Over the weekend, the Swatch Group dropped a certifiable bombshell on the watch industry by announcing that it would not be presenting at Baselworld 2019. In an interview conducted with NZZ am Sonntag (a Zurich-based periodical newspaper) on Sunday, Swatch Group CEO Nicolas Hayek Jr. reportedly stated that the watch manufacturing conglomerate — historically responsible for showing 18 different brands at Baselworld — would not attend next year to “amortise an expensive hall designed by Herzog & de Meuron,” the Swiss architecture firm behind the watch fair’s luxe exhibition space. The news — and Hayek’s thinly veiled grievance that watchmakers are subsidising the business of other creative industries — comes as an inarguable blow to the event’s organisers, despite not being entirely without precedent. At time of writing, no Baselworld representatives could be reached for comment.
First held in 1917, Baselworld has (for much of its tenure) been an essential event in the watch industry calendar. In recent years, that reputation has come under withering scrutiny as dozens of independent watchmakers have opted out of attending, citing prohibitive exhibition and travel costs compounded by diminishing returns. The phenomenon isn’t restricted to “upstart” brands with low buy-in power either; as internationally scaled luxury conglomerates spend tens of millions of dollars at Baselworld each year, often departing the 10-day tradeshow without tangible results. This year, Hermès — who are rapidly integrating fine watchmaking into their existing portfolio — severed their connection altogether, relocating to SIHH, a departure which many industry watchers are claiming broadcasts widespread dissatisfaction with the traditional Baselworld format. And that was before the Swatch Group announcement on Sunday.
For the moment, it’s difficult to ascertain what impact Sunday’s announcement will have on the watch industry at large. On the one hand, the Swatch portfolio — encompassing everything from inexpensive quartz watches to haute horlogerie marques like Breguet and Omega — is responsible for attracting a huge contingent of insiders to Baselworld each year; but the group’s reported withdrawal is likely to be offset by the continued participation of LVMH, Patek Philippe and (crucially) Rolex. There is also the additional factor of permanence: if Hayek & co refuse to exhibit the Swatch brands in 2019, will they banned from returning to Basel for subsequent editions? Not necessarily.
Across a variety of comparable industries, experts are observing a growing contingent of companies that adopt an “on again off again” approach to annualised international trade shows. The practice has become especially routine in the video game industry, with companies like Electronic Arts — which netted US$5.15 billion in revenue over the previous financial year — supplementing their attendance of traditional marketing events (e.g. E3) with strategies that embrace the increasingly digital preferences of consumers.
What is evident from the Swatch Group’s latest announcement (and the less than charitable comments of its CEO) is a growing exasperation with the kind of outmoded marketing practices that are still par-for-the-course throughout much of the Swiss watch industry. Established organisations such as Baselworld ignore the warning signs at their own peril.