Analysis: World Timepiece Industry Facing Greater Challenges

With the continuing decline of demand and market recession, the world timepiece industry is facing greater challenges at the beginning of the new millenium.

This warning came from a group of manufacturers for watch and clock industry from China, Japan and Switzerland immediately after they attended the Asian Watch Industry Conference in Hong Kong Friday.

Analysts here said that there has yet to have any sign of the good news of the new round of turn for the better timepiece market, instead the market recession and supply in excess of demand have not yet been improved substantially.

"In China, the measures taken by the government to stimulate consumption are just inadequate for the timepiece market, and therefore it will be risky to merely hope that the market can take a favorable turn," Li Shiyu, chairman of Rossini Watch Industry Ltd. and vice-chairman of China Horologe Association, said.

However, China's timepiece has quietly and thoroughly remolded itself, and there do exist a few outstanding enterprises that dedicate themselves to the creation of famous brands and hope to be recognized and supported by all, Li added.

In Japan, the output of the domestic watch industry has declined for two consecutive years in terms of both quantity and value, according to Yukio Shima, director of the JKS News & Magazine, who established the status of the Japan's largest industry paper specialized in watch and clock and jewelry.

According to the report "Trends of Domestic Watch Industry in '99" issued by the Japan Watch Association, the total output of the member manufacturers in 1999 was 88 million pieces of finished products in terms of quantity, 25 percent down from the previous year, and 144.3 billion yen in value, a reduction of 29 percent compared with that in 1998.

The watch manufacturers lead the watch industry in Japan, and the retailers lack an independent strategy, Shima said. The manufacturers including Seiko and Citizen are trying to enter into the fields other than watches and consequently watch sales account for less and less in total sales, he said.

"I think the Japanese watch industry has reached an important and critical turning point where they must go through a structural reform right at the start of the 21st century," Shima said.

The recent consumer trend has shifted from practicality to design that brought about in the market many varieties of watches including the revival of old models and the animation character watches, Shima explained. Another trend is centered around the young people from teens to 20s who prefer mobile phones with built-in watch functions, he added.

Things seemed much better for the Switzerland's manufacturers. Swiss brands have always had a sway over the Chinese market of high grade products and this situation will keep on for a considerable period of time. And in Japan, despite a decrease in sales of domestic products, imports from Switzerland was increased.

"We are the largest single purchaser of Rolex watches in the world having on hand the largest number of references of them and we also represent successfully Audemars Piguet, Piaget and other brands," said Jean-Marc C. Anderegg, executive export manager of BUCHERER Limited.

"The success is due to a harmoniously and professionally built segmentation of our own brands filling the gap unoccupied by the other brands in the market," Anderegg said. For BUCHERER Swiss Made Watches export, the Far East counts for about half of our yearly sales turnover, Anderegg said.



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