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(Bloomberg) -- China’s luxury watch market will stabilize in 2015 as the industry recovers from last year’s decline in demand from high-end customers, according to Jean-Claude Biver, head of LVMH Moet Hennessy Louis Vuitton SA’s timepiece unit.
The growth of the country’s middle classes will also make it a better year for the Swiss timepiece industry in the Asian nation, Biver said in an interview last week.
“Every market that goes up needs to consolidate,” Biver said at his home near Montreux. “We probably lost 20 percent in the upper segment, but now that has been absorbed. In 2015, we are not going to lose 20 percent. I believe 2015 could be stable, and eventually a little bit up in the luxury segment.”
The Chinese government’s curbs on extravagance among officials has weighed on Swiss watchmakers in Hong Kong and China, two of their three biggest export markets. The industry is exiting from what probably will rank as the second-worst annual performance since 2009, with exports rising 2.3 percent in the first 11 months of 2014, a far cry from growth rates that reached as much as 22 percent in 2010.
The growth of China’s middle class -- more populous than the combined peoples of France and Germany -- will help stimulate the industry’s revival, Biver said.
“In 2015, China will not be weaker than in 2014, it will be better,” Biver said. “You have the upper price segment, luxury watches, then you have middle class. The middle class, which nobody talks about, has not been hurt. And which class is developing the fastest? The middle class. So we have to look at China as a total picture, not just luxury. China is not as bad as it might be when you look only at one segment, you have to look at the whole picture.”
To contact the reporters on this story: Corinne Gretler in Zurich at firstname.lastname@example.org; Jan Schwalbe in Zurich at email@example.com To contact the editors responsible for this story: Celeste Perri at firstname.lastname@example.org Paul Jarvis, Robert Valpuesta