Swiss watch exports to UAE down 7 percent last year
Last year, total exports of Swiss watches to the UAE reached close to $1 billion
Swiss watch exports to the UAE ticked down 7 percent last year, as a shaky economic outlook worldwide sinks demand for the luxury timepieces.
The figure is due to low oil prices, unfavorable currency exchange rates in Russia, Europe and China, and a drop in the gold price, according to UK-based market research firm Euromonitor.
The UAE, well-known for its malls packed with luxury stores and wealthy elites flaunting bejeweled wrists, represents the ninth-largest market for Swiss watches.
Last year, total exports of Swiss watches to the UAE reached close to $1 billion, according to the industry’s main trade group.
But a slow 2015 has had a “ripple effect” into this year, said Euromonitor analyst Amna Abbas.
The industry has also taken a hit from increasingly budget-conscious UAE consumers and changing tourist demographics.
Russian visitors - who once made up a large percentage of those seeking sun, sand and tax-free shopping in the UAE - have largely stayed away as the Ruble continues its downward slide, battered by slumping oil prices and Western sanctions over Ukraine.
The trend is part of a global “deterioration” in Swiss watch exports, which “gathered pace” in March, according a report in the same month by the Federation of the Swiss Watch Industry, the trade group.
The report said that the scale of the downtown in exports was “unusual,” with similar sharp drops not seen since the worldwide economic recession in 2009.
Another report in March from New York-based financial services giant Citibank noted that the “the mood amongst watch retailers [around the world] seems to have deteriorated in recent months.”
Swiss watches are an important part of Switzerland’s economy, making up 11 percent of its exports.
Yet the long-held demand for Swiss luxury timepieces - which commonly utilize intricate winding mechanisms invented close to a century ago - could be running out of time.
The rise of smartwatches, with leading models coming from the likes of US tech giants Apple and Google, present a “greater competitive environment,” according to the Citibank report.
The global smartwatch market is expected to grow from $1.3 billion in 2014 to $117 billion in 2020, the report added. In contrast, the total value of Swiss watch exports last year stood at $22.4 billion.