Chinesepod - Swiss luxury watch sales up

BIZCHINA / Biz Life

Swiss luxury watch sales up

By Li Wenfang (China Daily)
Updated: 2006-11-28 16:07

GUANGZHOU: Watch exports from Switzerland to China are expected to grow
10 to 20 per cent in the next five years, said Beat Burgi, counselor of
the Embassy of Switzerland in China and managing director of the Swiss
Business Hub China.

An employee displays a Swiss wristwatch priced at 2.62 million yuan
(US$331,645) in Beijing's Xidan Department Store. [China Daily]

"If the economic situation in China remains as it is right now ... the
number of Chinese people who can afford this kind of product will grow
steadily," he told China Daily yesterday at the opening of the Guangzhou
office of the Swiss Business Hub.

Burgi said exports to China skyrocketed 69.9 per cent from 2002 to 2005.
Exports to the mainland grew 10.07 per cent year-on-year in the first 10
months of this year.

Since China's accession to the World Trade Organization, "it's easier to
sell luxury goods in China. The market has opened up," Burgi said.

Swiss exports to the Chinese mainland earned 311 million Swiss francs
(US$257 million) last year. They brought in 1.6 billion Swiss francs
(US$1.3 billion) from exports to Hong Kong, many of which were
re-exported to the mainland.

China levied a 20 per cent sales tax on luxury watches in April. Burgi
said the tax did not have a great impact on sales.

"Somebody who is prepared to pay US$2,000 or US$3,000 or more for a watch
does not care if it is 10 per cent more expensive," he said.

Although Swiss watches have a good reputation around the world, they are
not immune from Chinese competitors.

"Chinese products are getting better and better and are becoming more
competitive with Swiss products," Burgi said.

New or lower-tier Swiss brands have had trouble on the Chinese market, he
said.

Meanwhile, imports of watch products and parts from China to Switzerland
have also grown, Burgi said.

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