The desire of China’s wealthy class for luxury products has been a major factor behind the bullish performance of Swiss luxury watches during the past years.

But the latest data from the Federation of Swiss Watch Industry shows that in September watch sales plummeted 27 per cent, and in Hong Kong sales were down 19 per cent.

The total values of Swiss watch exports was 2.7 per cent lower than in the same month a year earlier with growth elsewhere compensating for China’s decline, the largest of any international market.

Analysts remain optimistic the downturn is a glitch, and not representing a turning point in the market.

Consulting firm Bain & Co predicts sales of luxury watches will grow 14 per cent worldwide and that luxury product sales in China will still rise by around 18 per cent by the end of the year.
 
September’s export data represents a turn for the worse and an indicator of how China’s luxury market has weakened in recent months. The drop mostly reflects China’s economic deceleration, and Chinese shoppers tightening their purse strings.

Chinese payment processing company UnionPay recorded foreign transactions were up 33 per cent from a year earlier, which is a sign that Chinese are making more and more luxury purchases abroad. This trend is growing as the value of the Chinese yuan increases, along with loosening travel restrictions and lower prices on luxury items outside China.

GB