China exported 956.9
million watches worth US$977.4 million in 2004. However, export
growth rates in the industry have been decreasing dramatically.
Export sales last year increased by only 2.5 percent, significantly
lower than the 22.4 percent growth rate registered in 2003. Even
volume growth has slowed. Where total outbound shipments increased
10 percent in 2003, they rose only 5.4 percent in 2004.
The downward trend is continuing in 2005. Exports in the first
seven months of 2005 were down 7.7 percent to US$460.9 million from
the same period in 2004. The number of pieces shipped fell 13.7
percent to 418.6million.
One of the main reasons for the decrease in exports is the decline
in demand for low-end watches including promotional models.
The following are some of the
key trends we see in China's watches industry: |
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Many suppliers are shifting focus to midrange
watches to overcome declining demand for low-priced models.
Some of the larger companies are also trying to increase
exports under their in-house brands, while a few have even
started producing high end tour billon watches. |
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Even though many watchmakers are enhancing
their designs, low-end watches will continue to be China's
mainstay for the next several years. This is mainly because
of a lack of skilled and experienced designers. |
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Rising material and production costs will
have a limited impact on export prices, with a large number
of suppliers increasing quotes, mostly by up to 5 percent.
The majority, however, will keep prices stable. |
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The output of multifunction watches is
expected to increase substantially in the next 12 months. |
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Aside from the usual calendar and alarm functions, these watches
have value-added functions such as USB flash disks drives, digital
cameras, MP3 players, laser pointers, pedometers, heart-rate monitors,
radios and even universal TV remote controls.
Watchmakers in China produce promotional, classic, fashion, sports,
children's and tech watches. These are also the scope of this report.
While most suppliers offer a range of watches across all categories,
some specialize in one or two lines. More than 61 percent of the
suppliers in this report produce at least four kinds of watches
for export, usually with classic, fashion and sports designs as
the major lines. Nineteen percent specialize in one or two categories,
usually children's or tech models.
The features and prices of each kind of watch are discussed according
to low end, midrange and high end in the Products & Prices section.
The R&D module discusses how makers are improving product
development and design capability as a means to be more competitive.
The Materials & Components section explains sourcing of movements,
modules and other materials, and how this affects overall product
quality. The Manufacturing section details the production and QC
processes in small, midsize and large companies.
Most watch suppliers in China are locally owned. Sixty-eight
percent of companies profiled in this report are private locally
owned. Hong Kong-owned or invested companies comprise 22 percent
and a few are Taiwan-owned or invested.
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