Geneva's annual post-summer watch gathering packed the city this week, with a record 71 brands staging displays across hotel rooms, boutiques and pop-up exhibits. The strong turnout masked deeper jitters about where growth comes from next.
Jean-Christophe Babin, who serves as president of Geneva Watch Days and as chairman of Bulgari, said younger shoppers put less stock in status and brand allegiance and are "more about excitement, emotion, discovery." He argued the industry has played it too safe, focusing on technical tweaks instead of bigger, braver concepts. "Today, that's the main challenge of the industry," he said.
Babin highlighted the Royal Pop project by Audemars Piguet and Swatch as the kind of jolt that can bring in newcomers without turning off loyalists. Unveiled earlier this year, the collection reimagined Royal Oak design cues as bright, accessible pocket watches aimed in part at younger buyers. Those kinds of swings have been rare, he noted.
Switzerland still leads luxury watchmaking, but the Federation of the Swiss Watch Industry reports shipments totaled just 14.6 million timepieces last year, down from 25.4 million in 2016. Many makers tried to offset falling volumes by pushing further upmarket - a move that mostly benefits scale leaders like Rolex, Patek Philippe and Cartier. Mid-tier brands and their suppliers are taking the hit.
At the very top, collector appetite still exists. But the middle is getting squeezed, said Rodolfo Festa-Bianchet, the CEO and co-founder of Bianchet, whose watches sit at the higher end. He said the ultra-high segment continues to draw "collector interest, but it's a tougher market for those in the middle."
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Babin criticized the sector's timid, conservative reaction to shifting preferences and cautioned that absent bolder experimentation, "it will be very difficult to recover volumes."
Competition is intensifying. Babin said movements produced in China have reached a quality level on par with ETA SA and Sellita for routine complication work. He cited Laopu - a Chinese high-end jeweler that ranks among the nation's most talked-about consumer labels - as evidence that Western leaders can be unseated in short order.
Chinese watchmakers are also selling more mechanical models straight to global buyers online, bypassing traditional retail and putting extra pressure on mid-priced Swiss products. Japanese brands are adding to the squeeze. Oliver Müller, founder of advisory firm LuxeConsult, said Seiko, Citizen and Casio are doing well partly because they are not trying to move customers up the price ladder the way many Swiss companies do. "Gen Z probably gives less weight to the Swiss-made hallmark," he said. "Each of these brands is marginal on its own, but aggregated they are taking volume away from the institutional Swiss-made brands in the mid-price segment."
Investors hoping for a quick snapback in luxury after a period burdened by geopolitical strains, tariff headwinds, and weaker demand from China may need to be patient. Breitling CEO Georges Kern cautioned this could be the sector's "new normal."
The core problem is no longer only how to charge more. The key challenge now is persuading younger cohorts to purchase more watches. Switzerland is still the industry's anchor, but the slide from 25.4 million exports in 2016 to 14.6 million last year shows how the ground has shifted.
For anyone watching luxury names, track who can spark real excitement for younger buyers while mid-market players face mounting pressure from Japanese and Chinese rivals. Executives contend these dynamics pose greater concern than the conflict in the Middle East, and they are influencing the trajectory of future demand.
