Fernando Correia de Oliveira*
In 2008, Switzerland beat all records for the exports of watches – 17 thousand million Swiss Francs – for a total of 26.1 million units.
It was the height of the “watch bubble”, prices went up, delivery dates could not be met, there was a lack of capacity and skilled labour and every day new makes appeared, taking advantage of the wave.
With the world crisis, for the first time the luxury market suffered as much as or more than other industries, and the watchmaking sector was no exception (to have a watch, today, is a luxury, because the last thing you want one of these things for is to tell the time when time is always accessible to everybody and everywhere, in public, and it is free!).
The year 2009 saw a drastic fall in the exports of Swiss watches (3.8 thousand million Swiss Francs less, a fall of 22.3 per cent; 21.7 million units, in other words, 4.4 million less).
Labour, which reached a peak of 90 thousand in 1970, would come to fall to 30 thousand in 1984, when the quartz crisis (Asian competition) almost killed off Swiss watchmaking. But allure for the instrument underwent a rebirth and, since then, this sector was where the demand for skilled labour was the greatest, reaching 40 thousand in 2004 and almost 50 thousand at the height of the “bubble”.
Really shaky in 2009, but even so with redundancies only in the hundreds, the Swiss watchmaling industry placed a lot of its advertising strategy in the few markets where economic growth was still a reality – especially in the case of China.
There are two great international showpieces in the watchmaking sector and, obviously, both take place in Switzerland. Baselworld, almost 80 years of age, is held in Basel, and it is the biggest world trade fair of its kind, including, apart from watchmaking, fancy jewellery and the machine tools for these industries.
20 years ago, and giving birth to a concept of new Fine Watchmaking, there came a dissidence to Basel, the Geneva Show, where around two dozen top makes were on display for a selected professional public and the media, with access only being possible by invitation.
Both Baselworld 2009 (in March) and the Geneva Show of last year (for the first time in January) took place in a depressing atmosphere, with fewer visitors and, moreover, with less orders.
It was, therefore, with great expectancy that observers awaited the January Show, the first big event that could test the temperature of the waters. But this show, despite having more attendees than the previous year, was not decisive in seeing if the crisis had already passed. It would have to wait for Baselworld 2010, to see the true state of things.
With the “watchmaking bubble”, a lot of new and independent makes appeared. With the crisis, some of these were also the first to disappear. Some people criticised the proliferation of so many makes of watches, forgetting that in 1970 there were almost 1,600 and that today there will probably be only around 600…
So, it will not be due to the amount of makes that the crisis makes itself felt… And, apparently, the recovery is happening.
The latest information from the Swiss Watchmaking Federation, with regard to February, says that exports had risen by 14.2 per cent by comparison with the same month in 2009, while the accumulation of the first two months of the year saw an increase of 8.6 per cent.
It would seem, therefore, that the crisis, which appeared with such violence at the end of 2008, is starting to pass.
With regard to Portugal, the numbers continue to be somewhat surprising, by comparison with the situation the country is experiencing: in January and February of 2010, the country imported Swiss watches at a level that was 41.7 per cent higher than the same period of the previous year, now standing in 21st place in the table of the most important markets of the Swiss watch.
The year of 2009 ended with the Portuguese market having once more an atypical behaviour, with a 2.4 % increase in the import value, the only country in Western Europe with this behaviour (its neighbour Spain saw reductions by almost a half in its purchases of Swiss watches).
This atypical behaviour of the Portuguese market is, in part, explained by Angolan and Brazilian consumers ordering from Lisbon, and buying very expensive pieces. But also revealed is the perennial national taste, with a tradition that is centuries old, for time pieces. Portugal, without having been a “watchmaking bubble” like Spain or Russia, has regularly maintained its interest in watches.
The sector, in terms of value, on a world scale, is dominated by Switzerland. So as to get some idea, it is calculated that it produces 1.2 million wrist watches per year. China and Hong Kong smash the competitors in terms of quantity, with their 500 million yearly units each, with the average price of each unit, respectively, being 2 and 12 dollars, while Switzerland with an export of «only» 26 million pieces has an average price of 563 dollars.
It is hardly surprising, therefore, that the sector goes every year to Switzerland to take part there in the two events that we have already mentioned. At the ‘Salon Internacional de la Haute Horlogerie’ (SIHH) (International Fair of Fine Watchmaking), in Geneva, there gathered together this year the usual manufacturers such as the independent Audemars Piguet and Girard-Perregaux, as well as all the makes in the portfolio of the Richemont Group (Cartier, Vacheron Constantin, Piaget, Van Cleef & Arpels, Jaeger-LeCoultre, IWC, Panerai…). There were two heavy players, the independent Richard Mille and Greubel Forsey.
The SIHH of 2010 showed tendencies that would come to be confirmed later in Baselworld – all the makes included simple models in their catalogues, lowering their respective deposit prices. But they still did not stop coming out with novelties of well over 50 thousand Euros, using precious metals or new materials (ceramic, carbon, silicon) and showing innovative complexities and concepts.
After the depressing atmosphere of 2009, the SIHH showed this year an increase of 10 per cent in the number of visitors (12,500 in total with 1,200 of these being representatives of the media).
With the atmosphere of a private club, they went two months later to the enormousness of the Basel fair. Baselworld 2010 saw a return in force of the North American customers, who were practically absent in 2009, and of the Chinese “invasion”. However, it is the Chinese market, avid for luxury that has kept many of the makes afloat, since both the United States and Europe are not giving any signs of a sure return.
Following the current of Geneva, in Basel there was a mixture of tradition and innovation – simple models, with three hands, in steel, with relatively low prices, like attraction products for inclusion in the range of makes; but also “crazy things”, especially in the concept watches, true sculptures where telling the time continues to be re-invented, at stratospheric prices.
Baselworld, with its 1,915 exhibitors, received 100,700 visitors, 7 per cent more than in 2009, and attracted 2,900 journalists. The big orders were placed (or not) in Basel. And the survival of dozens of makes was at stake there. Many people predicted that some of those were to have their last chance of survival there.
Baselworld will appear at the 2013 fair totally remodelled by a project ordered from the famous architecture office of Herzog & de Meuron. Decided upon at the height of the “watchmaking bubble”, is the considerable investment still justified at a time when there are more and more small independent or regional fairs? Or when the advertising strategy becomes more and more found on the Internet? And is the Geneva Show, which costs the Richemont Group a fortune, going to exist, separate from Basel after the latter has had its facelift with more space and infrastructures? Questions which are being asked but nobody is able to give answers to.
With regard to Portugal and its mysterious behaviour, will 2010 confirm its perennial interest in Swiss watchmaking? The financial agents who we speak to in Geneva and Basel seem to be apprehensive, given the situation that the Growth Stability Programme will create, clearly taking away the buying power of the middle classes.
But the Portuguese liking for watches has always been surprising, so that only when the year is at an end will it be known whether the national thirst for watches will be slowed up or not.
*Journalist and Researcher
(http://sites.google.com/site/fernandocorreiadeoliveira/)
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