Should Swiss watchmakers join forces to stay globally competitive?

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The aisles of Baselworld have been deserted by many watchmakers, who consider the concept of the event to be outdated (© Keystone / Georgios Kefalas)

As Baselworld continues to face difficulties, the Swiss watch-making industry needs a new platform to showcase its know-how. With watchmakers going it alone with separate initiatives, one industry expert is pushing for a more collaborative effort to keep the industry thriving.

Up until recently, early springtime for watchmakers in Switzerland meant participating in a simple ritual: travelling to the banks of the Rhine for the annual industry fair known as Baselworldexternal link. It was a key date in the calendar, an occasion for watchmakers not only to negotiate a good chunk of their yearly orders, but also to showcase their creativity and richness under the label “Swiss-made”.

But today this model is considered outdated. In the past two years alone, Baselworld has lost more than half its exhibitors and visitors. Swatch Group, the largest watchmaking brand in the world, unexpectedly left the Basel event in summer 2018 and has since shown no interest in returning.

More recently the French conglomerate LVMH has threatened to turn its back on Basel starting in 2021. Its four watchmaking brands – Tag Heuer, Hublot, Zenith and Bulgari – chose to organise their own event in Dubai in January, pointing to lower costs and a more favourable date for presenting their new collections.

Beyond a battle of egos

In a similar vein, Audemars Piguet has announced it will no longer take part in the Salon International de la Haute Horlogerie (SIHH) in Geneva, now known as Watches & Wonders Genevaexternal link, the Baselworld of luxury watchmakers. The independent firm, which had a turnover in excess of CHF1.2 billion ($1.23 billion) in 2019, is betting on smaller regional events to get closer to consumers in Hong Kong or New York.

“The brands now want to talk directly to their customers rather than with the middlemen, and that’s an irreversible trend the watchmaking fairs didn’t see coming far enough in advance,” says Olivier Müller, an expert on watchmaking at LuxeConsult.

Despite the shortcomings – exorbitant fees, “bunkerised” stands that are inaccessible to the average visitor, overbidding – that led to its decline, Baselworld was one of the few venues that was able to bring together players from an industry famous for its rivalries and egos.

“We desperately need an organisation that will pick up the baton and value the whole of the industry,” says Müller. “Swiss watchmakers would have every reason to collaborate instead of acting in an uncoordinated fashion.”

Preliminary talks with the Federation of the Swiss Watch Industryexternal link and some personalities in the industry have already taken place to explore just such a project.

If no private entity is interested in taking the idea forward, Müller says he’s ready to approach the federal authorities.

Presence Switzerland

“This new entity would act as a facilitator,” he explains. “For example, it could organise events at Swiss embassies or create a kind of travelling circus for the Swiss watch industry in different parts of the globe.”

Presence Switzerland, the foreign ministry unit responsible for promoting Switzerland’s image abroad, may be well placed to take on this mission.

Its director, Nicolas Bideau, has in recent years focused on selling Switzerland as a hotbed of technology and cool.

But “beyond drones, artificial intelligence and medtech, let’s not lose sight of the fact that watchmaking is the country’s third-biggest export sector and employs close to 60,000 people in Switzerland,” says Müller.

Options for collaboration

For his part, Bideau has a favourable view of the concept.

“We are always open to collaboration,” he tells swissinfo.ch. “So far we haven’t been approached by the industry associations about it. But if that were to happen, we would happily discuss which aspect of our mandate to promote Switzerland’s image abroad as defined by the law could be applied to this mission, and which other actors would need to be involved, especially in terms of support for exports.”

What shape this sort of collaboration could take would still need to be discussed.

“In any case, watchmaking is one of the engines of Switzerland’s image that we can rely on, even if the competition, especially in the smart watch department, has clearly changed the situation in certain segments,” he says.

Nevertheless, Bideau cautions against exaggerating any difficulties the country’s watch fairs may be facing and their impact on the global promotion of timepieces that carry the “Swiss Made” label.

“In recent years, different sales models have emerged,” he says. “So it’s only natural that the big events would face challenges, but that doesn’t say anything about their future. The most important numbers are the sales numbers, not the level of participation in fairs. And the results in the watch industry are more than decent.”