Swiss Watch Industry 2023: Record sales, dominant brands, and Independent Makers

The Swiss watch industry wrapped up 2023 with a flourish, setting a new record with sales reaching CHF 26.7 billion, out of which wristwatches accounted for CHF 25.5 billion (+7.7%) across 16.9 million units sold. At first glance, this seems highly positive. Yet, a deeper dive into the annual report by Morgan Stanley and LuxeConsult unveils more intricate stories. Let´s dive in.

Rolex, Patek Philippe, Audemars Piguet, and Richard Mille cement their lead

These four titans have further solidified their dominance, enhancing their market share by +203 basis points to an impressive 43.9%. This growth underscores a long-term trend, especially notable when compared to their combined market share of 36.9% back in pre-Covid 2019.

Historic milestone for Rolex with sales surpassing CHF 10 Billion

Rolex has set a historic precedent by being the first Swiss watch brand to breach the CHF 10 billion sales mark, thereby affirming its market dominance with a 30.3% retail market share, a milestone unmatched by any other luxury watch brand in the past.

Vacheron Constantin joins the "Billionaires' club"

Vacheron Constantin has ascended to the billionaires' club as the 8th brand to exceed CHF 1 billion in sales, marking an 18% increase. Despite achieving a 24 basis point uptick in market share, it remains behind Patek Philippe, which boasts a 5.6% share.

Diverse performances among Richemont's watchmakers

Within the Richemont group, specialty watchmakers such as Vacheron Constantin, A. Lange & Söhne, and Van Cleef & Arpels have seen market share increases. Conversely, IWC faced a 13% sales decline, suffering from pricing misalignment despite launching attractive products like the revived and highly appreciated Ingenieur watch.

Cartier watches make notable gains

Cartier's watch segment grew by 8% to CHF 3.1 billion, slightly lagging behind its jewelry sector but still outpacing the industry average and gaining market shares. Significantly, Cartier's retail market share has now surpassed Omega's.

Dominance of four major brands in sales

The Swiss watch sector is notably dominated by four brands—Rolex, Cartier, Omega, and Patek Philippe—which collectively account for over half of the total sales. Just thirteen brands represent 75% of the market, with the top twenty-five brands accounting for 90% of sales out of approximately 350 brands.

Swatch Group's performance and notable exceptions

Despite losing overall market share, Swatch Group achieved notable successes, particularly with the MoonSwatch's popularity, contributing significantly to Swatch's sales. Tissot also saw robust growth, benefiting from the PRX product family's success and the reopening of the Chinese market.

Premiumisation trend fuels industry growth

The trend towards premiumisation remains strong, with watches priced over CHF 25,000 driving the majority of growth and representing a significant portion of the total value of Swiss watch exports, despite constituting a small fraction of the total volume.

Impact of smartwatches on entry-level Price Points

The entry-level segment continues to face challenges from smartwatches, with approximately 80 million advanced smartwatches sold globally in 2023. Swatch and Tissot stand out as traditional watch brands defending this segment against smartwatches, fashion brands, and crowd-funded micro-brands.

2023's key winners and losers

Privately owned luxury brands such as Rolex, Patek Philippe, Audemars Piguet, and Richard Mille continue to gain market shares, contrasting with the performance of listed companies. Hermès and Vacheron Constantin (Richemont) notably outperformed, while Breitling's growth stalled.

The rise of the Independent

The report highlights the success of independent brands, which, despite their smaller economic footprint, have significantly impacted the industry through creative initiatives. Brands like FP Journe, H. Moser & Cie, and Greubel Forsey have made notable entries into the top 50, appealing to wealthy collectors with their unique offerings.

Conclusion: It has been a 2023 full of strategic shifts and growth

The Swiss watch industry's landscape in 2023 was marked by strategic shifts, premiumisation, and the notable dominance of a few key players. The report underscores the increasing profitability and market share of the leading brands, while some independents have emerged remarkably.