41. time-business


One billion watches produced in China

FAR EAST TRAVEL JOURNAL

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February 2018


One billion watches produced in China

My interlocutor is the honourable Mr Shunhua Zhu (朱 舜华), co-founder of the Shenzhen Watch & Clock Fair and a member of the Horologe Association since 1988.

Europa Star: Who are the largest producers in terms of volume?

Shunhua Zhu: It’s difficult to say, because the companies that produce the most are OEM producers, sometimes exporting up to 10 million watches at 2 or 3 dollars each for the African or South American market.

So it’s true to state that the giants of the Chinese watch industry are OEM producers?

The very large majority.

Can you class the brands in terms of volume?

Fiyta, Rossini and Tian Wan produce just over one million items a year. Sea-Gull and Ebohr produced 800,000 watches, Starking, Geya and Poscher 600,000 watches each. As for the Beijing Watch Factory (see interview on page 30), which targets the medium to high end, it posts higher turnover than those brands, even though it only sells around 100,000 watches.

Hong Kong exported 241 million watches in 2016, again according to the Federation of the Swiss Watch Industry. Admit it – they’re actually made in China, aren’t they?

Yes, 99.9% of them! They are even assembled in China. That’s because all the Hong Kong brands have relocated to mainland China. Only the brand headquarters have remained in Hong Kong.

So if you add 241 million watches from Hong Kong and the 652 million exported watches, and to that add the Chinese domestic market, how many watches did China produce altogether in 2016?

One billion watches!

Impressive! But while we’re on the subject, the ‘Swissness’ law states that to be ‘Swiss made’ at least 60% of the value of a watch has to be Swiss; so what are the criteria for the ‘made in China’ and ‘made in Hong Kong’ labels?

In China, it’s very simple: if a watch is assembled in the country, it is ‘made in China’. In Hong Kong, the movement determines the nationality of a watch. If it contains a Japanese movement, it’s made in Japan; if it has a Chinese movement, it’s made in China.

Let’s come back to the Chinese brands, in particular the high-end segment which posted growth of 10.9% last year! With announced profits of 46 million yuan (6.6 million Swiss francs), volumes are apparently low…

I can’t give you a ranking there because there are several brands (Beijing, Sea-Gull, Ebohr) producing very small volumes at the high end of the market. Those watches are tourbillon or art watches that help them create a brand image.