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MARKET OVERVIEW

1.1 Market definition

Luxury watchmaking is a category that groups together watches from quality manufacturers whose manufacture required precise watchmaking work 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 recovered since 2010.

Traditionally dominated by large historical companies the market has seen the arrival of new competitors first in the 1990s, and then more recently. Indeed, in the first instance, the large fashion brands but also small artisanal players are trying to make a place for themselves on this market. Secondly, the development of smartwatches has changed the balance in the luxury watch market: Apple has, for example, managed to sell more Apple Watches than all Swiss watch brands combined, in 2019.

However, even though there are many brands in the luxury watch segment in France, four major groups are competing in this market. Among these actors, the convergence between luxury and watchmaking is undeniable :

  • Swatch Group Breguet, Omega, Blancpain, Longines, Tissot, Tiffany
  • LVMH Group TAG Heuer, Christian Dior, Zenith, de Beers, Hublot, Fred
  • Richemont Group brands MontBlanc, CBI, Vacheron Constantin, Piaget, Panerai, Van Cleef
  • Rolex

 

1.2 A robust global market

The global luxury watch market is a large and mature market. In ****, it was worth €** billion overall, driven in particular by consumption in Asian countries - China in particular. However, as we can see from the graph below, the luxury watch market has declined slightly over the years to reach a ...

1.3 The French market is changing

The following graph shows the market value development of the watch industry in France from **** to ****. Thus, it can be seen that the market is growing from *.** billion in **** to *.** billion in ****. The French watch market has thus surpassed its previous all-time high, which was reached in **** with sales of over ...

1.4 The impact of the COVID-19 crisis on the luxury watch market

The luxury goods sector was hit hard by the coronavirus crisis in ****. Indeed, for the first time since ****, the main market for luxury goods recorded a **% drop to *** billion euros [***]. The entire luxury market recorded a decline of more than *,*** billion euros on a global scale. The luxury watch segment was ...

ANALYSIS OF THE DEMAND

2.1 French demand for luxury watches

Household consumption of watches and measuring instruments has fallen by nearly **% in value by **** due to the health crisis. More generally, the market has grown very little in value in recent years due to the decline in purchasing power in France, as well as the strong uncertainties associated with international ...

2.2 The arrival of foreign tourists in France is driving 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 beginning of ****.

Indeed, the number of visas issued fell by **% year-on-year in the first three months of the year before being virtually nil during the first quarter. ...

2.3 In France, demand for luxury watches is shifting away from watch retail stores

The number of retail establishments selling watches, including luxury watches, has been declining since the beginning of the decade. Indeed, as we can see from the graph below, the number of establishments specializing in the sale of watches and clocks went from **** establishments in **** to only **** in ****, a decrease of almost ...

MARKET STRUCTURE

3.1 Simplified diagram of the market structure

3.2 Watch production in France

The number of companies specialising in the manufacture of luxury watches declined by almost **% between **** and ****, given the difficulties encountered by several manufacturers in remaining competitive in the face of foreign competition. In addition, the shutdown of various factories as well as several sales outlets considered non-essential during periods of confinement ...

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 the distribution of luxury watches, there is a concentration of distribution channels since the network is currently almost ...

ANALYSIS OF THE OFFER

4.1 Type of watches

The luxury watch, from a neat and precise instrument to a real aesthetic or technological jewel, with a strong symbolic value thanks to its function of time measurement, can take many forms.

For example, the luxury watch can be made of precious jewels, some models are made of precious stones, equipped ...

4.2 Pricing strategies at the heart of the luxury watch offer

In recent years, a strategy of lowering prices has been implemented throughout the luxury watch market. This is particularly true for sales volumes (***). The large companies have developed more accessible models with prices starting at *** euros, thus stimulating demand from the middle classes, since the luxury watch, meeting personal and social ...

4.3 The arrival of smartwatches disrupts the luxury watch landscape

The smartwatch segment is becoming increasingly important, attracting many players. Indeed, in addition to the big tech players - Apple, Samsung, and Google among others - traditional players in the horlogerie offer connected watches. After a long period of ignoring the competition from these smartwatches, it is now apparent that the ...

REGULATION

5.1 Counterfeiting, at the heart of the 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 combating such fraud, as specified in the Code de la Propriété Intellectuelle and article L. ***-**. * of ...

POSITIONING OF THE ACTORS

6.1 Segmentation

  • Groupe Swatch
  • LVMH Vins et Spiritueux
  • Rolex
  • Richemont
  • Michel Herbelin
  • Patek Philippe
  • Audemars Piguet
  • Frederique Constant Alpina
  • Dubail
  • Kronometry 1999
  • Wempe
  • Cresus
  • Collector Square
  • La Cote des Montres
  • Berenger

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Analysts

Hugo S.

chargé d'études économiques, Xerfi

Hugo S.

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Mathieu Luinaud

Associate Consultant

Mathieu Luinaud

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Education Formation
Robin C.

PhD Industrial transformations

Robin C.

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Pierre D.

Analyst

Pierre D.

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Ross Alumni Club France

Arnaud W.

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Pierrick C.

Consultant

Pierrick C.

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Maelle V.

Project Finance Analyst, Consulting

Maelle V.

Héloise Fruchard

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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Imane E.

EDHEC

Imane E.

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Vincent D.

Auditeur

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Eva-Garance T.

Eva-Garance T.

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Michela G.

Market Research Analyst

Michela G.

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Azelie P.

Market Research Analyst @Businesscoot

Azelie P.

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Cantiane G.

Market Research Analyst @Businesscoot

Cantiane G.

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Jules D.

Consultant

Jules D.

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Alexia V.

Alexia V.

Emil Ohlsson

Emil Ohlsson

Anna O.

Anna O.

Gabriel S.

Gabriel S.