To gain a deeper understanding of watch brands, it is essential to understand the power structure centered around conglomerates. Let's reexamine the history and technological evolution of the watch industry, centering on the Swatch Group, the largest watch group in the industry. This will surely open up new horizons that have never been seen before.
About the Swatch Group
The Swatch Group is the largest conglomerate in the watch industry, overseeing over 160 business organizations, including 18 watch brands (14 in Japan), and local subsidiaries in over 30 countries.
With brands such as Breguet, Blancpain, and the leading ebauche manufacturer ETA, the company has established a leading business scale and unshakable position in the watch industry.
Let's take a look at how the Swatch Group came to be a major conglomerate, a history that is synonymous with the Swiss watch industry.
History of the Swatch Group
Cooperation between small and medium-sized enterprises has been active in the Swiss watch industry for a long time, and in 1926, the corporate group "Ébauches SA" was established, centered around ETA.
The Great Depression of 1929 had a serious impact on the Swiss watch industry, but the industry managed to survive by establishing the SSIH in 1930, a group made up of the Swiss Banking Association and Omega, and the ASUAG in 1931, a group made up of the Swiss Banking Federation and Longines.
The release of quartz watches by Seiko on December 25, 1969 caused the so-called "Quartz Shock" that shook the watch industry, and in 1983, SSIH and ASUAG merged in order to survive. In the same year, ETA, part of the other group, Ebauches SA, released the "Swatch."
In 1986, SSIH, ASUAG, ETA (which had merged with Ebauches SA), and Swatch, which had become independent in 1985, merged to form the SMH Group, which was renamed the Swatch Group in 1998.
Characteristics and ranking within the group
Other groups with large shares in the watch industry include the Richemont Group and the LVMH Group, but these groups originated from jewelry and fashion houses and entered the watch industry through brand strategies and acquisitions.
In contrast, the Swatch Group is a conglomerate that is rooted in the traditions of the Swiss watch industry and focuses more on watch manufacturing and sales. Watch and jewelry brands are classified into the following four ranges based on price range and purchasing demographic.
The "Prestige & Luxury Range" includes six brands, including Omega, synonymous with Swiss luxury watches, Breguet, the pinnacle of Swiss watchmaking, Blancpain, a pioneer of mechanical watches, as well as Harry Winston, Jaquet Droz, and Glashütte Original.
Representative brands in the "high range" are Longines and Rado, while the "mid-range" includes Tissot, Mido, and Hamilton, and the "basic range" includes Swatch, all of which are distinctive brands.
Other major watchmaking groups
The forces that shape the watch industry can be broadly divided into three types: multiple "conglomerates," "independent companies" that do not belong to any of these, and the "Academies of Independent Watchmakers" (AHCI), which are watchmakers that manufacture watches without belonging to any company.
Here are some of the most powerful of these.
Richemont Group
Founded in 1988, Richemont is a conglomerate that holds the second largest market share in the watch industry after the Swatch Group.
It also owns manufacturers such as Cartier and Piaget, which have strengths in jewelry, as well as Vacheron Constantin, A. Lange & Söhne, and Jaeger-LeCoultre.
In contrast to the Swatch Group's ETA, the Richemont Group is known for its Val Fleurier ébauche, commonly known as the "Richemont caliber," which is used in some of the group's Panerai, IWC, and Montblanc watches.
LVMH Group
Founded in 1987, LVMH (Moët Hennessy Louis Vuitton) is the world's largest conglomerate in the fashion industry, with 75 brands across clothing, cosmetics, wine, and more.
Its entry into the watch industry began in 1999 with the acquisition of Chaumet, Tag Heuer and Zenith, and it has since grown rapidly to become the third largest group after the Swatch Group and Richemont.
It strengthened its watch and jewelry brands by acquiring Hublot in 2008 and Bvlgari in 11. Unlike the Swatch Group and Richemont Group, which have strengths in mechanical watches, it is differentiating itself by focusing on smartwatches.
independent company
Among independent companies, the biggest players in terms of sales are Rolex, Fossil, Patek Philippe, and Japanese brands Citizen Watch and Seiko Watch.
Although Rolex operates as two brands, together with Tudor, it has a market share on par with the Swatch Group and Richemont Group.
Fossil is boosting sales by tailoring its smartwatches to fashion houses like Diesel and Marc Jacobs.
Of the world's three biggest watch brands, Patek Philippe and Audemars Piguet are independent companies, although Audemars Piguet owns the movement manufacturer Audemars Piguet Renaud & Papi.
