Luxury Swiss 'Watches' India Potential The Indian watch market is burgeoning with luxury watches, reports Deloitte's 2024 Swiss Watch Industry Insights
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The Swiss watch industry, renowned for its precision and luxury, is setting its sights on a new, promising frontier of India. As detailed in Deloitte's 2024 Swiss Watch Industry Insights, India presents a burgeoning market ripe with opportunities for Swiss watchmakers. India's economy is on a robust growth trajectory, with a projected growth rate exceeding six per cent for 2024 and 2025. This rapid economic expansion is fostering an expanding middle class with increasing disposable income. As a result, there is a rising demand for aspirational products, including luxury watches. Swiss-made watches, celebrated for their quality and status, are particularly well-positioned to capitalise on this growing market.
The luxury market boom
India's luxury market is not only growing but also diversifying. As Deloitte's report highlights, Indian consumers' appreciation for luxury items, such as Swiss watches, is deepening. These timepieces are not merely status symbols but also cherished gifts during festive seasons and significant life events like weddings. As the Deloitte Swiss Watch Industry Study 2023 showed, Indian consumers are very brand conscious, considering brand image to be the most important factor (64 per cent) when deciding to buy a luxury watch. By comparison, the average global consumer believes the price to value ratio to be the most important (42 per cent). This cultural inclination towards gifting and personal indulgence is driving demand for high-quality watches.
A landmark trade agreement between Switzerland and India promises to enhance market access for Swiss watches by reducing custom duties over the next seven years. While regulatory complexities persist, including India's tax structure and foreign investment regulations, the overall ease of doing business is improving. For Swiss brands, this represents an attractive investment opportunity, provided they navigate the regulatory landscape with well-structured, long-term strategies.
"Since 2014 India has been identified as a growth market for Maurice Lacroix and we entered early. We are thrilled about the growing interest of Indian consumers for Swiss watches," said Stéphane Waser, managing director, Maurice Lacroix.
India's luxury goods market is on a meteoric rise. Currently valued at $7 billion, it's poised to jump to $30 billion by 2030, according to Deloitte's predictions. But what's driving this growth? For starters, a significant chunk of consumers - around 60 per cent - are indulging in luxury goods every year, with nearly 30 per cent spending over $1,440. And it's the younger crowd, Gen Z and millennials, who are leading the charge. The luxury market is no longer confined to major cities like Delhi, Mumbai, and Bangalore. Thanks to the internet and social media, consumers in tier 2 and 3 markets are now aspiring to luxury and shopping online.
India's burgeoning watch industry is also stimulating growth in the certified pre-owned market. Over 50 per cent of surveyed consumers in India are likely to purchase pre-owned watches, driven by factors like cost savings and sustainability. This trend mirrors the development seen in other markets, suggesting a significant growth opportunity for Swiss brands in the pre-owned segment.
"We observe a shift in consumer spending from jewellery to watchmaking. Watches are more frequently wearable and increasingly valued as investment," stated Pratiek Kapoor, head of operations & communication, Kapoor Watch Company.
Market boost
The report suggests 70 per cent of Indian consumers purchase watches online, either through a multi-brand online platform or virtual marketplace, or directly from a brand's website. In the US, that percentage is 38 per cent, 54 per cent in Germany, 46 per cent in China, 34 per cent in Switzerland, and 24 per cent in Japan. However, the point to be noted for the reason for the preference of online marketplace is also that the physical retail network for watches is not yet fully developed.
After 16 years of negotiations, Switzerland, along with its European Free Trade Association (EFTA) partners Iceland, Liechtenstein, and Norway, successfully signed a Trade and Economic Partnership Agreement (TEPA) with India in March 2024. According to the report, a key aspect of this agreement is the enhanced market access it provides for nearly 95 per cent of industrial goods exported from Switzerland to India. In some instances, the agreement will eliminate customs duties entirely after a phased tariff reduction period of up to 10 years.
Recent trade data suggests that this could save Swiss companies up to CHF 166 million (approximately $185 million) annually in customs duties, as estimated by the State Secretariat of Economic Affairs (SECO). In exchange, Switzerland and the other EFTA states have pledged to invest $100 billion in India over the next 15 years, with the goal of creating one million jobs in India during this period.
"The TEPA is more than a classic free-trade agreement; it is a comprehensive and forward-looking partnership that will durably impact the Swiss-Indian relations," said Jean-Baptiste Délèze, head of economic affairs, Embassy of Switzerland to India and Bhutan.
