James Lawson, director of Ledbury Research, recently investigated the growth success of the Swiss watch exports for 2012 (here is his article). Last year was the best year in the history of Swiss watch exports. The number reached 21.4 billion francs, which was a growth of +10.9% from the year before. However, the only area for concern is the fact that this 10.9% is down from the 19% growth seen from 2011 to 2012. The European country with the most growth in demand was Austria, with demand rising 39% every year. Other European countries with a strong growth in demand were Belgium, the Netherlands, and Germany.
Sales inside the borders of Asia, however, are decreasing. Lawson credits this to the fact that the number of Chinese travelers increased to 71% in 2012. These are the numbers that Lawson calculated: One-fifth of this 71% visited Europe and 72% of these visitors purchased luxury goods. 37% of the 72% purchased a luxury watch. But why would these tourists be so eager to purchase a watch in Europe? Most likely, it is because purchasing a luxury watch in Europe is cheaper than importing it to China. By purchasing the watch in Europe, the Chinese are able to avoid an 11% import duty, a 20% tax on high-end watches, and a 17.5% VAT through buying in Europe.
Lawson guesses that this positive trend for watch demand in the European market will continue to increase. He attributes this to the fact that the number of millionaires in Europe is increasing and assumes that this will only help the demand for luxury watches to continue to increase. Read Lawson’s full article here.