The Luxury Recalibration
Swiss watchmaking enters a slower phase after the post-pandemic surge.
After record exports in 2023, the Swiss watch industry is adjusting to weaker volumes, shifting demand, and a market increasingly defined by premiumisation rather than expansion.
Luxury is recalibrating. After a post-pandemic surge that lifted revenues across hard and soft luxury alike, the sector has entered a more demanding phase—one where price increases alone no longer suffice, and brands must rebuild value through craft, narrative, and client experience. Swiss watchmaking, sitting at the intersection of industrial precision and aspirational desire, exemplifies this shift. The industry is not collapsing. But it is unmistakably past its peak, and what comes next will be shaped by discipline rather than momentum.
The factual baseline is clear. Swiss watch exports reached a historic CHF 26.7 billion in 2023. Since then, the trajectory has bent downward: a 2.8 percent decline in 2024, a further 1.7 percent contraction in 2025, settling at CHF 25.6 billion. January 2026 extended the pattern, with exports falling 3.6 percent year-on-year. Volumes tell a sharper story—down consistently since 2023, even as aggregate value remains elevated. The industry is shipping fewer watches at higher prices. This is not contraction by accident; it is premiumisation by design.
The divergence between price segments has become structural. In 2024, watches with export prices below CHF 3,000 saw value fall 16 percent. Higher-priced categories, despite a 4 percent drop in volume, gained slightly in value. Executive sentiment mirrors the split: 64 percent expect positive performance for watches retailing above CHF 50,000, while roughly 60 percent see negative outlooks for entry-level and mid-range tiers. The Swiss watch industry is not trying to win back the affordable end. It is ceding that terrain—to smartwatches, to fashion accessories, to indifference—and consolidating around the segments where margins, brand equity, and collector loyalty justify the cost of participation.
The geography of demand is shifting accordingly. Asia remains the largest regional destination, absorbing 46 percent of exports, but it is also the most fragile. China and Hong Kong, once twin engines of growth, have contracted for two consecutive years—China down 26 percent in 2024 and another 12 percent in 2025; Hong Kong following a similar path. Structural headwinds—weak property markets, subdued consumer confidence—persist beneath any quarter-to-quarter fluctuations. The United States, still the single largest national market at 16.8 percent of exports, endured a turbulent 2025. The imposition of 39 percent duties in August triggered an immediate collapse—exports fell 56 percent in September. Although tariffs were reduced to 15 percent by November, the disruption left marks on inventory planning, pricing strategy, and retailer confidence. January 2026 exports to the U.S. declined 14 percent; the aftershocks have not fully dissipated. Europe, by contrast, offers stability. The region accounts for 31 percent of exports and showed only marginal decline in 2025. France posted a striking 36.8 percent increase in January 2026. Meanwhile, India has emerged as the most promising growth market—nearly 80 percent of executives forecast medium to strong expansion there. The map of demand is being redrawn: less dependent on Greater China, more diversified across Western and emerging economies.
Consumer behaviour reflects a parallel tension. Daily wear of traditional watches has declined sharply—from 46 percent of respondents in 2020 to 26 percent in 2025—with smartwatches dominating everyday use, particularly among younger consumers and women. Yet purchase intent for traditional watches remains robust: 54 percent express likelihood of buying one in the next twelve months. The traditional watch is becoming an object of occasion and desire rather than daily utility. Price sensitivity is pronounced. Globally, 58 percent of consumers would spend up to CHF 1,500 on a new watch; only 5 percent would exceed CHF 10,000. At the same time, the pre-owned market has stabilised into a permanent structural feature. Thirty-one percent of consumers intend to purchase secondhand in the present year, motivated primarily by price but also by access to discontinued references. Nearly half of industry executives now view the secondary market positively—a marked shift from years of resistance.
This recalibration extends to how watches are sold. Despite years of digital acceleration rhetoric, two-thirds of brands report that online channels account for roughly 10 percent of sales. Seventy-four percent of executives expect physical retail to remain dominant over the next five years. The luxury watch purchase—high-value, emotionally weighted, often once-in-a-decade—resists e-commerce logic. Mono-brand boutiques, flagship experiences, and trusted multi-brand retailers remain central to how value is captured and communicated.
What emerges is not an industry in crisis but one undergoing structural tightening. The 2020–2023 cycle ran on pent-up demand and pricing power; what follows demands sharper choices. Premiumisation is deliberate. Geographic diversification is necessary. Consumer desire persists, but at specific price points and through specific channels. Swiss watchmaking has navigated downturns before—through discipline, selective innovation, and the institutional patience that mechanical timekeeping seems to instill. This cycle will be no different, even if the path is narrower than the peak suggested.
About the Author
Sergio Galanti is an independent brand strategist and writer in the luxury watch industry. He is the editor of WatchDossier, a publication devoted to the cultural and philosophical undercurrents of modern horology.
No compensation or brand affiliation influenced this essay. Opinions are the author’s own.
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