GENEVA: Switzerland’s major luxury watch brands are cautiously optimistic that Chinese tourists will boost sales this year, if they return to Europe in large numbers after the easing of domestic COVID-19 restrictions.
Exports to China, a key market for watchmakers, contracted by 13.6 per cent in 2022 due to Beijing’s zero-COVID policy and the surge in infections when it was lifted at the end of the year.
However, exports began to rebound in February – up 8.2 per cent year-on-year, according to the Federation of the Swiss Watch Industry.
“China will regain a positive dynamic,” the federation’s president Jean-Daniel Pasche, told AFP at the industry’s annual Watches and Wonders trade fair in Geneva, where 48 brands such as Rolex, Cartier and Patek Philippe were showing off their latest creations.
With China reopening, many financial analysts have sharply raised their growth forecasts for the luxury sector as a whole in 2023.
During COVID-19 lockdowns, Chinese consumers built up significant savings, with HSBC analysts pointing to estimates of 6.6 trillion yuan (US$960 billion) in excess savings accumulated over the past three years.
Morgan Stanley analysts expect Chinese consumer spending on luxury goods to increase by 20 per cent in 2023.
According to the US investment bank’s estimates, luxury goods lovers in China made up about 60 per cent of the sector’s growth between 2000 and 2019.
Nearly three-quarters of their spending was done abroad, representing a windfall for Europe’s luxury boutiques.
APPETITE FOR TRAVEL
That said, Chinese luxury consumers have become more accustomed to buying domestically during the COVID-19 pandemic.
The Swiss luxury goods giant Richemont sounded a note of caution.
“We see people going back to the stores with an appetite to buy and an appetite to travel,” said Cyrille Vigneron, chief executive of the group’s flagship brand Cartier.