Swiss Watch Industry Navigates Global Challenges Amidst Shifting Demand

Navigating the Evolving Landscape: Resilience and Redirection in the Swiss Watch Sector

Executive Perspectives on Trade and Geopolitical Influences

A recent survey of Swiss watch industry executives, conducted by a prominent global consulting firm, indicates that over 80 percent of those polled harbor worries regarding the detrimental effects of trade regulations on their operations. Furthermore, more than 90 percent identified ongoing geopolitical instabilities as a significant source of disruption. These sentiments underscore a period of considerable uncertainty for the sector.

Shifting Global Demand and Market Corrections

Despite achieving a peak in exports post-pandemic, reaching approximately $33 billion in 2023, the Swiss watch industry began to observe signs of reduced demand by early 2024. Data points to a nearly 3 percent decrease in total export revenues and a 10 percent drop in export volumes year-over-year in 2024. This market correction is reflected in the cautious outlook of many executives, with 43 percent holding a pessimistic view of key export markets, contrasting with only 23 percent who maintain an optimistic stance. Concerns about the strong Swiss Franc, coupled with weakening global demand and diminished consumer buying power due to inflation, are top priorities for industry leaders.

Varying Market Fortunes Across Price Segments

The market sentiment differs considerably across various price categories within the Swiss watch industry. Executives exhibit a positive outlook for high-end timepieces, those retailing for over 50,000 Swiss Francs, with 64 percent expressing confidence. Conversely, the perception for entry-level and mid-range watches is largely negative, with approximately 60 percent of executives forecasting a challenging period for these segments.

Impact of Tariffs and Regional Market Divergence

The imposition of a 39 percent import tariff by the United States on Swiss watches in August 2025, an increase from an initial 31 percent, has significant implications for the industry, given the U.S. accounted for 16.8 percent of all Swiss watch exports in 2024. To mitigate the effects, brands and retailers proactively increased inventory before the tariffs took effect, and several prominent watchmakers adjusted retail prices. While exports to the U.S. saw a surge in April and July 2025 due to these anticipatory measures, markets in China and Hong Kong have experienced declines. In contrast, India continues to be a growth area, with a nearly 7 percent rise in exports during the first eight months of 2025, and Mexico has emerged as a robust market in Latin America, receiving over $400 million in Swiss watch exports in 2024.

Strategic Focus Areas and Emerging Technologies

Brand executives are prioritizing new product introductions, with 61 percent planning to concentrate on this area in the coming year. A notable shift is the increasing adoption of artificial intelligence, with nearly one-third of executives intending to utilize AI for creative product development, a significant jump from 20 percent in 2023. Cost reduction has also gained prominence as a key priority, cited by 46 percent of executives, compared to only 10 percent the previous year, highlighting a strategic emphasis on operational efficiency.

The Enduring Role of Physical Retail

Physical retail continues to be the dominant sales channel for the Swiss watch industry. Two-thirds of brands and retailers report that online platforms account for approximately 10 percent of their sales, while 16 percent operate exclusively through brick-and-mortar stores. A strong majority of executives, 74 percent, anticipate that physical retail will remain the primary channel over the next five years. This trend underscores the unique value of the in-store shopping experience, which offers personalized advice, an engaging atmosphere, and the opportunity for physical interaction with products—elements that digital channels struggle to replicate effectively.

Evolving Consumer Preferences and New Demographics

The study reveals important shifts in consumer behavior, indicating that purchase intent for traditional watches is equally strong across genders, signifying a vital growth opportunity within the female market. Younger demographics, particularly millennials and Generation Z, show a strong inclination towards purchasing pre-owned watches, with 40 percent likely to do so in the coming year. Price remains the primary motivator for these acquisitions, cited by 53 percent of consumers. Social media and influencers play a crucial role in purchasing decisions, especially for younger buyers and in markets like Mexico, where 24 percent of consumers identify social media as their primary influence, and are twice as likely to purchase watches directly through these platform