By January 2017, the Swiss industry will likely be heading for a third calendar year of drop in exports, following the stagnation that it underwent throughout 2013 and 2014. One month earlier, Bloomberg was reporting that Swiss exports have bottomed to 1984 figures, a time when the Swiss industry’s structural weakenesses had been laid bare by the impact of the 1970’s energy crisis.
Throughout 2015, many were assuming that smartwatches would post a serious threat to traditional watches, but our research on the two industries suggests that the tech industry in its current state has too many constraints preventing it from competing head to head with the watch industry. Sales of smartwatches have stagnated in 2016, with smartwatch pioneer Motorola throwing in the towel and permanently suspending development of the product line. This turn of events validates our conclusions that the slump in watch exports may be caused by the combination of four phenomenons unrelated to smartwatches.
The 2007 Subprime crisis caused a global recession that should by all means have damaged watch sales, but the industry was able to delay adressing its outdated business model until the 2015 Chinese stock market turbulence. Throughout 2015 and 2016, the market has been gradually shunning the outdated business model of established brands.
Despite the gloomy global economic situation, the success of several brands such as ICE-Watch (established 2007), Daniel Wellington (established 2011) and Helgray (established 2014) between the two crisis validates our conclusions that consumers are still willing to spend on watches that offer a novel, fresh and genuine value proposition. One of the most compelling examples of success despite challenging times is the Helgray Watch Company, which managed to raise a consolidated capital of more than 680,000 USD with less than 3,000 watches.