Luxury watch market to shift from great premiumization to recalibration
The watch market has seen an unprecedented level of premiumization over the past two decades: Swiss watch manufacturers halved their output of products since 2000, while export revenue has risen from $12 billion to $31 billion, according to a new report from Strategic Gears.
The global luxury watch market has undergone a historic transformation, moving decisively from mass production toward a model prioritizing high value. Over the past quarter-century, the output of Swiss watch manufacturers dropped from 29.7 million units in 2000 to 14.6 million in 2025.
Despite this significant decrease in quantity, export revenue nearly tripled during the same period. This decoupling of volume and value shows how brands now worked hard to capture more value per individual unit sold. Despite market turbulence, this premiumization has gone quite well for luxury watch makers.
Today, the luxury tier, defined as watches priced above $3,825 at export, accounts for 80% of total Swiss export value. This is a sharp increase from 2000, when that same segment represented only 34% of value. Meanwhile, the market for more affordable timepieces has collapsed; the combined share of mass and accessible segments fell from a quarter of export value in 2000 to just 5% in 2025.
Trade volume in the luxury market has not seen a linear trajectory in recent years. There was a significant contraction during the Covid-19 pandemic, though part of the policy response to that ended up channeling surplus liquidity into discretionary and speculative categories, including luxury watches.
More recently, the environment for the luxury watch market is marked by uncertainty linked to geopolitical risk and inflation, not unlike many other sectors. The same goes for other luxury categories like luxury cars, yachts, and beauty products, all of which saw growth slowing in 2024.
The economics of scarcity and secondary markets
A defining feature of this industry is the persistence of secondary market premiums, where select watches trade significantly above their original retail prices. While most consumer goods lose value immediately after purchase, luxury watches often resist depreciation due to engineered scarcity and high demand. For example, the Rolex Daytona retails for $14,800, yet buyers in the secondary market pay approximately $27,300 – that is an appreciation of 85%.
The market is currently dominated by five major brands – Rolex, Cartier, Patek Philippe, Omega, and Audemars Piguet – which together represent 61% of the total market share. Rolex leads the industry with a 39.9% share of the luxury watch trade.
The report found that brand hierarchy and production status are the strongest predictors of value. For example, discontinued models see an average price appreciation of 122% because of the very low supply and high demand.
Global demand and future outlook
The pool of potential buyers remains vast compared to the limited supply of high-end timepieces. There are only around 60 million individuals worldwide are wealthy enough to comfortably purchase a watch priced between $3,825 and $63,750. This creates a competitive environment with roughly 14 qualified buyers for every luxury watch produced annually. Around 70% of the demand base for these watches is in North America and Europe.
As the industry moves forward, brands are navigating a period of recalibration following a post-pandemic surge. The boom in 2022 and 2023 was partly driven by high liquidity and low interest rates, but current conditions involve tighter liquidity and geopolitical uncertainty.
Companies are now weighing strategic choices, such as expanding into certified pre-owned programs and utilizing AI to better leverage buyer data and to protect their financial and reputational capital in a shifting global economy.
“Strategies that maximize short-term revenue can erode desirability perception, while strategies that prioritize reputation can leave money on the table in the short term,” notes the Strategic Gears report.
“Every strategic lever available to a watch brand, including pricing, distribution, and marketing, among others, affects both dimensions. A careful understanding of the market pulse is warranted for watchmakers to assign their strategic priorities in charting their next growth curve in an industry under recalibration.”
