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Baselworld: Restructuring in a recovering market

Recently, the swiss watch industry has been caught in a storm of unstable demand and even one of the world’s leading trade shows couldn’t deny it. MARTIN FOSTER reports.

Now in its 101st year, the annual Baselworld trade show is still the heart of the Swiss watchmaking industry, setting the pace and showcasing major global brands. The show provides the only opportunity to see the finest Swiss production, side-by-side with equal quality and volume production from Europe, China and the rest of the world.

This year however, the rapidly changing market caught the industry off balance. The wholesale pipeline was full, retailers were fully committed and all production and sales targets were in turmoil.

"The annual event would remain a 'must' for the Swiss watch industry."
Jean-Frédéric Dufour, CEO of Rolex

This was reflected at the opening press conference in Basel, a day before the show opened to the public on 22 March. Baselworld managing director Sylvie Ritter said the watch industry is in a period of “change and unprecedented concentration”, in which the biggest players are getting stronger, and smaller brands are being challenged.

Indeed, Forbes magazine reported recently that Rolex was voted the world’s most trusted company of 2018. The findings were based on a survey conducted by analytics firm Statistica, who looked at the performance, leadership, products, services and innovation from a range of companies.

It was smaller players who deserted Baselworld this year, and it came as no surprise that most of them were from the medium to low price sectors. All were challenged by Apple and other smartwatches in the area of price point and function. Their profit margins have been severely impacted, following an invasion of sheer market volume similar to the introduction of quartz technologies in the 1970s.

However, François Thiébaud, president of the Swiss Exhibitors’ Committee, presented an alternative view. He attributed the Swiss watch industry’s recent difficulties not to competition from smartwatches or lack of relevancy to younger buyers, but to the Swiss National Bank’s decision in January 2015 to abolish its cap on the Swiss franc. Swatch Group CEO Nick Hayek agreed with the sentiment, calling the bank’s move a ‘tsunami’ for Swiss exporters – although the Swiss franc has since declined in value, giving some relief to exporters.

Whatever the cause, the number of exhibitors at the 2018 show was down by half, from 1,300 to about 650.

When profit margins are squeezed, the cost/benefit ratio of exhibiting may no longer stack up. On the back of diminished returns, many smaller brands felt unable to justify the relentlessly high cost of exhibiting at Baselworld – and the show has done little to ease the cost burden.

A year or two ago, the 300-plus exhibitors in the tools hall left Baselworld en masse, and they now mostly exhibit at precision tools exhibition EPHJ-EPMT-SMT in Geneva. Held annually in June, buyers are focused by the promotion of a single purpose exhibition, and the up-front exhibitor costs are less. Exhibitor interviews at Baselworld suggest the show administration has neglected to sufficiently promote specialties, and the huge loss of the tools exhibitors may well be symptomatic.

But despite the dark times, Baselworld still had its positive side. The reduced number of exhibitors produced a tighter and more manageable show, and opened amidst an upswing in Swiss watch exports after two negative years.

In addition, all the major luxury watch brands were still present this year, and had already committed to next year’s trade show. There is hope in the industry that conditions may stabilise over the next year.

Jean-Frédéric Dufour, CEO of Rolex said the annual event would remain a “must” for the Swiss watch industry. ”Its evolution and its dynamism was proven by the strong participation and the avid enthusiasm,” he added. “We are looking forward to Baselworld 2019.”

Thierry Stern, president of Patek Philippe agreed. “We are very satisfied with the positive feedback that our new products for 2018 received from our partners in the specialised trade and from the press,” Stern noted.

Major watch houses continue to set the agenda, being the technical and cultural industry leaders. Durable technical developments emerge from the long-term strength of these brands; nevertheless this may not be enough to hold the current market position. In a world beset by unstable politics, corruption and mistrust, the coming years may cause middle to upper class consumers to bypass luxury timepieces.

As René Kamm, CEO of MCH Group noted, “Today, nothing is certain. We will try to keep this industry event in Basel, but I cannot provide guarantees.”

Kamm said Baselworld would go ahead next year – but nobody knows what will happen in 2020.

Baselworld will re-open its doors on 21 March 2019.

What models are expected to be
popular locally this year?

“The La Garconne will be very popular in the Australian market as it has been in Europe. The soft square shape is a feminine look with an edgy twist and this is a look we haven’t seen in the fashion watch market. The La Triomphe will also be popular, as it provides an elegant and classic look whilst incorporating the two-tone trend; it sold out very quickly when it first arrived in Australia and is due to be restocked this month.”
                                     - Simon Garber, Heart and Grace

“The Ice-Sunset design, which is based on a combination of features from several of our best selling collections, features numbered dials that have been super successful since launching last year. As a local partner of Ice-Watch, it has been great to be able to use Australian talent for the campaign, as it will be used as the primary campaign imagery when it’s globally launched.”
- Larry Porter, Ice Australasia

“We are introducing more crystal set watches as we believe these will be favoured. I believe the recent popularity of very simple, plain and slim watches has started to slow down with people wanting more decorative watches again. Model 5919 has a very special type of mesh band rarely seen in our market with a very smooth and shiny surface.”
- Jeanette Sceats, Instyle Watches

“Our extensive range of diver watches that are part of our Prospex collection. Models will be offered in both ‘automatic’ and ‘quartz’ calibres that cater for the professional or recreational diver, or for someone who just likes the traditional rugged sports case. The ‘blue whale’ – a textured pattern combined with vivid blue – inspired the dial design concept of three of the watches in the collection.”
- Stuart Smith, Seiko

“Jowissa’s Roma Colori collection, as it provides simple designs with numerals printed on the underside of the glass, giving the appearance of a bezel. Its bright colourful straps also add to the appeal.”
- Hans Marti, Swisstime

“The new Red Bull Holden Racing Team Special Edition model. Showcasing the Red Bull Holden Racing Team logo and the 2018 team colours, it’s powered by the impressive Miyota 6S21 chronograph movement and sports a luxurious, sapphire coated crystal with anti-reflective coating.”
- Phil Edwards, Duraflex Group Australia





Pierre Cardin


TW Steel & Sekonda


Mondaine & Jowissa
The ‘Essence’J2.032.M






Martin Foster

Martin Foster is a freelance journalist and Jeweller’s resident watch ‘guru’. Based in Sydney, Martin attends major international exhibitions covering the watch and timepieces categories.

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