The Pro View:
New Swiss Made rules benefit the watch industry
The strengthening of the “Swiss Made” ordinance for watches by the Swiss Federal Council is excellent news, not only for consumers, but manufacturers too.
The term “Swiss Made” has long been associated with watches, and consumers often identify the “watch” as a product with Switzerland as the country behind it. This reputation has been forged for centuries and well-known sayings like “as accurate as a Swiss watch” still exist today. When Jean Calvin, an influential figure in the Protestant Reformation in Geneva, banned the wearing of decorative jewelry in the mid-16th century, the city’s goldsmiths and jewelers had to turn to watchmaking. This marked the birth of the unique watchmaking tradition in Switzerland and the country went on to build an unrivaled reputation and know-how in this field. It is this blend of tradition, experience and creativity teamed with the very latest technology that has made the Swiss watch industry what it is today. This incredible heritage benefits the whole Swiss watch industry, separately from the different brands and their market segments.
However, this heritage is dependent on consumer confidence and associated with responsibility. On the consumer confidence level, the Swissness Worldwide 2016 study by the Institute of Marketing at the University of St. Gallen shows that in a large majority of countries, more than 90% of consumers tend to buy a Swiss watch in preference to a foreign watch at an identical price. Even if the price of the Swiss watch is twice that of a similar foreign model, a majority of consumers would still buy the Swiss watch. In other words, the price premium for a Swiss watch is more than 100%! On the responsibility side however–and this is the counterpart–surveys show that consumers expect a Swiss watch to contain at least a significant proportion of Swiss components and value, across all market segments. To put it in a nutshell, consumers buy Swiss watches because they expect them to offer added value.
Such consumer confidence deserves adequate protection of the term “Swiss” in relation to watches. In regulatory terms, this has not been the case until now, as the former “Swiss Made” ordinance for watches did not state a percentage for the level of watch manufacturing costs incurred in Switzerland.