What China’s anti-corruption push has done to Swiss watch exports

Dark times for Swiss watchmakers in China.
Dark times for Swiss watchmakers in China.
Image: Reuters/David Gray
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Since late 2012, luxury businesses in China have been hit hard by an anti-corruption crackdown. The campaign, which limits lavish gift-giving and spending amongst government officials, has hurt sales of items such as baiju “firewater,” smoother-drinking cognacscotch whisky, and very expensive watches. In recent years, such items have played an outsized role in corruption within the country. Of course, this has been bad for luxury companies such as Richemont, for which China and Hong Kong account for more than a quarter of sales. Chinese sales are also a key to growth for Italian luxury giant Prada.

chart swiss watch exports to china after anti-corruption campaign

That said, a new research report from Credit Suisse suggests that the worst numbers for Swiss watchmakers may be behind us, with imports to the mainland having bottomed out last spring. Meanwhile, luxury sales are seeing better growth in Europe, boosted, in part, by increased spending by a wave of Chinese tourists.