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The global luxury watch industry is facing uncertainty as geopolitical tensions and economic pressures impact demand, coinciding with the Watches and Wonders event in Geneva. Rising raw material costs, supply chain disruptions and tariffs are affecting production and trade. Exports are expected to decline, while reduced tourist inflows have impacted retail sales in key markets like Dubai. Despite stable domestic demand in some regions, inflation concerns and currency strength continue to weigh on growth. Leading brands still dominate the market, with premium watches gaining share. As the sector navigates these challenges, the Geneva fair remains a key platform for industry launches and partnerships.
The global luxury watch industry is facing renewed uncertainty as geopolitical tensions and economic pressures weigh on demand, even as the annual Watches and Wonders fair opens in Geneva this week. Advertisement
The event, which begins Tuesday, is one of the industry's most prominent gatherings, bringing together around 65 brands and expected to attract nearly 60,000 visitors. It comes at a time when watchmakers are seeking recovery after two consecutive years of market slowdown.
However, the ongoing conflict involving the United States, Israel and Iran has impacted global trade and sentiment. Rising energy prices, disrupted logistics and reduced air travel have affected several sectors, including high-end watches.
The increase in prices of key raw materials such as gold and silver over the past year has also added cost pressures. In addition, tariffs imposed earlier by the United States on Swiss goods continue to influence trade dynamics, despite some easing.
According to Philippe Pegoraro, chief economist at the Federation of the Swiss Watch Industry, exports are expected to decline sharply in March due to logistical disruptions and weaker demand. While domestic purchases in markets like the UAE remain stable, a drop in tourist inflows has affected retail sales, particularly in travel hubs such as Dubai.
Industry analysts note that uncertainty around inflation and consumer confidence is further impacting demand. The sector, which generates tens of billions of dollars annually, is now navigating a challenging environment shaped by both global and regional factors.
Data from Morgan Stanley's latest Swiss Watch report shows that exports declined 1.7 per cent in value terms last year, marking a second consecutive year of contraction. Currency strength, especially of the Swiss franc, also played a role in moderating demand.
Market concentration remains high, with leading brands such as Rolex, Cartier, Patek Philippe and Omega accounting for more than half of total retail share. At the same time, the premium segment continues to expand. Watches priced above 50,000 Swiss francs accounted for 37 per cent of export value, up from 33.5 per cent a year earlier.
Switzerland continues to dominate the global luxury watch segment, holding an estimated 96 per cent market share for watches priced above 2,000 francs. However, competition is emerging from players such as Japan's Grand Seiko and India's Titan, which are gradually moving into higher-value segments.
Despite the current challenges, the Geneva event remains a key platform for product launches, partnerships and business discussions, even as the industry navigates a period of economic and geopolitical uncertainty.
Source: PTI
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