|The Swiss watch industry
Switzerland has long been associated with high-quality watchmaking. Watches are the country's third biggest export after the chemical and engineering industries in terms of value.
About 95% of Switzerland's watch production is exported, and in terms of value it is the world's biggest watch exporter: Swiss watch exports earned about nine billion dollars in 2004. This reflects the fact that expensive luxury watches represent a large proportion of Swiss production in comparison with other major exporting countries. Not surprisingly, in terms of the number of watches exported, Switzerland (25 million in 2004) lags far behind China, with one billion, or even Hong Kong, with 700 million.
The average factory price of a Chinese watch is one dollar, while in Hong Kong it is five dollars. Switzerland stands at the other extreme, with an average of 329 dollars, the highest in the world.
The market for Swiss watches is concentrated in three continents. Not surprisingly, the biggest single customer is the US, which took nearly 17% of the 2004 exports. It was followed by Hong Kong, with nearly 16%. (Hong Kong is a major hub: many of its imports are re-exported.) Mainland China is still only a relatively modest customer, but in 2004 sales there were up more than 40% on the 2003 figure.
Italy and France are the leading customers in Europe.
In 2004 the 15 top purchasing countries accounted for more than 82% of Swiss watch exports.
Switzerland owes it success not only to the high-quality of its output, but also to the wide range of the watches it produces, in terms of both technology and appearance. Nearly 90% of the watches made in Switzerland are electronic, but mechanical watches, the remaining 10%, account for over half the exports in terms of value. Some of the watches at the upper price range are among the most complex in the world.
As for appearance, this ranges from sober classic, through diamond-studded, to cheap and cheerful.
As with other Swiss products (such as chocolate), Switzerland jealously protects the "Swiss made" label, and has signed bilateral and international agreements to enable it to take legal action against counterfeiters.
To obtain the label a watch must meet certain minimum conditions. Although some foreign-made components may be used, they may not account for more than 50% of the total value of the components and the watches must also be both assembled and inspected in Switzerland.
A watch that has been manufactured abroad but contains Swiss components is permitted indicate this fact, but it is strictly forbidden to exaggerate the degree of Swiss involvement. A watch may also be allowed to carry the word Geneva if it conforms to the demands made for a Swiss watch and if at least one of the major operations in its manufacture was carried out in the canton of Geneva.
More prestigious than this is the award of the quality hallmark known as the "poinçon de Genève" or Geneva Seal, issued by the Office for Optional Inspection of Geneva Watches. They must have been made in the canton, and each movement must be numbered. There 12 strict criteria to be met ensuring the highest standards in engineering, finishing and assembly.
Switzerland holds two major international exhibitions every spring where its watch-making skills are on display.
The World Watch and Jewellery Show in Basel attracted some 90,000 visitors to its 33rd edition in 2005, which took place over 8 days. Swiss brands dominate the exhibits; most of what is produced in Switzerland is on show at the fair.
Geneva hosts a more exclusive affair, the Salon International de la Haute Horlogerie (SIHH), or International Salon for Prestige Watchmaking, to which only professional guests of the exhibiting brands are invited. Despite the relatively small number of visitors – 11,500 in 2005 – the show is regarded as one of the major events of the Geneva year, second only to the Motor Show. Customers are shown the latest innovations in top-of-the-range watches, as well as limited edition and unique timepieces.
In addition to the fairs held in Switzerland, in 2003 the Federation of the Swiss Watch Industry launched a travelling exhibition, under the title "Think Time, Think Swiss Excellence." It is designed to be shown at such events as trade fairs, conventions and seminars, to give visitors a better awareness of the range of the watchmaking industry. The first venue was St Petersburg. This was followed by Brussels, Bangkok and Mumbai.