A New Examination of the Swiss Watch IndustryBy Keith W. Strandberg
When we think of the Swiss watch industry, we most probably think of an industry with hundreds of small watch companies, laboring painstakingly over their creations in the snow-capped Jura Mountains.
The reality, however, according to a new report from Morgan Stanley, in collaboration with LuxeConsult, paints a decidedly different picture.
In truth, the industry is dominated by six brands, each with a 2017 turnover of more than one billion Swiss Francs. These six brands are, in order, Rolex, Omega, Cartier, Longines, Patek Philippe and Tissot. Audemars Piguet, according to its own reporting, reached that threshold over the 12 months ending in March 2018.
Add to these individual brands the fact that the four biggest watch groups – Swatch, Richemont, Rolex and LVMH – account for more than 75% of the retail market for Swiss watches, and you can see the domination of a handful of brands and large groups.
“The biggest takeaways of the report are that the Swiss Watch Industry makes about 50% of value in the worldwide watch sales,” says Oliver Müller, founder of LuxeConsult. “Of this 50%, 89% is controlled by Rolex, Swatch Group, Patek Philippe, Richemont, LVMH, AP and several other independents. 40 brands are making up 89% of the market value of Swiss Made watches, so the other 300 brands share the remaining 11%. Looking forward, I think that the strong brands will only grow stronger. The very few independent brands who have found a niche, like Richard Mille, Chopard and Audemars Piguet, all are targets of the big luxury groups and I am convinced they will be purchased eventually.”
This isn’t necessarily a good thing or a bad thing.
It’s just the reality.