Watches displayed at an auction in Hong Kong, Oct. 29. (Photo/Xinhua)
Switzerland's exports of watches to mainland China plunged by 26.8% year-on-year in December 2013, according to the latest statistics released by the Federation of the Swiss Watch Industry.
The European country sold watches worth a total of 2.15 billion Swiss francs (US$2.4 billion in the overseas market in November, a 0.5% dip compared with a year ago. The market on mainland China also slipped two spots from its earlier position as the third largest importer of Swiss watches.
As a major market for Swiss watches, Hong Kong also saw sales decline as the export volume dropped by 6.5% in November.
"Demand from government officials had helped sales of watches at bricks-and-mortar stores in China," a source from the industry told the Shanghai-based China Business News, adding that Beijing's anti-corruption campaign over the past year had impacted demand for luxury watches.
After years of rapid development, mainland China's watch market, which used to enjoy a 40% growth rate, witnessed a downtrend during the second half of 2012. The Federation pointed out that the decline had been particularly evident in the Chinese market.
In December of 2012, in particular, exports of Swiss watches to mainland China fell by 32% and those to Hong Kong fell 15%.
The downtrend continued in 2013. In February of 2013, Switzerland's watch exports to mainland China fell by 33.6%, those to Hong Kong fell 24.4% and those to Taiwan fell 10.7%.
The paper stated that domestic watch sales agents also reported lackluster sales, for instance, Hong Kong-based jeweler Chow Tai Fook's sales slipped by 18.2% during the fiscal year ending March 31, 2013.
According to data provided by consultancy Bain & Company, sales in the Chinese watch market had posted an annualized decrease of 11% in 2013, which was greater than the 5% decrease a year ago.
The Chinese government's anti-graft campaign has also dealt a major blow to the practice of giving luxury watches as gifts, the report said.
However, the mid-level watch market had shown stable growth in second-tier Chinese cities, with sales of Elegant's affordably priced watches appreciating by 13.9%.
Bain predicted that the high-end watch market would be hurt further if the government continues with its frugality drive next year.