According to export statistics from the Federation of the Swiss Watch Industry (FH), in 2024, Swiss watch exports will decline year-on-year for the first time in four years. This slowdown in growth is largely due to the economic slowdown in China. Meanwhile, in the United States, the top export destination for Swiss watches, significant tax cuts and deregulation are expected following Donald Trump's inauguration as the 47th President of the United States, which is expected to further increase demand for luxury watches. What impact will the global economy have on the luxury watch market in 2025? Leading economic journalist Tomoyuki Isoyama offers his analysis.
Illustration by Mikio Ando
[Article published in the July 2025 issue of Kronos Japan]
Will demand for luxury watches in 2025 depend on the US?
Economic journalist and professor at Chiba University of Commerce. Born in Tokyo in 1962. Graduated from the School of Political Science and Economics at Waseda University. Served at the Nikkei Inc. as a securities reporter, deputy chief of the same department, Zurich bureau chief, Frankfurt bureau chief, and deputy editor-in-chief and editorial committee member for Nikkei Business. Left the company in 2011 to go independent. Covers a wide range of political, government, and business figures. His books include "The International Accounting Standards War: Final Chapter" and "The Secrets of Switzerland, the Brand Kingdom" (both published by Nikkei BP).
[Tomoyuki Isoyama Official Website]http://www.isoyamatomoyuki.com/
As a way to gauge global demand for luxury watches, this column often refers to the Swiss watch export statistics published monthly by the Federation of the Swiss Watch Industry (FH). By the time readers receive this magazine, the 2024 annual statistics will be available, but they are not yet available at the time of writing. However, it appears that exports in 2024 are lower than the previous year. This marks the first negative figure in four years, since 2020, when the spread of COVID-4 hit the economy hard.
This could be seen as an indication of a slowdown in the global economy, but the picture is completely different in 2024 from 2020, when 27 of the top 30 export destination countries and regions saw significant declines. Of the cumulative export figures released for January to November, 16 of the 30 countries showed positive growth, indicating that demand was strong in the majority of countries. However, the total value of exports through November was 23,939.6 million Swiss francs (approximately 4.112 trillion yen), a 2.7% decrease compared to the same period last year. The biggest factor behind this is China's economic slowdown.
The depressed Chinese market
The cumulative value of Swiss watch exports to mainland China through November was 1,922 million Swiss francs. While China has barely maintained second place, it is far behind the top-ranked exporter, the United States, at 4,026 million Swiss francs. It seems a lie that China surpassed the United States to become the top exporter in 2020, a year when the country quickly recovered from the COVID-19 pandemic.
Until 2019, Hong Kong held the top spot. This not only met the demand for watches from tourists visiting Hong Kong, but also allowed for an influx of watches from Hong Kong to mainland China. However, when China enacted the Hong Kong National Security Law in 2020, Hong Kong's status as a "free city" was shaken. Looking at Swiss watch exports, Hong Kong has relegated to third place since 2020. Even so, for 2023, the combined annual export value to mainland China and Hong Kong is expected to reach 5,118.8 million Swiss francs, surpassing the United States' 4,161.8 million Swiss francs. The "Greater China Market" was supporting the global demand for luxury watches.
However, in 2024, the cumulative total of exports to mainland China and Hong Kong through November was 3,656.9 million Swiss francs, less than that of the United States alone. Exports to the United States, where the economy remains strong, are performing well, increasing by 5.6%. Exports to Japan also showed strong growth, increasing by 9.7% through November, surpassing exports to Hong Kong. For the year as a whole, it appears that Hong Kong will fall below Japan and drop to fourth place. Also, the gap between second-place China and third-place Japan is narrow.
On January 17, 2025, the National Bureau of Statistics of China announced its 2024 gross domestic product (GDP). In real terms, adjusted for price fluctuations, it increased by 5.0% compared to the previous year. While this maintains the national target of 5%, nominal GDP, which does not take prices into account, grew by 4.2%, a significant slowdown from the previous year's 7.4%. The decline in consumption due to the real estate slump is becoming clear. Some believe that the statistics cannot be trusted and that the country has fallen into negative growth.
Looking at Swiss watch statistics, the decline in demand for luxury goods in China appears even more severe.
Will we have to rely on the US in 2025?
So what will the luxury watch market look like in 2025?
President Donald Trump began his second term on January 20th. At his inauguration, he boasted that "America's Golden Age is about to begin." Some believe that the US economy will overheat due to the significant tax cuts and deregulation. Some are concerned that an overheated economy will lead to rising prices and a resurgence of inflation. However, if wages rise as a result, US consumption will likely become even more enthusiastic.
The world's luxury watch market will undoubtedly depend on growth in the US market. A booming economy and a stronger US dollar could spur imports of luxury goods from abroad. While President Trump's proposed tariff hikes are certainly a cause for concern, the main targets are China, Mexico, and Canada, and it's unlikely that exports from Europe will be suddenly slowed.
On the other hand, the Trump administration may force a further slowdown in the Chinese economy. If the US and China start raising tariffs again, it will deal a major blow to the Chinese economy. This will further reduce consumption of luxury watches in China. The watch market in 2025 is likely to become a year dependent on the US.
