An intense struggle.

The watchmaking industry has known lots of deep changes since 1980, which can be, sum up in 3 points. First of all, the production was rationalized, especially in Switzerland. As the luxury industry, the watchmaking industry was globalized, and democratized.
Nowadays, lot of brands make part of what Silverstein and Fisk call “New Luxury”, that is to say products with high price, but accessible for numerous persons.

At the bottom of the pyramid, a brand as Swatch embodies the new importance of marketing in the industry.

In spite of a deep crisis, at the beginning of the years 1980, horology is re-become nowadays synonymous of Switzerland. In fact, due to the Swatch Group, which owns many brands as Omega, Swatch, Breguet, Tissot, Switzerland exported in 2012, for 21,4 billon of Swiss francs, materialized in 94% by watches, for a medium price around 693 francs.

Nicolas Hayek – Founders of the Swatch Group.


The Japanese are still a threat.

The Japanese were particularly efficient in 1975-1985. They strongly believed in electronic watches, and it was a success for them. In fact, around 1980, they dominated the Swiss horologists, who didn’t want to produce electronic watches.  But due to a good repositioning in luxury segment, the Swiss are re-dominating the Japanese.

 But, as watchmakers, the Japanese are still good competitors, because of their knowledge to produce mechanisms, and electronic watches.

Electronic watch, made by Seiko, a major Japanese watchmaker brand.


Who buys watches?

The main customers for the horology are: Hong-Kong, the United-States, China, France and Japan. In 2012, these countries imported between 10 billon of dollars of watches (Hong-Kong) and 2 billon (Japan).

But, and this is a turning point, these countries are also exporters of watches. For example, Honk-Kong is a major hub to sell watches, which come from all over the world.

 
One of the rare Swiss brand, independent of the Swatch Group, Rolex sells lot of watches in Hong-Kong.


Who really create and produce watches?

Exporters don’t mean automatically watchmakers. In reality, it exists few brands that create, produce and sell the product finished. Why?

To build a watch with a complex mechanism implies to know how to do it, to invest a lot in research and development. Lot of brands didn’t want to do this, choosing to buy mechanisms from the Swatch Group or Japanese companies.

 
Mechanism ETA 2892 (Swatch Group).

Considering the two brands, that we are studying, Swatch and Ice Swatch, Swatch designs and produces entirely the mechanisms and the watches in Switzerland, when Ice Watch buys the mechanisms in Japan and produces the watches in China.

 JVS.


References
  • Pierre-Yves Donzé, Histoire du Swatch Group, Presses Universitaires Suisses, 2012

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