The recent stimulus measures by the Chinese government have failed to substantially boost consumer confidence, as Chinese people continue to exhibit caution in their spending habits. Against this backdrop, in October, Swiss watch exports saw a second consecutive monthly decline, largely due to a significant decrease in shipments to China which offset growth in the US and Japan.
On Tuesday, November 19, the Boston Consulting Group stated in a research report that the recovery of Chinese consumer confidence has been significantly impacted by economic and geopolitical issues. The study, initiated in mid-October, covered multiple cities and over 30 consumer categories.
The Boston Consulting Group noted, “Consumer confidence remains neutral to slightly negative.” The research report further added that government stimulus programs have not significantly increased consumer incomes.
On the same day, the Federation of the Swiss Watch Industry stated in a release that overall exports of Swiss watches and watch movements decreased by 2.8%, totaling approximately CHF 2.3 billion (USD 2.6 billion), with Chinese imports declining by 39%.
These figures highlight the challenging environment faced by watch manufacturers such as Rolex, Audemars Piguet, and Swatch, as consumers in mainland China and Hong Kong reduced purchases of expensive timepieces.
While Swiss watch exports to the two largest importing countries, the US and Japan, showed steady growth, it was offset by the slump in mainland China and Hong Kong.
Data indicates that shipments to the US from Switzerland grew by 11% and by 20% to Japan. Overall Swiss exports saw a 2.6% decline compared to the same period last year in the first ten months of this year.
The report from the Boston Consulting Group noted that consumers who previously made lavish purchases of luxury handbags and indulged in luxury travel are now increasing their savings to cope with future uncertainties, a trend that may impede long-term consumer recovery.
The Boston Consulting Group mentioned that the proportion of people in China experiencing income growth has decreased by 27%, negatively impacting expectations for consumer income in the next six months.
(This article referenced reporting from Bloomberg News)