The Watch Industry's Power Dynamics: Rolex Reigns Supreme, But for How Long?
The Swiss watch industry is facing a challenging period, but one brand continues to dominate: Rolex. Despite a 2% decline in Swiss watch exports and a challenging economic climate, Rolex remains the undisputed king, with sales surpassing CHF 10 billion. This is according to the latest report from Vontobel, a trusted source in the industry, which offers a fascinating insight into the current state of play.
But here's the intriguing part: Rolex's success is not just about its impressive sales figures. The report reveals a deeper trend of industry polarization, where Rolex's sales are equivalent to the combined sales of its next five competitors. This indicates a growing oligopoly, as Vontobel notes, with a few dominant players controlling a significant portion of the market.
The top 10 watch brands in 2025, as estimated by Vontobel, showcase this dynamic. While most brands are positioned in the higher-end segment, Tissot and Longines cater to the lower end. The report highlights that the premium segment above CHF 500 is dominated by these top brands, with a concentration of over 80% in the segment above CHF 3,000. This has significant implications for the industry's supply chain.
And this is where it gets controversial. While major brands like Patek Philippe, Audemars Piguet, Richard Mille, and Cartier thrive, the traditional core segment of luxury Swiss-made watches (export price above CHF 3,000) is experiencing a volume decline. Vontobel's analysis reveals a shift towards the ultra-luxury segment (above CHF 20,000), which has grown significantly, while the core range of Swiss watches struggles.
Rolex's strategy is also intriguing. Despite trimming production for the second year, they prioritize scarcity and pricing power, ensuring their brand remains exclusive. This move might be a strategic decision to maintain their market position, but it also raises questions about the industry's future.
As we await further insights from LuxeConsult and Morgan Stanley's reports, one thing is clear: the watch industry is undergoing a transformation. Rolex's dominance is undeniable, but will it last? And what does this mean for the industry's overall health and accessibility? Stay tuned for our upcoming interview with Jean-Philippe Bertschy, where we'll delve deeper into these fascinating developments.
