ow an annual tradition, the Deloitte watch industry study takes the form of a broad opinion survey conducted among professionals in Switzerland and watchmaking enthusiasts in the main markets.

The tenth edition of the study now out is based on a survey carried out among 75 senior executives in the watch industry (representing independent brands, groups, subcontractors and retailers) for gathering their viewpoints. A further survey was carried out among 6,000 consumers across twelve countries.

We identify three key points in the study and include insights provided by managing partner Karine Szegedi, Head of Consumer Industry and Fashion & Luxury at Deloitte.

Karine Szegedi, Managing Partner Consumer Industry and Fashion & Luxury at Deloitte

1. High hopes for India

In each study, the Deloitte team asks the following question of industry executives: Which is the most promising market for Swiss watchmaking? In the past, this may, of course, have been China, the US, or Indonesia. But this year, for the first time, it’s India, voted by a “resounding majority” of respondents.

Admittedly, for structural reasons (e.g. strong protectionism and expansion pursued through dominant local brands), India’s impact for the watch industry is notoriously under-estimated, given its potential as the most populated country in the world. The country was only 23rd last year in the FH export market rankings, behind Austria and Qatar. Analysts at Deloitte are predicting that Swiss watch exports to India will be valued at 400 million Swiss francs by 2028, compared with less than 200 million thus far.

What might improve the situation? Firstly, there is a “move upmarket in retail distribution” with the development of quality players such as Kapoor Watch or Ethos Watches, with their expanding network, Karine Szegedi reminds us. Secondly, of those surveyed, a whopping 94 percent of respondents in India were most likely to wear a watch, a statistic matched only by the United Arab Emirates.

“The consumer base is not only vast, it is also increasingly moneyed and appreciative of luxury - qualities that are attracting the industry’s attention. We think that India will be in the top 10 Swiss export markets within the next decade or so”, explains Karine Szegedi.

2. Return of the in-person experience

Another interesting key point of the watch industry study is that the in-person experience “is winning over digital convenience”, in the wake of the strong growth in online investments during the pandemic. “Brands have adapted, but direct contact does not work so well online. “Touch-and-feel” is back in fashion. There may also be a form of digital fatigue”, according to the specialist, who is also observing a decline in digital experiences, in contrast to the in-person experience in the auction world.

Direct in-person contact between watch brands and their end consumers via bricks and mortar outlets, pop-up spaces and watch fairs thus remains an essential factor. According to the study, consumers primarily buy watches in stores in order to touch, test and try them out (52%), whilst 43% preferred direct contact with the sales staff. Most brands and retailers (62%) agree that offline sales will continue to prevail over online sales in the next five years, with differences depending on price segment.

Same goes for watch fairs, which came under huge pressure prior to the pandemic: the situation is now reversed. In a world that has gone digital, watch fairs have retained huge importance: nine in ten senior executives consider them to be essential to connecting with potential customers and expanding their audience base.

“The digital space is unable to replicate the electric atmosphere of the watch fair or the auction salesroom, nor can it recapture the brand spirit exuded by a bricks and mortar store. Nonetheless, social commerce, with its personalised recommendations and instant purchases made through connected apps and mobile payment options, is emerging as a crucial sub-channel for the industry. Already well established in Asia, social commerce is converting on-screen time into a gratifying experience conducive to shopping”, explains Karine Szegedi.

3. In-house sustainable development

On the question of sustainable development, the survey highlights a “fundamental paradigm shift”, reports Katrine Szegedi, whereby these concerns are factored in through, say, the appointment of specialised managers to the boards of some of the biggest luxury groups.

“Last year, we felt that brands were talking about sustainable development because they had to. Makor communication efforts were focussed on the subject. Today, they are beginning to integrate sustainable development in all their decisions, and not just because of external pressure”.

More than two thirds of respondents state that sustainable development is part of their corporate strategy and that they are investing in areas such as circularity or governance structures. For brands, certified ethical gold (86%), recycled materials (76%) and leather alternatives (74%) are likely to play an important, or very important, role over the next five years.

Consumers are also in favour of this approach: 34% would choose a watch made by a brand centred on sustainability, whilst only 25% would prefer a brand focused on promoting its image. Young generations prioritise sustainability over brand image. This shift underlines the watch industry’s need to integrate sustainability into its core business strategy.

READ THE STUDY