The United States overtook Hong Kong as the No.1 market for Swiss watch exports in July as cash-strapped watch retailers in Hong Kong held back from ordering new timepieces.
Swiss watch exports dropped 14.2% in value terms in July, taking the decline for the first seven months of 2016 to 11.1%, the Swiss watch federation (FH) said in a statement on Tuesday.
Exports to Hong Kong fell 33% in July, while shipments to the United States declined 15%, meaning the United States is now in first place with a 10.9% overall market share, versus 10.7% for Hong Kong.
Demand for Swiss watches is down because fewer tourists—particularly from China—are visiting Europe’s luxury shopping hubs in the wake of recent attacks and the Hong Kong market collapsed after a Chinese government crackdown on corruption.
Britain was a bright spot, posting a 13.4% rise in value terms in July, as the fall in the pound triggered by the June vote to leave the European Union created a price gap with other markets.
France remained weak as fears of Islamist attacks kept tourist shoppers away and sales to Germany fell almost 24%.
The data shows a particularly steep decline for watches with an export price of less than 200 Swiss francs ($207.84), with volumes down almost 20%, indicating the rise of smartwatches like the Apple Watch may have an impact.
“Swatch (SWGAY) should join the ‘smart watch’ rush — in partnership with one of the prevailing ecosystems. Android appears its best bet,” Exane BNP Paribas analyst Luca Solca said in a note.
“Self-cannibalization would be better than losing share to new entrants, or faster paced peers like TAG Heuer.”