http://www.economist.com/news/business/21571943-industry-ripe-shake-up-time-money
This article explains how the Swiss watch industry is surviving in this economy. The average Swiss watch costs $685, a Chinese one costs around $2 and tells the time just as well, but exports of watches made in Switzerland have grown by 32% by value over the past two years, to SFr21.4 billion ($23.3 billion). The Swatch Group’s stable of brands generated watch and jewellery sales of SFr7.3 billion in 2012. That is up by 15.6% over the previous year and accounts for one-third of all sales of Swiss watches. It's hard to believe how this company is thriving during these hard times even though their watches are so expensive. This article also shows how the prices of these watches might even increase which is hard to believe.
While it is hard to imagine that people pay upwards of $700 for a watch, I think this has to do with the fact that we are college students. Well made watches last a lifetime and are a symbol of distinction and accomplishment amongst the wealthy and working class. Swiss watches are known for quality and lifetime value, therefore it only makes sense that they are still afloat and thriving as a company.
ReplyDeleteEven considering the quality of these watches, I don't think I could ever bring myself to pay that much for something that I could get for a fraction of the price which could be just as good. It's mind blowing that people gladly spend this much money on such small things like watches, instead of more necessary things.
ReplyDeleteLike Steph said, their sales can definitely be attributed to who these watches are marketed to. Even if the general populous is going through tough times, the ultra wealthy are still going to be a part of the ultra wealthy. They will still be able to buy these Swiss watches, which due to brand recognition, will be seen as being worthy of wearing their price tags.
ReplyDeleteWatches are one of the most distinguishing accessories in the business world. They mark success or lack their of. The people that can afford these expensive watches probably weren't affected that severely by the recent recession. Their demand for these luxury goods are inelastic meaning their demand wont change due to a recession or increase in price. The people that buy these watches probably weren't affected by the recession either. I believe if the price of the watch continues to increase the demand will not change.
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