In a world where time is money, the watch industry has been facing some challenging times. But amidst this, one brand stands tall and proud - Rolex, the undisputed king of the watch market.
Despite the industry's struggles, with exports down and sales declining for many, Rolex continues to reign supreme. Its sales figures are nothing short of impressive, exceeding CHF 10 billion, and that's just the tip of the iceberg.
The Polarization of the Watch Industry
When we delve deeper into the data, we see a clear polarization. Rolex's sales are equivalent to the combined sales of its top five competitors! This dominance is a testament to the brand's unwavering popularity and market leadership.
But here's where it gets controversial...
The report by Swiss bank Vontobel, a trusted source for industry insights, reveals that the watch industry is becoming increasingly oligopolistic. Almost all the top brands are positioned at the higher end, with only a few, like Tissot and Longines, catering to the lower segment.
And this is the part most people miss...
The report highlights that the top ten brands now account for nearly 70% of export volumes in the premium segment above CHF 500, and this concentration rises above 80% in the segment above CHF 3,000. This dominance by a few players underscores the systemic importance they hold in the watch supply chain.
Over the past few years, only a select few brands have managed to maintain or increase their volumes. These include independent giants like Patek Philippe, Audemars Piguet, and Richard Mille, along with Cartier, which has been riding a wave of strong momentum.
Another interesting revelation is the growing contribution of Rolex's Certified Pre-Owned program to its revenues. Estimated sales of CHF 500 million in 2025 highlight the shift in the market dynamics over the past decade.
But the situation is more complex than it seems. While major brands report higher results, there's a decline in volume in the traditional core segment of luxury Swiss-made watches. Even the high-end segment above CHF 3,000 has seen a decline of over 10% in exports over the past two years.
However, the ultra-luxury segment above CHF 20,000 has seen a substantial increase, with nearly 50,000 additional pieces exported. This shift reinforces the idea that ultra-luxury is gaining ground, while the core range of Swiss watches is facing volume pressure.
In a surprising move, Rolex has trimmed its production for the second year in a row. But this is likely a strategic decision, prioritizing scarcity and pricing power over unit growth.
To gain further insights into the evolution of the luxury watch industry, we will be interviewing Jean-Philippe Bertschy, Head of Swiss Equity Research at Vontobel, in the coming days. We also eagerly await the publication of LuxeConsult/Morgan Stanley's reports for a more comprehensive understanding of this fascinating industry.
So, what do you think? Is Rolex's dominance here to stay, or will other brands challenge its reign? We'd love to hear your thoughts in the comments!
