The Swiss watch industry has become obsessed and overly reliant an growth in Asian markets, leaving them exposed to shocks like the pandemic and neglecting the United States, which should be the most lucrative market in the world, according to Audemars Piguet CEO François-Henry Bennahmias.
Speaking to Business of Fashion, a business title covering the luxury sector, Mr Bennahmias insists that the watch business has significant potential for growth, but must take a more balanced approach to international markets.
“A few years ago there was this never-ending story about how the watch industry would just keep growing, no matter what. “Asia’s coming, China’s coming, India’s coming — so let’s make more and more watches.” But watch people focused on Asia and abandoned the US market and that was a huge mistake,” he told Business of Fashion contributor Robin Swithinbank.
“You never let the US market go, never,” he continues. “That is stupidity.”
Mr Bennahmias notes that successful luxury fashion brands do a minimum of 20 to 25% of global sales in the Americas.
In 2019, worldwide Swiss watch exports were valued at CHF21.7 billion, of which exports to the United States totaled CHF2.4 billion, just over 10% of the world total. Exports to China, Hong Kong, Singapore and Japan added up to CHF7.6 billion in the same year.
“The watch world has focused so much on Asia that some brands are now doing 80% of their business in Asia and have forgotten the Americas. The US takes time to build, but when it works, it works extremely well,” Mr Bennahmias urges.