Luxury watchmakers pivot to India amid slump in Chinese market
Raynald Aeschlimann, president and chief executive officer of watch company Omega, owned by the Swatch Group AG, spoke exclusively to Mint virtually about India as a market and the promise it holds. For the entire group, South Korea, India and the United Arab Emirates also considerably outperformed the previous year. The shift away from China—the largest consumer of luxury in the world—has impacted Swatch, Omega's parent, which reported lower half-yearly sales from a year ago.
The group hopes to target newer markets now. Last week, it reported net sales of CHF 3.44 billion ($3.88 billion) for the first half of 2024, a 14.3% decrease from the previous year. Its operating profit dropped to CHF 204 million from CHF 686 million, with a reduced operating margin of 5.9% compared with last year's 17.1%.
The decline, the company said, was mainly due to reduced demand for luxury goods in China, including Hong Kong and Macau, although the Swatch brand increased its sales in China by 10%. Sales outside China matched 2023 levels at constant rates. From January to May this year, India's imports of Swiss watches stood at CHF 94.2 million, or $105 million, growing 20% over 2023 and 43% from CHF 66 million ($74 million) in 2022, per data from the Federation of the Swiss Watch Industry FH.
However, this could also be due to the devaluation of other currencies including the rupee against the Swiss franc. Edited excerpts: We all always thought selling luxury was easy as it was just about having good products which people would just come to buy. But we often tend to forget that consumers are just buying products and it shouldn't be structural but emotion-invoking.
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