Deloitte 2025 Report on the Swiss Watch Industry: Traditional Watches in Decline

For the past two years, economic difficulties linked to geopolitical challenges have been widening social disparities. Consumer purchasing power has been impacted, as reflected in the export statistics of the Swiss watch industry. Furthermore, the announcement in August 2025 of 39% tariffs on Swiss watches imported into the United States has caused a chain reaction. Major actors in the watch industry, such as Patek Philippe, have already raised their retail prices in the United States (+15%) to offset the additional costs.

This is a risky strategy, as American purchasing power is showing signs of slowing down: real consumer spending grew by only 1.2% in the first quarter of 2025, compared to 4% in the last quarter of 2024. The report mentions ‘the Deloitte Financial Well-Being Index, which confirms this slowdown in the US economy. The index fell to 98.6 in June 2025, compared with 105.5 in December 2024, confirming a climate of caution and a slowdown in purchases of durable goods.’ Smartwatches, most of which are produced abroad and usually compete in the same price segment as entry-level mechanical watches or Swiss quartz watches, now represent an additional threat to the Swiss watch industry, which is becoming more expensive.

Faced with the contraction of the American market, certain countries are becoming more attractive due to their promising growth. India is one of these, as its watch industry imports grew by nearly 7% between January and August 2025, and by 30% over two years. Mexico, the fifteenth largest market for Swiss watches, is also seeing growth in exports, with median wealth jumping 12.5% in 2024, stimulating demand. Mexican consumers are distinguished by a strong appetite for traditional watches (62% are considering a purchase) and connected watches (69%).

The report also highlights the great caution of the watch industry executives surveyed: while 64% remain confident in the high-end segment (above CHF 50,000), pessimism prevails for the entry-level and mid-range segments, with nearly 60% considering their prospects to be negative. Several factors are behind this sentiment, including geopolitical tensions and customs duties, of course, but also the strong Swiss franc, which is further penalising exports, and the surge in the price of gold (+44.5% over one year).

Watch industry component manufacturers are also under pressure, with Deloitte reporting that 71% of them have reduced their investments and 65% have resorted to partial unemployment. This is a strong warning sign for the future health of the watchmaking industry. At the same time, a majority (70%) are investing in Industry 4.0, i.e. automation or integrated quality control, in order to remain competitive.

For consumers, price is the most decisive factor. Nearly 58% of buyers do not want to spend more than 1,500 Swiss francs on a traditional watch (mechanical or quartz). Only 5% of global consumers say they are willing to invest more than 50,000 francs, with the exception of mainland China (16%) and Hong Kong (18%). At the same time, the second-hand market is booming: 31% plan to buy a second-hand watch, especially among millennials (40%). The main motivation is price, cited by 53% of respondents, compared to 44% in 2021.

However, the report reveals a fundamental shift in consumer choice: only 26% of consumers still wear a traditional watch, compared to 46% in 2020, with smartwatches now being the most popular choice. Despite this, when asked whether they plan to purchase a watch in the coming year, interest in traditional watches remains strong, with 54% considering buying a mechanical or quartz watch, almost as many as for a smartwatch (53%).

Another finding is that consumers continue to favour physical points of sale: more than 60% of customers prefer to buy in-store, with multi-brand stores remaining in the lead (38% compared to 23% for single-brand stores). However, footfall is declining and physical presence is becoming costly, especially in Switzerland, in a context of a strong franc and compressed margins. E-commerce is appealing, but for other reasons: chief among them are the ability to compare prices (51%) and to be able to buy at any time (44%).

Also mentioned is counterfeiting, which remains a scourge for the sector: it represents 1.44 billion for the Swiss watch industry (source: OECD).

In this context, it is essential for the watch industry to continue to innovate in order to remain attractive to customers, which remains a priority for brands at this time, according to the executives surveyed.