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Summary
The global luxury watch market, valued at $52 billion in 2022, has shown resilience with a projected CAGR of 3.25% from 2022 to 2028. Despite setbacks from the COVID-19 pandemic, the French luxury watch market has been recovering. In 2021, sales stood at 1.530 billion euros. The industry faces challenges from the rise of smartwatches, with Apple Watch sales outpacing the entire Swiss watchmaking industry.
Online sales have surged by 27% in 2021, partly due to the pandemic, with distance selling becoming an increasingly vital channel. In contrast, the secondary market for watches is booming, potentially reaching 35 billion Swiss francs by 2030. Swiss watch exports have bounced back strongly after a slump, growing by 11.4% to CHF 24.8 billion in 2022, with China emerging as a key market. Counterfeiting remains a serious issue, with stringent penalties levied against offenders.
The Resilient Appeal of Luxury Timepieces Amidst Shifting Consumer Habits
The luxury watch market in France, and indeed globally, has experienced significant shifts influenced by diverse factors ranging from the global financial crisis to the proliferation of e-commerce and the advent of smart technology. Despite these fluctuations, this segment remains a symbol of opulence and success, with enduring appeal in the upper echelons of society. In the late 1990s, luxury watchmaking observed a surge in demand driven by the influx of tourists from Asia, which continued into the new millennium. In 2022, the French luxury watch market was approaching an estimated value close to 2 billion euros. This space, traditionally occupied by historic enterprises, now contends with new challengers such as fashion brands and artisanal makers.
Moreover, the entrance of tech companies like Apple, which has outsold traditional Swiss brands combined in the smartwatch category, signals a transformative period for the industry. Consumer preferences, particularly among younger generations, show a growing proclivity for luxury watches, highlighting a shift in aspiration towards premium timepieces. Interestingly, willingness to invest considerable amounts exceeds 60% in regions like China, while considerably lower in European countries such as France and Germany.
The French market itself experienced a dip in 2021 due to reduced foreign traffic and retail closures; however, it saw a pivot with a 20% increase in sales—potentially reaching over 1.8 billion euros. The downsizing faced by the industry, with a notable reduction in manufacturing entities over the decade, did not prevent a resurgence of interest in local production, particularly for pieces in the 2,000 to 5,000 euro range.
In terms of market dynamics, luxury timekeeping is a realm dominated by several major groups alongside independent manufacturers and distributors. Firms like LVMH, Richemont, and the Swatch Group command significant market segments, with sales values reaching tens of billions in revenue, while independent watchmakers carve their niche with valuations in the hundreds of millions. Sales strategies have evolved due to economic pressures and competition. Brands have introduced more accessible models and innovative materials, challenging traditional price points and pushing average prices lower—for example, entry-level luxury watches are now available from around 600 euros. The web of regulations is critical in protecting consumers and the integrity of luxury brands. Heavy penalties, potentially involving millions in fines and imprisonment, aim to curb counterfeit trade, safeguarding intellectual property and public safety.
Prominent Contenders Shaping the Luxury Watch Market Landscape
The luxury watchmaking industry boasts a rich tapestry of time-honored and contemporary players, each brandishing its own distinctive charm, saga of craftsmanship, and a loyal following of timepiece connoisseurs. Let us navigate the intricate gears and springs that drive the steadfast presence and positioning of the principal market players within the opulent world of horology.
- The Swatch Group - A Titan of Timekeeping Diversity Under the Swatch Group's extensive canopy are brands revered for their rich heritage and innovation. Breguet stands as a testament to traditional watchmaking artistry while Omega is synonymous with precision, particularly hailed for its history with space exploration. Blancpain's name echoes within the walls where high complications are celebrated, and Longines boasts a strong following for its blend of elegance and sporty appeal. Not to be overlooked are Tissot's accessible luxury and the high-glamour quotient of Calvin Klein.
- LVMH Group - A Symphony of High-tech and Heritage TAG Heuer stitches together history with avant-garde technology, and Christian Dior embodies the seamless blend of fashion and finesse in watchmaking. Zenith keeps time to the beat of its legendary El Primero movement, while Hublot positions itself as a pioneer of fusion where unconventional materials meet Swiss traditions. Each brand in the LVMH portfolio showcases a unique facet of luxury watchmaking, complementing one another and providing the discerning consumer with a spectrum of choices.
- Richemont Group - A Coalition of Prestige and Perfection The Richemont Group houses MontBlanc, known for translating its writing instrument sophistication into horological expressions. Cartier, another pillar within the group, enchants with timepieces that are as much jewelry masterpieces as they are marvels of engineering. Connoisseurs look to Vacheron Constantin for craftsmanship handed down through centuries, Piaget for ultra-thin movements, and Panerai with its distinctive Italian design linked with Swiss ingenuity.
- Rolex- The Quintessential Emblem of Excellence Rolex requires little introduction, reigning over the domain of luxury watches with a crown befitting its status. The brand, alongside its subsidiary Tudor, continues to symbolize unwavering quality and status, with a legacy that is often the benchmark for success within the industry.
- Independent Manufacturers and Distributors- Even in a market dominated by prestigious conglomerates, independent manufacturers hold their ground with remarkable esteem.
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Inforamtion
- Number of pages : 30 pages
- Format : Digital and PDF versions
- Last update : 27/11/2023
Summary and extracts
1 Market overview
1.1 Market definition
Luxury watchmaking is a category that groups together watches from top-quality manufactures, whose manufacture has required precise watchmaking work not only on mechanical movements, but also on the elaboration and finishing of watch cases, as well as on elements such as dials and hands.
The high-end watchmaking segment exploded in France with the rise of luxury brands in the 1990s, driven in particular by the development of mass tourism in Asia since the 2000s. The 2008 crisis put an end to this boom, but the industry has been recovering since 2010.
The French luxury watch market will be worth nearly 1.8 billion euros by 2022.
Traditionally dominated by large historical companies, the market has seen the arrival of new competitors, first in the 1990s, then more recently . Initially, the big fashion brands, but also small artisanal players, are making their mark on this market. Secondly, the development of connected watches has altered the balance in the luxury watch market: Apple, for example, has managed to sell more Apple Watches than all Swiss watch brands combined since 2019!
E-commerce and the trend towards second-hand watches are key elements in understanding the luxury watch market.
However, even though there are many brands in the luxury watch segment in France, four major groups compete in this market. Among these players, the convergence between luxury and watchmaking is undeniable:
- Swatch Group: brands Breguet, Omega, Blancpain, Longines, Tissot, Tiffany & co, Balmain, Calvin Klein
- LVMH Group: TAG Heuer, Christian Dior, Zenith, de Beers, Hublot, Fred brands
- Richemont Group: MontBlanc, CBI, Vacheron Constantin, Piaget, Panerai, Van Cleef & Arpels brands
- Rolex: Rolex and Tudor brands
1.2 A robust global market
The luxury watch market was valued at $** billion in ****, registering a CAGR (***) of *. **% over the ****-**** forecast period.
The global luxury watch market France, ****, in billions of euros Source: ****
globally, consumers' growing preference for high-end, high-quality watches, which are perceived as status symbols, is the main driver of the luxury watch ...
1.3 The French market recomposes itself after the crisis
The market is growing, rising from *.*** billion euros in **** to *.*** billion euros in ****. The French watch market has therefore still not recovered its **** level of *.*** billion euros. By ****, it is estimated that the jewelry and watch sector will have increased its sales by **% [***]! We can therefore estimate that in ****, watch sales ...
1.4 Foreign trade in Swiss watches
In ****, Swiss watch exports rebounded by **.*% following a **. *% contraction in ****. They have thus exceeded not only their pre-pandemic level, but also their all-time high of ****. And in January and February, they rose by a further **.*%, according to statistics from the watchmaking federation. [***]
While Europe bore the full brunt of the strict ...
2 Demand analysis
2.1 Determinants of global demand for luxury watches
The major watch brands are struggling to keep up with demand after the spectacular recovery in luxury goods, to the point of having to delay the launch of some collections in the face of production capacity pressures. [***] La Montre Hermès, which came to present its new collections at the Haute ...
2.2 Foreign tourist arrivals in France boost demand
The current health crisis, particularly in Asian countries and the United States, has led to a decline in visa applications for France since the start of ****.
In fact, the number of visas issued fell by **% year-on-year in the first three months of the year before being virtually nil during the *ᵉʳ containment. ...
2.3 Booming demand for luxury watches online and in e-commerce
On average, most respondents(***) prefer to buy watches in-store. Nearly half of Chinese consumers prefer to shop online, while almost half prefer to shop in traditional stores. France, Japan, Switzerland and Italy have a clear preference for in-store shopping.
When buying a new watch, where are you most likely to make ...
2.4 The rise of second-hand luxury watches
The second-hand watch market, which is booming thanks to millennials and Generation Z, could be worth ** billion Swiss francs (***) by ****, according to a study by Deloitte. [***]
How likely are you to buy a second-hand luxury wristwatch in the next ** months? World, ****, % Source: ****
Luxury goods are seen as good investments in times ...
3 Market structure
3.1 Simplified diagram of market structure
3.2 Watch production in France
The number of companies specializing in watch manufacturing fell by almost **% between **** and ****, as several manufacturers struggled to remain competitive with foreign competitors. In addition, the shutdown of various factories and sales outlets, considered non-essential during periods of confinement, contributed to the decline in French luxury watch production. By ****, this number ...
3.3 Distribution channels for luxury watches
French watchmakers mainly manufacture watch components and accessories, such as dials, cases, hands, bracelets, etc. Finished products such as watches account for less than a third of their total production by value.In luxury watch distribution, there is a concentration of distribution channels, since the network is currently almost entirely represented ...
4 Offer analysis
4.1 Offer typology
There is a wide variety of luxury watch models, but we can draw up the following non-exhaustive list:
Classic watches such as the Montblanc Tradition Automatic Date; Products with horological complications, such as the Piaget Emperador Coussin; Antique watches such as the Patek "Asprey "; Military watches like theHamilton Khaki Field Auto ...
4.2 Pricing strategies at the heart of luxury watch offerings
In ****, the average price of a watch will be €***, compared with €*** in ****. Watch sales account for **. *% of the watch and jewelry sector.
In recent years, a strategy of lowering prices has been implemented throughout the luxury watch market. luxury watch market, in particular to stimulate sales volumes (***). The major companies have ...
4.3 The arrival of connected watches disrupts the luxury watch landscape
The connected watch segment is becoming increasingly important, attracting a wide range of players. Indeed, in addition to the big tech players - Apple, Samsung, Google among others - the traditional players in the watch sector areoffering connected watches.having long ignored the competition from these connected watches, it now appears ...
5 Regulations
5.1 Counterfeiting at the heart of regulations governing luxury watches
Luxury watches are particularly affected by counterfeiting and smuggling. The Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (***) is the authority in charge of fighting these frauds, as specified in the Code de la Propriété Intellectuelle and article L. ***-**. * of ...
5.2 Legislation governing the jewelry and metal trade
Jewelry sales in France are strictly regulated and reserved for professionals. The main points to bear in mind regarding these regulations are as follows:
Declaration of Existence: Before starting a business involving precious metals, jewelry professionals must file a declaration of existence with the relevant guarantee office. This declaration is subject ...
6 Positioning the players
6.1 Segmentation
- Swatch Group
- Rolex
- Richemont
- Michel Herbelin
- Patek Philippe
- Audemars Piguet
- Frederique Constant Alpina
- Dubail
- Kronometry 1999
- Wempe
- Cresus
- Collector Square
- La Cote des Montres
- Berenger
- Pierre Lannier
- Aion Group
- Fleurus Groupe
- Jean Rousseau Manufacture
- LVMH Montres et Joaillerie
- Bucherer (Rolex groupe)
- Vacheron Constantin (Richemont Groupe)
- Tudor (Rolex Group)
- TAG Heuer (LVMH Groupe)
- Seiko
- Richard Mille
- Rado (Swatch Group)
- Parmigiani Fleurier
- Panerai (Richemont Groupe)
- Omega (Swatch Groupe)
- Longines (Swatch Groupe)
- Jaeger-LeCoultre (Richemont Groupe)
- Jacob & Co
- IWC Schaffhausen (Richemont Groupe)
- Hublot (LVMH Groupe)
- Girard-Perregaux
- Breitling
- Breguet (Swatch Groupe)
- Blancpain (Swatch Groupe)
- Bell & Ross
- A. Lange & Söhne (Richemont Groupe)
- Pequignet Horlogerie
- SBM Lip Horlogerie
- Utinam
- Yema
- SIS Maroquinerie Groupe
- Perrin Créations Maroquinier
List of charts
- The global luxury watch market
- The French watch market
- How has your attitude towards owning a watch changed over the last five years?
- Are you ready to pay more than CHF 1,000 for a watch?
- Growth in the number of watchmaking establishments
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Latest news
Herbelin launches Le Coq Sportif's first watch collection - 14/11/2023
- Location of the Herbelin watchmaker: Charquemont, in the Doubs region.
- The Integrated range of watches will be assembled in China using Japanese Myota movements.
- Le Coq Sportif has invested 13.5 million euros in extending its historic factory in Romilly-sur-Seine, Aube.
- Le Coq Sportif employs 160 people in Romilly-sur-Seine.
- The Herbelin group employs 130 people.
- Total sales for the Herbelin group are 25 million euros, of which 30% are exports.
- A complete, mixed collection of watches is scheduled for release before the 2024 Olympic Games.
- Le Coq Sportif sales in 2022: 140 million euros. Le Coq Sportif was taken over in 2005 by Swiss investor Airesis.
Luxury goods: Richemont slowed by declining customer morale - 13/11/2023
- Half-year sales in Europe up 5%
- Jewelry: 68% of sales, up 10% in the first half
- Watchmaking: Down by 3%
- Fashion & Accessories: 1% decline
- Growth in the United States: 1% increase
- Growth in Asia: up 23% at constant exchange rates
At 50, the Péquignet watch manufacturer is back in the limelight - 06/10/2023
- The year 2023 marks the fiftieth anniversary of the Lip affair and the watchmaker Pequignet.
- Pequignet was founded in 1973.
- Hugues Souparis, founder of the family investment fund Enowe, became Pequignet's Chairman in 2021.
- Pequignet, with around thirty employees, became France's only haute horlogerie manufacture after the release of its first in-house movement, the Calibre Royal, in 2011.
- Pequignet was acquired by four of its executives in 2017.
- Several hundred Calibre Initial have already been sold to other watchmakers.
- Pequignet's sales were announced at 2.9 million euros by the end of 2021.
- Sales are expected to increase by 15% in 2022.
Rolex aims to consolidate its hold on the watch market - 31/08/2023
- Rolex accounts for around 40% of sales in the luxury watch sector.
- The company is said to have passed the one million mark in annual production.
- Rolex has also exceeded 10 billion euros in sales.
- The Swiss company plans to invest one billion Swiss francs in new production capacity.
- Rolex buys Bucherer, a major retailer that previously distributed 5% of its volumes
- The group plans to employ around 2,000 people at its new production site in Bulle, in the French-speaking part of the canton of Fribourg.
Global luxury flights: Rolex in the lead. - 25/08/2023
- 60% increase in the number of luxury watches stolen last year
- Rolex accounts for 44% of stolen watches, followed by Omega (7%), Breitling (6%), Tag Heuer (6%), Cartier (4%) and Patek Philippe (3%)
- 90% of stolen watches are men's models
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