Swiss watches in Poland. Interview with Benjaminem Schwaegli – Head of Swiss Business Hub Poland in Warsaw
The drawback of discussions on watch-related topics with industry representatives is, that such persons perceive the issues from inside and often do not see potential dangers or possibilities from outside.
Today we have a chance to talk about watches and get acquainted with opinion of a person that knows the industry well, however is not related to it anymore and currently supports the Swiss-Polish business relations.
Mr. Benjamin Schwaegli is Trade Counsellor at the Swiss Embassy in Poland and Head of Swiss Business Hub Poland – the integrated part of the Embassy that represents the official Swiss organization for internationalization of companies - Switzerland Global Enterprise (S-GE).
In 2015 Benjamin Schwaegli participated in the Annual Meeting of the Watches and Timepieces Enthusiasts Club and since then, he has maintained the contact with the Club. Benjamin Schwaegli has been living in Poland since 2014 and has Polish wife.
The interview has been conducted by Władysław Meller – editor-in-Chief of the portal Watches and Passion.
First of all, I would like to thank you for the opportunity to meet and talk about watches. Our readers will be eager to get to know the views of person who is active in the field of Swiss economy and is not directly related to the watch industry.
Wladyslaw Meller (ZiP): In 2014 Swiss Watch Export achieved next record of 22,2 billion francs. 2015 was not so good, 2016 looks like even worse comparing previous figures. What is the share of watches in Swiss exports and national income?
Benjamin Schwaegli (B.S): The watch industry is very important for Switzerland. Even in 2016 the exports reached 19.4 billion francs, which represents 9.2% of all Swiss exports. Only exports of the chemical and pharmaceutical industry and of the machinery industry have higher export values. Watches are therefore the 3rd most important export good for Switzerland.
The watch industry is a key pillar of the Swiss economy. Not only because it contributes to around 2% of the GVA (Gross value added) of Switzerland, but it is very important for the image of Swiss products. All over the world Swiss watches are known for their precision and perfection and that is also what people associate with other products from Switzerland.
(ZiP): Do Swiss people still see watch business as a “national profession”?
(B.S): The watch industry has a long tradition in Switzerland and Swiss people are proud of it. The profession of a watchmaker is not only about technique it is also about art and there is a high respect for watchmakers in Switzerland.
(ZiP): How many people do work in watch business in Switzerland (number and percent of total Swiss workers)?
(B.S): There are around 60‘000 people working for the watch industry in Switzerland, this is slightly more than 1% of all working people in Switzerland.
But as you know, most companies of the watch industry are located in the western part of Switzerland, especially in the cantons of Neuenburg, Bern, Genf, Jura, Waadt and Solothurn. In some of these regions, the watch industry is the most important employer.
(ZiP): In 2015 Swiss export of watches to Poland amounted to ca 47 m Francs (2016 should be better), and with this figure even in Europe we are not listed in first 20 countries importing Swiss watches.
How is Poland perceived by Swiss companies as a business partner?
(B.S): With a bilateral trade volume of 4 billion Swiss Francs, Poland is the 16th most important trade partner for Switzerland. What makes Poland more interesting than other European countries is the high growth rate. When it comes to watches, you are right that the exports of Swiss watches are still at a relatively low level, but with quite impressive grow rates – especially if you compare it to other countries. In 2016 the export of mechanical Swiss watches to Poland increased by 9% while worldwide the exports decreased by 10%. That means Poland gets more and more important as an export market for Swiss watch companies.
(ZiP): Baselworld is the most important fair in watch business. Is Baselworld kind of fest in whole Switzerland, or only in watch business?
What is the best known fair meeting in Switzerland?
(B.S): With around 150’000 visitors Baselworld is one of the biggest trade fairs in Switzerland and for the watch industry it is clearly the highlight of the year.
The trade fair is also open for the public and if one is passionate about watches he should visit the Baselworld at least once in his life.
There are also other important trade fairs in Switzerland. I think the best-known is the International Geneva Motor Show with almost 700’000 visitors every year. Then we have various fairs for the public which are some kind of mix between a trade fair and a festival, like for example the Olma in St. Gallen with almost 400’000 visitors.
(ZiP): The largest Swiss company from watch industry in Poland is Swatch Group Polska sp. z o.o.
Is another important Swiss producer of watches present in Poland?
(B.S): There are a lot of Swiss watch brands available in Poland. Unfortunately, some of the best-known ones, like Patek Philipe, are still missing.
(ZiP): Do you have business contact with Swatch Group Polska, or its headquarter in Switzerland?
(B.S): Before I moved to Poland, I worked for 7 years for the Swatch Group where I was responsible for the Production Engineering Department at ETA. Therefore I still have some good contacts to the Swatch Group in Switzerland.
(ZiP): We, as watch lovers, are talking about watches very often. You are Swiss man in the Swiss Embassy.
You had personal episode with watch business.
Do you look at watches from your colleagues in Embassy, your visitors, your Polish colleagues?
(B.S): Sometimes it is a good starting point for a conversation. Especially when someone is wearing a brand from Switzerland (which is quite often the case), I have a good topic to discuss. And as watches often have a history or meaning, the discussion quickly becomes a personal touch.
(ZiP): Today IPhones and Smart phones are becoming popular. Managers from smartphone industry are talking about end of era of traditional watches.
What is your private opinion in this matter?
(B.S): Smart watches are quite a hot topic since years in the Swiss watch industry. There are and there were a lot of discussions if this will be the start of a second crisis. Some people compare the situation to the one we had just before the quartz crisis in the seventies.
In my opinion, today’s situation with smart watches is more complex. I think we have to consider different points in this discussion.
First, I think smart watches are not a threat for mechanical watches. Already today, people do not buy a mechanical watch because it has more functionality or is more precise than a quartz or a smart watch. Art, prestige and a passion are much more important. The watch is much more a jewellery than just a watch. In my opinion, with all the digitalization and high-tech products of today, there could be even a higher demand for traditional, non-digital products.
For quartz watches, the threat is real. Especially sport watches with a lot of functionality and which are in the same price level or even more expensive than smart watches, could have problems. I think these producers should make their watches smart, means connectable with the smartphone to compete with the new competitors.
For cheaper quartz watches, like for example a classic Swatch, I don’t see a threat. These are more fashion products and they are in another price class and also market segment than Smart watches.
(ZiP): Do you have any information from watch industry in this matter?
(B.S): The Swiss watch industry is stronger in the field of Smart watches than most people know. The Swatch Group for example has with its subsidiary EM Microelectonic a semiconductor manufacturer specialized in the design and production of ultra low power integrated circuits. In 1993 the Swatch Group introduced the very first “connected” watch, the Pager which could pick up alphanumeric messages. And already in 2004, together with Microsoft, Swatch launched the Paparazzi – a watch that could connect to the internet.
Today, different Swiss companies already have a Smart or at least connected watch in their portfolio. I think the Swiss watch industry has to consider Smart watches as an opportunity to attract new customers and not fear to much the competition from phone companies. The Swiss watch brands already have great connected or smart watches and I am convinced that with the know-how they have, they will bring out even more innovative products in the near future.
(ZiP): Did you know, that last year the place of birth of Antoni Norbert Patek "moved" from Piaski (Luterskie) to Piaski Szlacheckie (Ziemiańskie)?
Did you see official information in Swiss magazines or internet portals about it?
(B.S): Thank you for this interesting information. I am not aware that this has been published in any Swiss magazine or internet portal.
(ZiP): There are some (still not many) watch brands active on our market. Since few years we have Omega boutique here. Still Patek Philippe is absent. Even Watch Connoisseur Club can’t invite this firm for presentation, only. This is important for us, because of Polish background of this firm.
What is your opinion in this matter?
Are you able to give help to Club with invitation of Patek Philippe to Poland?
(B.S): It is sad that Patek Philippe with their unique history is not present in Poland. If I can help your Club to organize presentation of this company in Poland, I would be very happy to do so.
(ZiP): Thank you very much for this interview. In few weeks Baselworld 2017 will start. I think, your information will be useful for distributors and owners of shops from Poland, who will be present there.
I hope we will stay in contact, and it will be possible not only this time to talk about watches in similar way, like this time. Once again thank you very much for interview.
(B.S): It was great to talk with you about the Swiss watch industry. I really appreciate the work of the Polish Watch and Clock Collectors Club. Your annual club meeting is a perfect platform for companies to show new products and to connect and discuss with experts from the watch business in Poland. And with your various activities you make a huge contribution to enlarge the knowledge and passion for watches in Poland.