COVID-19 has disrupted nearly every aspect of our life. It also resulted in a sharp decline in activity for the luxury goods sector as a whole, and for the watch industry in particular. In 2020, Swiss watch exports dropped by 21.8% in value to CHF 17 billion, below their 2011 level! The rate of global economic recovery relies heavily on the course of the pandemic. Despite a resurgence of infections in some areas, confidence is slowly rising about an end to the pandemic. The luxury watch industry is expected to recover in 2021 (still, with substantial damage to undo and challenges to address) and the Swiss watch exports are showing signs of improvement. At CHF 5,067 million, Swiss watch exports grew by 6.6% over the first quarter compared with 2020. Compared to 2019, Swiss watch exports are down 1.3%.
More specifically, for the month of March 2021, Swiss watch exports increased by 37.2% compared to March 2020. Naturally, this has to be considered in view of the very low basis for comparison for 2020, as the global lockdown in the first wave of the pandemic triggered the strongest economic contraction in decades. Compared with the 2019 baseline, the month-to-month change was +7.4%.
More than ever, watch brands find hope in China. China was the first major economy to recover from COVID-19. With the ban on international travel, Chinese consumers have spent a growing proportion of their luxury budget at home. As a consequence, mainland China has become the number one destination for Swiss watch exports. At CHF 759 million, exports to China are up 94.5% over the first quarter of 2021 and represent about 15% of the total value of watches shipped out of Switzerland versus 8.2% a year earlier.
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