Examining the dynamics of Swiss watchmaking in the light of the Top 20 Swiss Watch Brands report by Morgan Stanley.
NOTE: The source of the data that used in this article is “Morgan Stanley Research”. The source of the tables is also Morgan Stanley.
Morgan Stanley’s top 20 Swiss watch brand rankings for 2021 have been released this month, and the data shows that the Swedish watch industry closed 2021 with the highest export numbers of all time. The annual Swiss export numbers, recently released by the Swiss Watch Industry Federation (FH), reached CHF 22.3 billion, and CHF 21.2 billion comes from only sales of wristwatches. Reports published by the Swiss Watch Industry Federation and the American investment company Morgan Stanley show that Swiss watch exports are 31.2% higher than in 2022 and 2.7% higher than in 2019, which brings us that the sales in the watch industry return pre-Covid days.
The Big Three: Rolex, Omega ve Cartier
As seen in Morgan Stanley’s ranking, Rolex has been at the top of the list since 2017. Rolex’s market share is 28.8% this year. Last year, the brand’s market share was 24.9%, which shows that the brand’s share has increased by about 4 percent this year. Besides, this share becomes bigger when the brand’s entry-lever Tudor’s sales is considered. In this case, it can be said that Rolex makes almost third of the market share of Swiss watchmaking industry.
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A surprising aspect of the data is that Omega, which has been in second place since 2017, has dropped one place and left its place to Cartier watches. Despite Omega’s larger market share, the Richemont Group brand Cartier watches took number two position this year. So, Rolex is at the of top list with 28.8 % share, Cartier is at the second position with 6.9 % share and Omega took number three with 7.5 % share. Rolex in the first position has an estimated turnover of CHF 8 billion, Cartier is in the second place with CHF 2.39 billion and Omega in third with CHF 2.2 billion. An important piece is that Rolex had the best year in its history with these numbers, and also a remarkable return after estimated 20% drop in production in 2020 due to the pandemic. On the other hand, Omega raised 1.3% of market share from 2020 to 2021, whilst Cartier raised 0.2%. Although there are surprising position changes in the rankings, Rolex, Omega and Cartier watches have remained their place at the top three. The ranking data shows that these three brands make up 43.2 percent of Swiss watchmaking.
I need to open a parenthesis for Rolex because the brand has a market power that spreads almost equally across world besides Swiss watchmaking. Its market share is about 40% in the USA for Swiss watches, and about 35% in the UK. Indeed, there is not another luxury brand has such an influential position in national markets.
A summary of Morgan Stanley Research
Between 2017-2019, Longines was fourth position at the list, and Patek Philippe was fifth, while the position changed 2020 and Patek Philippe switch to fourth position. And surprisingly, the owner of the fourth place is not one of these tow brands this year. Positioned at sixth place of the list last year, Audemars Piguet moved up two places to the fourth place in the 2021 ranking (In this point, another parenthesis is needed to remind that Audemars Piguet released its iconic Royal Oak last year). However, its market share decreased, while the sales revenue is increasing. Audemars Piguet’s market share dropped to 4.2% from 4.3% this year. Although Patek Philippe dropped two places in terms of sales turnover, it increased its market share volume. Its market share increased to 5.8% from 4.8%. More than half of Swiss watchmaking’s income comes from the brands Rolex, Omega, Cartier, Audemars Piguet and Longines. Their total market share is around 53 percent.
Independent watch brands like like F.P Journe, Greubel Forsey, Voutilainen, MB&F and Laurent Ferrier were also including the brands that demanded this year. These brands made a splash both in primary market and in the second-hand sales. The market share of these brands is about 1%, which shows that even though they are demanded, these brands are still a little bit marginal in the industry.
There is no doubt that second-hand sales were another subject of Swiss watchmaking, and even we also wrote an article about second-hand sales in the issue of Saatolog 2021-22. According to the data, the second-hand market was around CHF 20 billion. Especially, the re-sale of rare and popular watches like the Rolex Daytona, Patek Philippe Nautilus and Audemars Piguet Royal Oaks has increased the dynamics in this market.
And another data worth mentioning came from smart watches, which have now become a dynamic of the industry. According to source, 80 million smartwatches were sold last year, whilst the number of Swiss watches sold was 16 million. And 50% of the 18 million sales consists of Apple watches. According to the news of SJX Watches, Apple watch sold 22 million smart watches in 2016, while Swiss watchmaking 25 million watches.
Altogether, this huge watch industry consists of about 350 brands, yet we see the names of 25 brands in about 90 percent of the market share. The data is released by Morgan Stanley shows that the Swiss watchmaking industry has returned to pre-Covid days, while providing information about the dynamics of the system with estimated sales numbers.