Crowning Glory: Rolex Breaks All Records With Sales Worth $10 Billion In 2023

While Rolex watches have long been the most sought-after, 2020 ushered in a new milestone for the world's most esteemed luxury watch brand, setting it apart as unrivalled in terms of popularity, craftsmanship, and desirability. Buoyed by an extraordinary demand for luxury timepieces during the pandemic, Rolex SA trumped the Swatch Group to become the world’s largest watchmaking company for the first time in 2020.

Today, Rolex produces around a million watches annually and commands more than a quarter of the luxury watch market. As per a recent report brought out by Morgan Stanley and Swiss firm LuxeConsult, Rolex reported sales worth $10 billion in 2023 – a first in its history since 1905.

With a production of 1.24 million watches last year, Rolex, with its iconic models like the Daytona, Submariner, and Datejust, outshone other top brands like Cartier, Audemars Piguet, Omega, Richard Mille, and Patek Philippe with unprecedented sales in 2023. According to Morgan Stanley, the brand substantially increased the availability of its steel watches like the Submariner, which might have been one of the major contributors to the reported surge in sales. “Rolex dominates the price segments for its “bread and butter” business – from CHF 7,000 to CHF 15,000 with an average price estimate of CHF 12,200. This has armed the brand with significant pricing power that puts it on the offensive further expanding its dominant position to a 30.3% retail market share. No other luxury brand can claim such a dominant position in its respective sector,” states the report.

Big Brands Continue To Get Bigger

Besides Rolex, the luxury watch market’s  ‘Big Four’ – Audemars Piguet, Patek Philippe, Cartier and Richard Mille – captured an impressive combined market share of 43.9% last year. Cartier secured its place in the second position with salesworth $3.5 billion, Omega followed closely in third place, achieving a total of  $2.9 billion, while Audemars Piguet and Patek Philippe claimed fourth and fifth positions with $2.7 billion and $2.3 billion, respectively. As per Morgan Stanley’s analysis, Cartier has hugely benefited from its relatively  balanced customer base – women comprise approximately two-thirds and men one-third of its clientele. In the women's watch market, Cartier competes with Omega, offering a wide range of enticing entry-level products tailored to first-time buyers, including Gen Z and millennials.

One of the top-performing brands in terms of overall revenue, Audemars Piguet reported modest increase in sales in 2023, with an estimated total of 51,000 watches sold, and 2% rise from the previous year. In his remarkable 11-year tenure, AP’s outgoing CEO, François-Henry Bennahmias, quadrupled the company’s sales with an aggressive sales strategy that powered the brand to cross over CHF 1 billion for the first time in 2018. In 2021, Audemars Piguet established itself as the fourth largest watch brand by sales in Switzerland. The company recorded one of its most outstanding years in 2022, thanks to an amazing range of 50th anniversary specials, which accounted for over 90% of its sales and helped AP cross the CHF 2 billion mark for the first time. “The Code 11.59 product line, initially facing challenges in 2019, has now gained significant traction, constituting around 12% of AP's sales. This success reflects the brand’s ability to establish a compelling alternative to the iconic Royal Oak, rather than relying solely on cross-selling tactics. While Code 11.59 is not projected to exceed 20% of the brand's sales in the long term, it will play a vital role in diversifying AP's product portfolio and reducing its reliance on the Royal Oak,” says the report.

Up by 4% year-on-year, Omega has been the main growth driver for the Swatch Group in recent years. As per Morgan Stanley, over the past decade, Omega's contribution to the Group’s overall operating profits has increased from less than half to around 60% in 2023. Going strong as the world’s third largest brand by turnover, Omega reported sales worth $2.9 billion in 2023.

On the other hand, Patek Philippe, sold approximately 70,000 watches in 2023, accounting for a 3% increase from 2022. Renowned for its high average selling prices, with each watch priced at around CHF 40,000, Patek Philippe maintains a significant share of the industry's retail sales, reflecting its enduring appeal and prestige.

“As in recent years, the premiumisation of the Swiss watch industry continued unabated in 2023 with most brands at the top of the luxury pyramid outperforming brands at the bottom of the pyramid.  Rolex, Cartier, Omega and Patek Philippe together account for 50.2% of total Swiss watch industry sales. Thirteen brands account for 75% and 25 brands for 90% of the total Swiss made watch sales,” states the report.

Vacheron Constantin Joins The ‘Billionaires’ Club’

Among the top three performers from Richemont, Vacheron Constantin has finally made its mark with a grand entry in the ‘Billionaires Club’ last year. The brand recorded an 18% increase in its sales, closing in at CHF 1.097 billion for the first time. According to Morgan Stanley’s analysis, the world’s oldest watch company has “ benefited from the dramatic increase in demand for peers such as Patek Philippe and Audemars Piguet, and the concomitant increase in waiting lists of their most sought after iconic lines, such as the Nautilus or the Royal Oak.”  Vacheron's Overseas collection has been gradually gaining popularity among sports watch enthusiasts looking for options for the Nautilus and the Royal Oak – which are almost always out of stock at retail.

Swatch Finds The Sweet Spot

The world’s fastest growing Swiss watch brand for the second year in a row, Swatch posted the highest sales growth rate of 63% last year. Thanks to the unwavering popularity of the MoonSwatch, which sold more than two million pieces last year and contributed to 73% of the brand’s sales, Swatch is now on a unique growth trajectory. “We estimate that the Swatch brand increased its units sold in 2023 by 0.9m (to a total of 5.8m), and thus accounted for close to 75% of total industry growth in volume,” reports Morgan Stanley.

Other notable revelations from the Morgan Stanley estimates include the emergence of low-volume independent brands. F.P. Journe, for instance, is now projected to have sales totaling CHF 98 million, tripling its figures since 2021. According to the report 90% of FPJ watches are still sold through wholesale channels, however, we have seen the brand swiftly transitioning completely to direct-to-consumer model.

Other highlights from the report include the debut of H. Moser & Cie. among the top 50 Swiss watchmakers with sales reaching CHF 93 million. Meanwhile, Jacob & Co. has seen its revenue climb to CHF 146 million, marking a 12% increase from 2022.

As per the Federation of the Swiss Watch Industry, 2023 was a robust year for luxury exports. December marked a positive end to the year, with exports surging by 5.5%. Overall, the industry witnessed a significant increase in exports by 7.6% compared to 2022, reaching an unprecedented high of CHF 26.7 billion for 16.9 million watches. This milestone follows the remarkable recovery in 2021, which continued its momentum into 2022, establishing it as an excellent year for the watchmaking sector.