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Financial crisis, falling consumer demand and the China Factor  7 Comments

Published Sunday, December 14, 2008 by Harry SK Tan |

 

In the face of global financial crisis watch brands are being hit from all sides. Rising costs, currency fluctuations, falling demand for luxury goods and heightened competition. I posted earlier how the Chinese watch market has moved from being an indirect to direct threat to the Swiss industry where interests there not just make parts for Swiss watchmakers but also bought into major parts suppliers in Switzerland. Even reporters are saying that in the not too distant future, China made watches would become as good as Swiss watches. If anyone doubts that possibility, one only need to see how well the top grade fake watches coming out of China are made today.
If anyone thinks that this is an impossibility, just read this article in the International Herald Tribune. Most brands have learnt that enforcement of their intellectual property rights in China is an uphill task so they resort to using alternative security features. Vacheron Constantin seems to have taken the lead in implementing several complicated methods to slow down counterfeiters. This includes engraving on the crystal as well as special polymer crests that can be viewed only with UV light.
Unfortunately for Vacheron, the IHT reports that the counterfeiters have already managed to make copies of the Quai De l'ile - the watch reputedly made with all the new anti pirate security measures.
How then will the current situation pan out? I suspect with some certainty that some brands from Switzerland (and probably a few Non-Swiss as well) will fold and declare bankruptcy. Also, unfortunately contrary to my hope to see Swiss brands return to their strengths and be 100% Swiss Made, even more brands (at least the lesser brands) will be compelled to bring in Chinese partners or suppliers to keep their operating costs down.
- HT

 

 




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