The high-end watch industry is worried about the war between russia and ukraine

The high-end watch industry is worried about the war between russia and ukraine

The Watches & Wonders event returns to Geneva in 2022 with an atmosphere of joy because of the success of the high-end watchmaking industry during the two years of the pandemic, mixed with a little melancholy because of the Russia-Ukraine war.

The high-end watch industry is worried about the war between russia and ukraine

Watches & Wonders is one of the most important trade shows of the luxury watchmaking industry. After two years of organizing online because of the COVID-19 pandemic, in 2022, Watches & Wonders returns with 38 major brands gathered in Geneva, Switzerland. Customers, distributors and brand representatives all shook hands when they had the opportunity to meet in real life. However, here and there, there are still concerns about the Russian-Ukrainian war.

Watches & Wonders 2022 trade fair takes place in parallel on digital and real platforms

The Watches & Wonders 2022 event lasts from March 30 to April 5 this year, bringing together big names like Rolex, Patek Philippe, Cartier, Chopard and Tag Heuer.

Trade fairs targeting the high-end watch segment have long been an important event for Switzerland. The country is famous for its high-end watchmaking industry, with around 57,500 people working in related professions.

After two years of pandemic, the luxury watch industry has become accustomed to introducing new designs online. Therefore, in 2022, in parallel with the establishment of a booth at Watches & Wonders 2022 in Geneva, brands will continue to organize online launches.

For example, Cartier has set up a watch showcase at a time frame suitable for many different countries, so that press reporters and customers can follow through livestream. But the company’s representative also emphasized on seeing the product firsthand. “The physical fairs are still essential to help people feel the real product when worn on their wrist.”

Watchmaking industry thrives in two years of global pandemic

In the past two years, all products in the luxury segment have enjoyed a surge in purchasing power. The same goes for the watchmaking industry. Luxury watches are seen as a product worth investing in, rather than just a pretty piece of jewelry to be worn on the wrist.

In Switzerland, export volume dropped sharply (21.8%) in 2020, then increased sharply (31.2%) in 2021. Revenue from the Swiss watchmaking industry surpassed the limit of 2019 before the pandemic. The epidemic hit, and even beat 2014 – the peak year for luxury watch consumption in the last decade.

2022 is also off to a very good start. Export volume increased 15.7% year-on-year, according to the Federation of the Swiss Watch Industry.

How does the Russia-Ukraine war affect the watchmaking industry?

However, the joyful atmosphere at the Watches & Wonders 2022 fair is still a bit gloomy because of the war situation between Russia and Ukraine.

At first glance, it doesn’t seem like this war has too much of an impact on the high-end watchmaking industry. While some Russian customers had already started flocking to buy luxury products – including watches – before the country was isolated, Russia accounted for just 1.1% of exports from Switzerland last year.

However, the luxury goods industry is non-essential, so it depends a lot on consumer confidence. Consumer confidence index fell once again because of the war between Russia and Ukraine.

In addition, Russia is a supplier of diamonds and essential metals in high-end watchmaking such as gold, platinum, copper, nickel, etc. According to data from OEC, a unit that measures import and export output. In 2020, Russia is the second largest global exporter of platinum, the fourth largest exporter of gold, and the 9th largest exporter of diamonds.

Up to now, the war between Russia and Ukraine has not seen an end. In light of this, many financial analysts have cut their revenue estimates for the luxury watch industry in 2022.

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