Swiss Watch Exports

[dbfagan]

i found this interesting, thought I would share:

https://www.hodinkee.com/articles/ho...n-october-2019

I was really surprised by China's numbers considering the current political climate-trade wars and such.

[Calatrava r]

Its really nice to read the watch industry has been in a three year recovery over all. It is a very tough market to be in, no doubt about that.

[uniqueMR]

Thanks for the post.

[uniqueMR]

Interesting

[Ichiran]

The way I see this is that Chinese are now buying in mainland, Japan, Singapore and Korea instead of HK. Total export rose by 10.2% globally, and we can't just look at the HK drop in silo due to the ongoing protest there.

[Fat_ninja]

Originally Posted by Ichiran

The way I see this is that Chinese are now buying in mainland, Japan, Singapore and Korea instead of HK. Total export rose by 10.2% globally, and we can't just look at the HK drop in silo due to the ongoing protest there.

Onshoring... yup


Question I had was what happens to the greys in HK

[TJMike]

Originally Posted by Fat_ninja

Onshoring... yup


Question I had was what happens to the greys in HK

I will be in HK next month. If I have time, may try to investigate.

[ct.matt]

First the NBA, Apple, Activision Blizzard et al.. add Swiss watch manufacturers to the list lol

[locutus49]

Excellent article. Thanks.

[77T]

Originally Posted by dbfagan

i found this interesting, thought I would share:



https://www.hodinkee.com/articles/ho...n-october-2019



I was really surprised by China's numbers considering the current political climate-trade wars and such.

Thanks for sharing the link - I think we would need to go back over the past 4 years of reports to plot coefficients of fitness to support the conclusion that US sales are poised to overtake China.

The tariffs haven’t slowed luxury goods here so profit in China should continue in that segment too.

Per the report:
The geopolitical/economic uncertainties have clouded the economic picture for the Swiss watch industry all year.

I tend to agree this will continue.


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[Fat_ninja]

I didn’t read the report but here’s a different look at the same data. The light blue line is 2019. Green line is 2018. Blue like is the 5 year average.

The shipments are behaving with seasonality...
This past Sept shipments is actually higher than the same time in 2018.

World shipments are not weak in totality...





And these are the actual year over year growth rates. You can see Sept pretty strong...


Enjoy

[TJMike]

Originally Posted by Fat_ninja

I didn’t read the report but here’s a different look at the same data. The light blue line is 2019. Green line is 2018. Blue like is the 5 year average.

The shipments are behaving with seasonality...
This past Sept shipments is actually higher than the same time in 2018.

World shipments are not weak in totality...





And these are the actual year over year growth rates. You can see Sept pretty strong...


Enjoy

Thanks!

One thought: by all indications the gray market is experiencing a correction (if not worse), but Swiss exports are up. However, these are just exports to retailers, not consumers. As such, the increase in exports may well lead to a further glut in the market as watches go unsold.

[Fat_ninja]

Originally Posted by TJMike

Thanks!

One thought: by all indications the gray market is experiencing a correction (if not worse), but Swiss exports are up. However, these are just exports to retailers, not consumers. As such, the increase in exports may well lead to a further glut in the market as watches go unsold.

That’s a good point but difficult to gauge this as there is no measure of inventory. As such one must assume inventory is static... so shipments = demand.

I follow a lot of things in china professionally... and the data sets are very fuzzy

[TJMike]

Originally Posted by Fat_ninja

That’s a good point but difficult to gauge this as there is no measure of inventory. As such one must assume inventory is static... so shipments = demand.

I follow a lot of things in china professionally... and the data sets are very fuzzy

It would be a good assumption if Swiss retailers did not have a history of massive buybacks. Things, of course, are meant to be different now.

I follow a lot of things in China personally; lived here for a long time :)

[77T]

Originally Posted by Fat_ninja

I didn’t read the report but here’s a different look at the same data.

If you go back and look at the report you’d see that isn’t the same data. The report is focusing on growth rate by market - not only raw data YoY.

If you can plot the data by country then it’d be the same data.



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[Fat_ninja]

Originally Posted by TJMike

It would be a good assumption if Swiss retailers did not have a history of massive buybacks. Things, of course, are meant to be different now.

I follow a lot of things in China personally; lived here for a long time :)

I thought Only Reichemont did the buyback....and that was concentrated on cartier I believe. My teammate back in the day spoke with management about it durning that period.


I’ve only been once... lots of delicious pets...er....I meant food.
Lol

[Fat_ninja]

Originally Posted by 77T

If you go back and look at the report you’d see that isn’t the same data. The report is focusing on growth rate by market - not only raw data YoY.

If you can plot the data by country then it’d be the same data.



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My system only allows me to look at the aggregate exports... the swiss watch export data allows u to see it by price point, precious metals and also country.

I just look at the aggregate monthly data these days. Gives me the higher level data and if interested u can read the actual report which is free... here

https://www.fhs.swiss/eng/statistics.html

[TJMike]

Originally Posted by Fat_ninja

I thought Only Reichemont did the buyback....and that was concentrated on cartier I believe. My teammate back in the day spoke with management about it durning that period.


I’ve only been once... lots of delicious pets...er....I meant food.
Lol

Richemont did it, and as you note was mostly about Cartier.

From the Hodinkee article "Swatch Group announced this year that it has stepped up efforts to battle the gray market. It says it has spent at least CHF 100 million in the first half of 2019 on anti-gray-market efforts."

As for your China comment. I will take it in good humor while noting my wife is Chinese as is my daughter. All good, after all I am sure you eat dirty water dogs with the main component being subway rats :)

[Fat_ninja]

Originally Posted by TJMike

Richemont did it, and as you note was mostly about Cartier.

From the Hodinkee article "Swatch Group announced this year that it has stepped up efforts to battle the gray market. It says it has spent at least CHF 100 million in the first half of 2019 on anti-gray-market efforts."

As for your China comment. I will take it in good humor while noting my wife is Chinese as is my daughter. All good, after all I am sure you eat dirty water dogs with the main component being subway rats :)

I’m chinese...my kid is mixed.... but I’ve trained her to say delicious everytime she sees a dog :)

[TJMike]

Originally Posted by Fat_ninja

I’m chinese...my kid is mixed.... but I’ve trained her to say delicious everytime she sees a dog :)

Haha. Did not realize you are Chinese; I must be must be more colorblind than I thought.

[WatchLurv]

Said this from time ago.

The weakening of Yuan + demonstrations in Hong Kong has meant that watch prices have fallen. It still doesn't mean that they'll go back to MSRP as supply is still tightened by our favourite brands.

[Fat_ninja]

Originally Posted by TJMike

Haha. Did not realize you are Chinese; I must be must be more colorblind than I thought.

See now u know that it’s okay for Me to make eating dog jokes :)

[liljctl]

Originally Posted by Fat_ninja

See now u know that it’s okay for Me to make eating dog jokes :)

There's an Asian ghetto?

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[Fat_ninja]

Originally Posted by liljctl

There's an Asian ghetto?

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I grew up in Chinatown when there were still gangsters... then we moved into the non Asian ghettos for some culture.

Then that said ghetto got gentrified.


Separately... my team bought me this so that I can know what’s going on.

[A971]

Originally Posted by Fat_ninja

Separately... my team bought me this so that I can know what’s going on.

Hahahaha! That is so great!

I should pick up that book for my wife for the next time we visit the states...


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[Fat_ninja]

Originally Posted by A971

Hahahaha! That is so great!

I should pick up that book for my wife for the next time we visit the states...


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Don’t. It’s not accurate. We been going through it

[TJMike]

Originally Posted by Fat_ninja

See now u know that it’s okay for Me to make eating dog jokes :)

That was always a Korean racist stereotype in Australia.

[77T]

Originally Posted by Fat_ninja

My system only allows me to look at the aggregate exports... the swiss watch export data allows u to see it by price point, precious metals and also country.



I just look at the aggregate monthly data these days. Gives me the higher level data and if interested u can read the actual report which is free... here



https://www.fhs.swiss/eng/statistics.html

Understand - and I only found the data going back last 3 years, 2016-2018.

FWIW, here are some screen shots for the top 4 countries that imported Swiss watches. The bars are in $USD Billions.

2016

__________________________________________


2017

__________________________________________


2018

__________________________________________

Note that different markets populated the top 4 importing spots in different years. Inside each bar is a percent gain or reduction in import dollar value.

One thing to recall is the value has been organically gaining year over year - not solely because of price increases but also because the “entry level” watches are being produced in “lower numbers” (their words).

As we chart and discuss the country differences we should be sensitive to staying within the bounds of TRF rules regarding political and cultural discourse.


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[Fat_ninja]

Bulgari talking about HK and China on Bloomberg. U can probably google this later

Basically talks about onshoring in China