Swiss watchmakers anxiously await the return of Chinese tourists
Swiss luxury watch brands are hoping for a boost in sales this year from Chinese tourists if they return to Europe in large numbers following the easing of domestic Covid-19 restrictions. Exports to China, which is a key market for watchmakers, decreased by 13.6% 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 started to recover in February, increasing 8.2% year-on-year, according to the Federation of the Swiss Watch Industry. With China reopening, many financial analysts have increased their growth forecasts for the luxury sector in 2023. HSBC analysts estimate that Chinese consumers have accumulated approximately 6.6 trillion yuan (US$960 billion) in excess savings over the past three years. Morgan Stanley analysts expect Chinese consumer spending on luxury goods to rise by 20% in 2023.
However, Chinese luxury consumers have become more used to buying domestically during the pandemic, and Richemont, the Swiss luxury goods giant, cautioned that it was hard to predict how the Chinese market would develop in the short term. Guillaume de Seynes, a director at leather goods giant Hermes, stated that the desire to return to Europe was present but flights, particularly to France, were still restricted. Antoine Pin, director of Bulgari’s watch division, predicted that wealthy clients would be the first to return to Europe from China because plane tickets are quite expensive. Industry analyst Jon Cox, from the Kepler Cheuvreux financial services company, stated that companies relying on the Chinese returning to Europe this year might face challenges as it will take time for the Chinese to return to Europe in the way they did before Covid.