CORONAVIRUS CHRONICLE

NOT ENOUGH MASKS, TOO MANY

WATCHES
The world is short of masks, but brimming over with watches.
Stocks are overflowing. When business takes up again, the
idea that it will be business as usual is illusory. Not only will
these stocks have to be sold, a radical rethink will be required.
Together.
atches – the retailers’ drawers and safes are full to
bursting with them. In China, they had just been stuffed
even fuller in anticipation of the Chinese New Year and
record sales when everybody had to lock up – and lock
down.
At the same time, many miles away,
the manufactures were running at full speed to finalise
and start production of the new products that were to be
presented and launched at the two grand watchmaking
fairs of Geneva and Basel, this year scheduled for the
end of April. A late date, certainly, but which had the
advantage of reducing the well-known and strategically
important time-to-market.

For most people, confinement is an experience

of time quite different from anything they had
previously known.
To use a liquid metaphor, imagine a spring that continues
to flow into a fountain that is already overflowing. To
prevent the water spilling everywhere and being wasted,
you have to start by shutting down the pumps at the
spring.
This is exactly what is happening today.
Since the coronavirus did not remain in China but
migrated right into the very valleys where watches are
made, the manufactures have been forced to turn off the
taps – which they would have had to do anyway, even if
 the coronavirus had stopped at China’s borders. But now
it is knocking at their own door. The entire horological
supply chain, at a standstill, is submerged from the tap to
the fountain.

A CHANGE OF PARADIGM
We are not going to blind you with figures at this point. It
is true that China saw its watch imports drop 51.05% in
February (according to the Federation of the Swiss
Watch Industry), and while some people are reassuring
themselves that “the doors are already opening again”,
or, like Nick Hayek as recently as 19 March, that “once
the crisis is past we can start up again without any
problem and attack the market”, all the other fountains
and water tanks are now overflowing as well: Europe,
today California, soon New York, tomorrow the rest of the
world – and so it will go on until the pandemic dies down.
How long will that take? No one knows.
But above all, this pandemic crisis comes on the back of
another crisis, possibly a complete reassessment.
“Attacking the market”, as Nick Hayek puts it, is certainly
going to demand different arms and ammunition than
usual.
Indeed, the predominating watchmaking model of the past decade was
already struggling well before the coronavirus came on the scene. Before the
viral wave began to unfurl, the Swiss watch industry had already gone
gleefully upmarket, taking refuge in the lofty havens of the luxury segment. In
so doing, it was simply following the lead of the prevailing economic models,
continuously gouging out a deeper gap between the 1% and the rest (in 2018,
Switzerland exported fewer than 24 million watches compared with 860 million
in the case of China and Hong Kong, but its turnover rose from 8.4 to 19.9
billion francs in 10 years. For the historian Pierre-Yves Donzé, the period
1998-2018 saw the birth of “big watchmaking business”).

The post-coronavirus question is not so much

how to sell stocks, but rather: what kind of
demand might emerge in the wake of this
sanitary, economic, social and societal
catastrophe?
But curiously enough, those supposedly safe havens
were the first to be hit. And Swiss watchmaking will,
 without a doubt, not only have to manage its stocks,
redesign its flows, reconfigure its logistics and readjust its
production lines; at a deeper level, it is going to have to
review its business model. Undergo a change of
paradigm.

WHAT KIND OF WATCH INDUSTRY

FOR A POST-CORONAVIRUS
WORLD?
The question facing the Swiss watch industry as to what
happens post-coronavirus is not so much how to sell
stocks in order to stock up again immediately with
products designed pre-crisis, but rather: what kind of
demand might emerge in the wake of this sanitary,
economic, social and societal catastrophe?
Whatever happens, the pandemic will have changed
people’s perspectives (for the better, one hopes; but
perhaps, in certain places, for the worse). In other words,
will it give birth to new forms of outreach, solidarity, a
sharing in a common destiny? Or will it, on the contrary,
exacerbate tensions and raise new borders?
We do not pretend to be able to answer this question, but
in our view one thing is certain: the future lies not in
excess, but in moderation. It is not about brinkmanship,
but meaningfulness. The post-coronavirus customers will
no longer be the same. Their aspirations will have
changed without a doubt. In what way remains to be
seen.
But already, for one simple and obvious reason: most of
them will have experienced confinement –an experience
of time quite different from anything they had previously
known. They will have gone through something together.
And if just one virtue were to be found in this pandemic, it
is its democratic aspect. It does not choose. It blindly
affects both the powerful and the unknowns.
Watchmaking will come through it as long as it reaches
out and speaks to everyone.

The post-coronavirus customers will no longer

be the same. Their aspirations will have
changed. In what way remains to be seen.