n the twentieth century, Switzerland’s watch industry was exporting its products on all five continents. Brands had their markets, business was cruising.

Until thirty years ago. The 1990s were a pivotal moment; a decade when “competition” became more than just a word and rivals locked horns. From the first half of the decade, one market became the focus of interest. Meanwhile, heightened competitivity between brands encouraged internationalisation and globalisation.

Europa Star’s first China issues from the mid-1990s, when the Chinese market was poised to take off for Swiss watch brands.

Specifically, mainland China was showing signs of opening up its economy: small steps that nonetheless boded well for the watch industry. Up to that point, only a handful of brands, for example Titoni, Rado and Enicar, had found a way into the Chinese market, each having its own reasons for doing so.

Prior to this, in the eighteenth and nineteenth centuries, if the Chinese had come into contact with Swiss watchmaking, it would have been through pocket watches, the vast majority of which were destined for the Imperial Court and its dignitaries. History remembers the Bovet brothers, from Val-de-Travers, as specialists in the genre.

Pascal Brandt’s 1994 interview with Nicolas Hayek on prospects for his group in China.

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Closer to the present day, domestic brands such as Shanghai Watch Company and Seagull had been the height of luxury for Chinese consumers until the 1990s, when the population got its first taste of western products in an economy that was slowly but effectively opening to the outside world. These included Swiss watches, the stuff of dreams for millions of Chinese. By way of example, by the mid-1990s three million watches were being sold in Shanghai every month.

China had it all: economic growth, rapid development and a vast population, with millions of prospective customers. This was a promised land, and major brands alongside nascent groups had the country in their sights. Meanwhile, market structure was beginning to change.

Swiss watch exports to China since 2000.

In 1995 I travelled to Shanghai, a buzzing metropolis whose skyline bristled with 22,000 cranes operating round-the-clock. The reason for my visit was an event hosted by Swiss watch brands. It was a low-key affair, in a basement (that later became a minimart) across from the Shangri-La hotel. The event hadn’t even been advertised. It was, in every sense, an underground happening in what was still a closed economy.

Europa Star was among the exhibitors, handing out posters and magazines. We were swamped by crowds eager to leave with printed proof of a world, that of Swiss watches, which the vast majority had never seen in the metal and which was beyond their reach. Only security guards saved us from being trampled underfoot.

A special report on Breguet in a 1997 issue of Europa Star China.

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Across the road, Breguet had set up shop in one of the Shangri-La’s suites. This clandestine presence was orchestrated by Albert Hausamann, who managed the brand’s business in the region. He was seconded by a knowledgeable and passionate enthusiast, for one-to-one presentations to a handpicked audience. This talented heart surgeon went on to become one of the country’s top specialist watch journalists (the two of us have been friends ever since).

Everyone had their own strategy for breaking into the Chinese market. In an interview, Patrick Heiniger, boss of Rolex, told me that for his group, “Tudor was the infantry for Rolex in China.” As for Nicolas Hayek, “we want to serve everyone with our products.” The boss of SMH, now Swatch Group, was one of the first to clearly foresee the potential of this still closed market.

A report on the 1996 Swiss Watch Industry Trade Fair in Shanghai, available to read in Europa Star’s digital archives.

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From that point on, China became an obsession for watchmakers. The opportunity to expand into a new market for some, increased sales for listed companies – China dominated conversations and massively focused the attention of brands and groups, fuelled by a growing population with ever greater spending power and a taste for luxury goods (brand names are a key motivator for Chinese consumers) and by a mass of Chinese tourists sweeping Europe and its luxury boutiques. Brands put their eggs (in some cases the entire dozen) in the Chinese basket, convinced of the endless growth opportunities to be had.

Before any of the second-tier cities, brand boutiques sprang up across Shanghai. From Nanjing Road to Plaza 66, from the Peace Hotel South Building, taken over by Swatch Group, to the extraordinary Maison Patek Philippe on the Bund… Switzerland’s every brand put down roots in China’s great commercial metropolis. They could also count on Hong Kong, at a time when crowds of mainland Chinese would descend on this trading hub for a few days of living the high life, returning home with a Swiss watch on their wrist.

1998: first signs of an expanding Chinese market.

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The Covid crisis of 2020 brought everyone back to earth with a bump. Flatlining domestic consumption was compounded by the end of travel retail. Sales of watches in Lucerne and Interlaken died a death. Despite signs of a post-Covid upturn, with domestic consumption and – to a lesser extent - travel retail recovering up to December 2023, the decline was still noticeable in March 2024.

Export figures published by the Federation of the Swiss Watch Industry (FH) for March 2024 are a sharp reminder. The Chinese market plummeted 41.5% compared to the previous year, falling to a level below that of March 2020, when the branch virtually ground to a halt mid-month because of the Covid pandemic. Hong Kong, an important hub for watches and, until recently, a gateway to the industry for mainland Chinese, posted a similar decline, losing 44.2% over the same period. Figures for April show a slight improvement. Shipments to China fell by just 7.5% compared with April 2023 while Hong Kong recorded a timid 0.2% increase. The FH goes on to note that, across the ten main export markets, China is the only one to have lost ground compared with April last year.

Recent editions of Europa Star China. Despite a slowdown, China remains a key destination for the long-term growth of Switzerland’s watch industry.

While this deceleration may seem like a rude awakening from a thirty-year Chinese dream, synonymous for some with soaring sales, it will no doubt be a temporary lull. Not only is China’s appetite for luxury goods undiminished, we should consider the wider picture which includes purchases made domestically along with overseas spending. Export figures should be viewed in this light. They should also serve as a lesson to an industry (never an exact science) that is often little inclined to let go of its certitudes; a reminder to always anticipate.

The parameters that made China such an enticing prospect for Swiss watch brands – a vast population, rising wealth and spending power – are now those of India. Empty promise or future El Dorado? A subject for another day.

An article published in 1997. Swiss watchmakers now have India, another demographic superpower, in their sights.

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