Since August 11th, when the People’s Bank of China sharply reduced the central parity rate of the renminbi and the yuan’s depreciation against the US dollar hit a historical record, the stock prices of the three major watchmaking groups in Europe, LVMH, Richemont and Swatch, have plummeted by more than 10% until Only on the 25th showed signs of recovery.
Shares of LVMH, Richemont and Swatch Group plunge (Image: Bloomberg)
The slowdown of China’s economic growth has caused the global market to slump. The total market value of world-class large companies has lost trillions of dollars. A well-known newspaper has specifically named it ‘Great Fall of China’.
On August 24, global stock markets volatile. Prior to this, the shareholders of LVMH, Richemont and Swatch Group had been selling their shares, due to the sluggish performance of Swiss watches in the Chinese mainland market.
According to data from the Swiss Watch Association last week, Swiss watch exports to the Chinese market in July plummeted 40% compared to the same period last year, and exports to the Hong Kong market fell 29% year-on-year. It was up 49% (compared to the same period in 2013).
‘At first glance, Swiss watch exports to the Chinese market may seem shocking, but they have fallen considerably compared to last year’s extremely high standards,’ said Rene Weber, an analyst at Bank Vontobel AG in Zurich. Mainland tourists are increasingly going to Europe to buy Swiss watches, which is also a manifestation of the advantages of European tourism. ‘
In July of this year, the import volume of French and Swiss watches was 1.53 Swiss francs, an increase of 53.4%! After Hong Kong and the United States, it has become the third largest Swiss watch import market in the world. China’s Swiss watch imports amounted to 102.1 million Swiss francs in eighth place, followed by the United Kingdom with 907.3 million Swiss francs (a year-on-year decrease of 5.7%).
In July 2015, Swiss watch global exports amounted to 1.9 billion Swiss francs, a decrease of 9.3% compared to the same period last year.