Luxury watchmakers see clouds on China "Eldorado"
By Antonella Ciancio and Nathalie Olof-Ors
BASEL, Switzerland (Reuters) - Luxury watchmakers are hoping a stronger-than-expected recovery in the United States and global exposure will help them sail through a more challenging market in China, where the days of unstoppable growth are ticking by.
"Asia is the market which everybody is more concerned about. People are concerned because they know that if Asia is going down there will be big problems," Thierry Stern, chairman of Geneva-based watchmaker Patek Philippe, told Reuters at the world's biggest watch and jewels fair in Basel on Wednesday.
China is the single biggest growth driver for the watch industry, according to an analyst at Kepler Capital Markets.
He estimates Asia will account for two-thirds of the luxury watch market by 2016, up from little more than 50 percent last year.
However, Chinese Premier Wen Jiabao cut on Monday the nation's growth target by half a point to 7.5 percent for 2012, which would be the slowest pace in decades.
Established brands such as Patek Philippe, Omega and Longines are confident that their deep knowledge of the markets will give them a tailwind against risks of a slowdown in China.
"I don't think we have to be alarmed because all of a sudden the Eldorado has a little bit of cloud over it," Omega Chairman Stephen Urqhart told Reuters in Basel, where 2,000 exhibitors spread over floor space the size of Buckingham Palace.
Omega and Longines, both owned by the world's biggest watchmaker Swatch Group SA UHR.VX, are the two most preferred brands by Chinese Internet users, according to a report by Digital Luxury Group released on Wednesday. Continued...