2025 Watch Market review and 2026 watch market forecast for Hong Kong

 

Global demand for Swiss watches softened in 2025, weighed down by elevated US tariffs, persistent currency headwinds, and the continuing shift toward digital wearables. Export performance is expected to remain under pressure through the first half of the year, with a gradual stabilization more likely in the second half if tariff and macro conditions ease.

 

Recent developments and current state 

On Nov 20, 2025, the Federation of the Swiss Watch Industry reported that October exports fell 4.4% year on year to 2.2 billion Swiss francs (S$3.6 billion), marking the third consecutive monthly decline. Shipments to the United States—the industry’s largest market—slumped 47%, while China recorded a second straight month of growth, hinting at a potential easing in the luxury downturn.

 

A major drag has been the 39% US import tariff on Swiss watches, which took effect on Aug 7, 2025 and sits above the rates applied to the European Union and other advanced economies. The policy has amplified price pressures and disrupted order patterns, contributing to the sector’s weak run into 2026.

 

Structural forces shaping 2026

                                    

Competition from digital wearables and health-focused watches (e.g., Apple) continues to erode entry-level and mid‑range demand, reinforcing a two‑speed market in which high‑end mechanicals remain more resilient than volume segments.

 

The post‑COVID economic moderation has cooled discretionary spending. After the pandemic-era surge, demand normalization and elevated inventories have made for a bumpier recovery in wholesale shipments.

 In 2024 the trend towards high end products accelerated, with watches priced above 50,000 Swiss Francs accounting for 33.5% of the market value and contributing 84% of growth This Suggests consumer are increasing  inclined towards high-end watches rather than entry -level or mid-range products. 

Pricing and currency: a strong Swiss franc and previous rounds of brand price increases have pushed up end prices, pressuring volumes and incentivizing cautious restocking at retail and wholesale levels.

 

Channel dynamics: growth in the pre‑owned market and the need for tighter inventory management are prompting brands to recalibrate launch cadences, discount policies, and regional allocations to maintain margins and sell‑through.

 

2026 outlook and risks

 

Near term: expect subdued year‑on‑year export performance in early 2026, with the US market remaining the single largest source of uncertainty due to tariff persistence, price elasticity, and retailer caution.

 

Downside risks: prolonged tariff measures, further franc appreciation, weaker Chinese demand, and continued wearables penetration.

 

Upside risks: a tariff rollback or exemption, stabilization in China and Europe, and a pickup in global travel retail—each of which could support a second‑half recovery.

 

Sector response: ongoing currency hedging, selective price optimization, and cautious production scheduling remain the core tactics; near‑term guidance is likely to stay conservative until demand and channel signals improve.

 

Note on the rumor about China assembly

 

Claims that many Swiss brands are “made in China with final assembly in Switzerland” are widespread online but are not supported by official trade statistics or brand disclosures. Under current Swiss export rules, a watch may carry a “Swiss made” label only if at least 60% of its manufacturing value is added in Switzerland and the final assembly takes place there; widespread offshoring of final assembly would undermine that designation.

 

As my opinion, those top 3% of luxury watch collectors are not affected. They are still being notified by phone calls from Patel, AP, FP Journe for their watches are ready for collection even though they are bundled sales with some other less “important” watches as part of the deal say for Rolex or AP.

 

Vintage collectors are either holding their top collection items whereby selling their mid low range watches in open market to slim down their collection. Waiting the vintage hype is coming back.

More bigger brands are spending effort to attract younger watch byer of the age group of 30-45.

As these are the majority of big spenders for mid – high end luxury watches.

In general, overall situation will not be as good as 2025 for 2026 unless there are upcoming economy miracle from these big countries:  US, China, EU, Japan…as these are the largest Swiss watch export countries.