FIRST AIRED: January 15, 2019

Nice work! Enjoy the show!

×

You’re busy. We get it.

Stay on top of the news with our Editor’s Picks newsletter.

US Edition
Intl. Edition
Unsubscribe at any time. One click, it’s gone.

Thanks for signing up!

×

Transcript

00:00:00
>> They'll set you back tens of thousands of dollars each. And the Swiss watch makers behind these luxury time pieces rely on China to spend the cash. But some high-end brands are starting to see worrying signs of slowing spending from Chinese tourists. Reuters' Sarah White is at the International Watch Fair in Geneva.
00:00:18
>> People have been worried about China and the luxury goods industry for a little while now, since about last summer when fears started emerging about the knock-on effect that a trade war between the United States and China would have on a consumer base that makes up about a third of the industry's sales.
00:00:34
Big companies like LVMH, like Kering, the owner of Gucci, rely on this clientele for a big chunk of their business. We had some indication of that from Richemont last week, the owner of Cartier, that there has been maybe a slight slowdown in external markets like Hong Kong, where Chinese travelers have been squeezed by the fact their local currency has fallen against the Hong Kong dollar.
00:00:58
And so that's affecting their purchases abroad. So all of this has contributed to investor jitters about whether this huge pocket of demand is gonna start diminishing.>> But government measures like cuts in import taxes are pushing more of those shoppers to splurge domestically. Some companies are still banking on demand shifting to mainland China to fuel growth.
00:01:19
>> I think most remain relatively sanguine about China. They're pointing to underlying trends, the fact that young Chinese in their twenties, in their thirties, are really interested in branded goods. They're starting to spend more and more of their salary on these purchases. And I think overall, if you look at the demographic explosion there, people are not worried about China in the long term.
00:01:43
Walking around here today, we've seen some Chinese bloggers, famous influencers, Instagram stars, who are hired by watch makers to promote their brands and they're part of their communication strategy now.>> As one watchmaker CEO told Reuters, China's love story with luxury watches will continue to flourish.