establishing the country as the leading market in Latin America.
Deloitte attributed the enthusiasm for watches in Mexico to the influence of social media.
India, however, remains the industry’s fastest-growing major market.
FH figures showed Swiss watch exports to India rose 25% last year to 274 million francs, while exports to Mexico grew 16% to 337 million francs.
Despite these gains, Deloitte warned that rising sales in these countries will not fully offset the impact of U.S. tariffs and weakening demand in China.
Mexico ranked as the Swiss watch industry’s 15th-largest market last year, while India stood at 21st.
