As 2021 begins, the Swiss watch industry is navigating a new and unfamiliar retail landscape: For the first time, China is the world’s largest market for its products. China’s almost 1.4 billion residents have been the biggest buyers of luxury watches for several years. But most of their purchases had been outside the country, to take advantage of lower sales taxes in destinations like London, Dubai and Hong Kong. Then came the pandemic, the suspension of international travel and a resulting surge in Chinese luxury consumers' shopping domestically.
“We calculate that around 70 percent of Chinese luxury spend used to happen in the overseas market,” said Véronique Yang, a managing director and partner at Boston Consulting Group in Shanghai. “In 2020, that figure fell to around 30 percent. Chinese people have started to purchase within the domestic market.” And the result? According to the Federation of the Swiss Watch Industry, the most recent figures show exports of Swiss watches to mainland China totaled 2.1 billion Swiss francs ($2.39 billion) from January to November 2020, an increase of 17.1 percent from the same period in 2019.