Any snapshot of the watch industry will inevitably reveal something about the ebb and flow of markets. These tiny objects made to tell time – and a lot more, if we include the wearables – are also like a thermometer able to tell how people feel about the current state of the economy.

2025 Hong Kong Watch & Clock Fair

The Hong Kong Watch & Clock Fair (HKCWF), which ran 3-6 September, can be quite a tempestuous event. On the one hand, you can get into the nitty-gritty of this fabulous industry, which is continuously trying to renew itself in the face of rocky markets and a sea change in societal attitudes.

The vast halls of the Hong Kong Convention Centre, which overlooks Victoria Harbour, are filled with booths that produce not only the final product, timepieces, many mechanical, but also the myriad components that go into making them, from hands and cases, to gearwheels and the movements themselves.

Wandering these spaces is a pilgrimage into the heart of ancient mechanical art relying on tiny tools and even smaller components to construct a movement that keeps time with impeccable, self-sufficient precision.

This is engineering that operates independently of the modern world, without need for a network or a power source. The mechanics are often enigmatic, even to those who benefit from them daily. It begs the question that many watch brands these days are asking themselves: How can one attract the digital native, how can one appeal to a younger generation of consumers that will some day become a fan of higher-end products?

One way is by developing resilience and surprising people by continuously evolving in terms of functionality, technology, and design. In many ways, the industry has never been more vibrant than it is today. Thousands of watchmakers around the world use their tiny tools to file, drill, and screw with endless patience, creating ever new marvels. For this they take their time. Days, weeks, sometimes months on end. But they don’t stand still. They develop new ideas, search for the unique, and want to create works of art.

Smart watches at the 2025 Hong Kong Watch & Clock Fair

As for the many quartz or connected watches, they may well be the “gateway drug” to better, more luxurious timepieces. This, at least was the what one retailer, who preferred to remain anonymous, told me after the brand-meet breakfast: “Until now I never thought of getting into wearable technology. But with the perspective they gave us today I think there is a need, especially for the aging sector.” He did not think they were a threat to analogs, however. “People will always have a need for luxury watches,” he stated confidently, “while wearables are more a practical thing.

Navigating global uncertainty

The globalised world is very complex, of course, and sometimes one would really welcome the application of the horological principle of ensuring a working model before adding well tested innovations. If applied elsewhere, say, in politics, such a principle could prove beneficial. However, the reality for the global watch industry is that it must navigate a sea rendered choppy by significant economic and geopolitical challenges, a theme that was vigorously debated among participants at the fair’s International Watch Forum.

In his opening address, Mr. Kan Lam, Chairman of The Federation of Hong Kong Watch Trades & Industries Ltd., suggested a clear imperative: to leverage knowledge to then focus on finding the right markets and developing agile, resilient strategies to meet the volatile global economy head on.

This volatility was further quantified by speakers from key markets including Hong Kong, France, Germany, Japan, Korea, and Switzerland. Interestingly, all seemed to face the same issues, notably the fluctuating and seemingly haphazard tariff rates, evolving global supply chain dynamics, and rising operational costs. By the same token, each market is facing its own specific pressures.

In Hong Kong, a robust industry hub, 37.7% of enterprises were reporting losses. The Korean market, which appeared fairly strong in past years, was also experiencing a serious contraction in the mid-to-low-priced analogue watch segment. Swiss exports, the industry’s bellwether, also saw declining sales—in some cases in the double digits in key countries.

There were positivie indicators as well, like France, which registered 2% growth in the first half of 2025. But this was attributed to advance purchases ahead of threatened tariffs, rather than organic consumer demand.

Similarly, in Germany, Dr. Guido Grohmann of the German Association of Jewellery, Watches, Silverware, and Related Industries reported underlying structural anxieties in spite of the fact that imports of watches, clocks, and components have remained significantly above pre-pandemic levels. He noted that pervasive market uncertainties are creating planning difficulties not only for retailers but for the entire supply chain

The magic word: resilience

There is nothing like such slightly gloomy reports to trigger a fighting spirit. The follow-up session was indeed lively and focused on two crucial questions: How can watch supply chains be shored up and what strategies do brands have in place to diversify the sourcing of critical elements?

Manufacturers are demonstrating remarkable adaptability, with successful pivots to Chinese markets, noted Richard Leung, President of The Federation of Hong Kong Watch Trades & Industries.

Two representatives from Taratec, an Indian manufacturer of hands and dials, came to Hong Kong for the first time after ten years during which they had focused primarily on the Swiss market, and they were feeling lots of good vibes: “We are acting in the mid- and high-end segments and it seems that we have good chances of expanding to Asian markets, not only China.”

One example of this was mentioned by Marton Radkai in his preview of the HKCWF, namely the “national trend” (guochao, 国潮) of recent years involving the incorporation elements from traditional Chinese culture into watch designs. This has drawn increased attention to domestic brands and watchmakers from Mainland China. Nevertheless, Leung also cautioned that the industry is still in transition, actively seeking a “systematic development pattern for a new allocation of global resources.”

At a more granular level, the search for new resource models is leading to significant supply chain diversification. Kim Dae-boong of the Korea Watch & Clock Industry Cooperative reported a rising interest in sourcing components from China and exploring India as a potential future supplier, despite what many see as a lack of deep experience in high-precision watchmaking. In fact, the Indian market is growing quite rapidly in terms of smartwatches and premium brand watches. This in turn may well engender a domestic supply chain.

On the topic of market expansion, however, Pierre Burgun, President of France Horlogerie, advocated for vigilance: “We have seen other difficult situations, so I think we will go through this also.”

Finally, Dr. Guido Grohman proposed a holistic vision for building resilience. His recommendations went beyond mere geographical shifts. Concretely, he proposed creating collaborative production hubs with partners in different countries to encourage cooperative work that would lower costs and promote synergies.

He also proposed digital Integration, including smarter logistics and traceability, such as blockchain technology, pioneered by Swiss watchmakers. And finally, he advocated for the foundation of international watchmaking schools to cultivate a global talent pool for the industry.

Dr. Grohmann concluded with an encouraging outlook: “If we embrace innovation and strengthen international partnerships, we will emerge stronger and smarter.” It was an optimistic statement tempered by the realities. Watchmaking is more than just making watches, it requires a robust ecosystem for maintenance, care, and repair, which are fundamental to the long-term value and legacy of a timepiece.

The other critical issue that was brought up, was culture. Watchmaking could become a shared activity, leading to synergies and economies of scale. Relocating production, which several speakers suggested, could, however, run into a problem. Watchmaking requires specialized, often region-specific expertise that cannot be easily replicated.

As Pierre Burgun eloquently argued, such a move can jeopardize a brand’s core identity: “Watches are sold by emotion and image: Swiss is perfection, Japan is technology, France is lifestyle… If you move the production, the story might not work anymore.”

For more information, please visit https://www.hktdc.com/event/hkwatchfair/en

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