1. CHINA - Despite a slowdown in sales at the beginning of this year, the Chinese consumer remains the cornerstone of the contemporary watch market. And Chinese domestic purchasing is becoming ever more important for the sale of new watches, while the second-hand market is increasingly present in purchasing habits in the West. Therefore, everything that happens in China, such as the demonstrations in Hong Kong, has a disproportionate impact on the industry’s performance. Europa Star will be in Hong Kong in September to report on the impact of current events on the watch industry. Our print edition of the autumn will include a major feature on the Chinese market. In the meantime, we invite you to read a 2016 article on the evolution of the Hong Kong market by Jean-Luc Adam, whose lessons are still relevant.

2. PRE-OWNED - The second-hand market is in a strong dynamic, driven by online sales and - paradoxically - both by the shortage of some highly sought-after models and by the stocks of unsold items accumulated in recent years (read our series on leading second-hand platforms such as WatchBox, Chrono24, Chronext or Watchfinder). With the explosion of e-commerce, it is increasingly the resale price that determines the value and appeal of new watches. From now on, second-hand and new watches are operating as a single market, hence the emphasis by brands on regaining control of the digital “jungle” that is pre-owned. Retailers, such as London Jewelers in the United States and Les Ambassadeurs in Switzerland, are also entering the game.

3. VOLUMES vs. VALUE - Having disrupted the global fashion watch segment (read our interview with Efraim Grinberg, on its strategy for Movado Group in the digital age), the ubiquitous Apple Watch (and more generally the connected watch) seems to reinforce the direction taken by the Swiss watch industry towards high-end, increasingly turning to “value” at the expense of “volume”. As the FHH points out, the sector has seen volumes fall by 14.1% in six months, i. e. a drop of over 1.6 million timepieces - at the risk of losing capacities in the industrial production base on which the Swiss high-end segment (also) relies. However, some industrial giants such as Longines are holding up well in the mid-range segment.

4. STARTUPS - Every day new brands appear, driven by a cheaper “entry ticket” into the industry in the digital age. On the other hand, few new brands hold up over time, as the end of the Klokers adventure recently showed (see our article on “Kickstarter brands” here). Instead, we are seeing a phase of market consolidation around the most desired and established brands. A few exceptions confirm the rule, notably in the high-end segment, such as the success of Akrivia which we have been following closely since its inception. Our September print issue will include a report by Pierre Maillard on these “newcomers”.

5. DISTRIBUTION - In a general context of weak growth, the battle is increasingly focused on improving margins. A large number of brands are therefore growing essentially by taking control of their distribution network (on this topic, read this interesting analysis by René Weber of Vontobel published in Swiss newspaper Le Temps). Leading distribution groups and retailers, such as Watches of Switzerland (read our article on their expansion in the United States), are getting closer and closer to the leading brands, particularly through the opening of brand boutiques. The “concentration” of the industry, which sees the most powerful brands reducing their total number of points of sale, goes on.