Exports of watches and clocks grow by 14pc, and imports fare even better While Sars has had a devastating impact on the economy as a whole, Hong Kong's timepiece sector has emerged from the crisis relatively unscathed, with many firms reporting sales growth compared with last year. Hong Kong's total exports of watches and clocks grew by 14 per cent over the first six months of the year, according to figures released last month by the Hong Kong Trade Development Council (HKTDC). Interestingly, the export value for the same period last year was down by 15 per cent. Imports did even better, registering 16 per cent growth in the first half. The United States and China, which absorb the largest share of Hong Kong's timepiece exports, saw growth of 5 per cent and 8 per cent respectively. Third-placed Japan recorded 32 per cent growth, followed by Switzerland with 24 per cent and Germany with 47 per cent. Taken collectively, the countries making up the European Union, together with the United States, are the two largest markets, absorbing nearly half of total exports. Of Hong Kong's top 20 export destinations, only three saw sales fall: the Philippines, the Netherlands and Panama. Hong Kong imported watches and clocks worth HK$14,867 million from China in the first six months of the year, up 16 per cent on the same period last year. Switzerland's exports to Hong Kong grew 18 per cent, followed by Japan, with 24 per cent. Singapore and Thailand registered relatively modest gains of 1 per cent and 4 per cent respectively. The most spectacular gains were registered by Hungary, up 391 per cent, Sweden, up 164 per cent, and Spain, up 116 per cent. Only three of Hong Kong's top 20 suppliers of timepieces - Australia, Belgium and India - registered decreases. Sales performance varies widely. Firms concentrating on the US market, for example, were especially hard hit following the September 11, 2001, terrorist attacks on the United States. Many of these companies, which saw sales plummet last year, are reporting strong demand this year. Artistic Watch, which exports primarily to the United States and Japan, is a case in point. Sales have picked up significantly this year, according to managing director Anthony Cheung. 'After 9-11, exports to the US dropped by about 50 per cent,' Mr Cheung says. 'The US economy seems to be getting better and people are buying again. Demand for jewellery and watches in Japan also seems to be picking up compared with last year.' The impact of Sars on Sun Tai Watch has also been minimal, according to general manager Candy Wong. 'Last year was not bad, about the same as the year before,' she says. 'This year has been a little bit better, up about 5 per cent.' The news is surprising, considering that many Hong Kong watchmakers were not able to take part in the Basel Watch, Clock and Jewellery Fair, which took place during the Sars outbreak. One reason Hong Kong's timepiece industry was not hit harder by the setback is that technological advances over the past few years have transformed business practices. Thanks to the internet, a growing number of buyers and makers are putting up websites that enable them to promote or source their products online. Because of their relatively small size, simplicity of packaging and lack of technical detail, watches and clocks seem especially well suited for cyberspace marketing. 'Not being allowed to take part in the Basel trade fair did have an impact, but apart from that we were not affected,' says Gary Sharma, director of PRG Watch. 'These days you do not need customers to come to Hong Kong in order to do business. Everything can be done by telephone, fax and e-mail.' Although she could not reveal exact figures, Doreen Chu, marketing manager at Advance Group Inc-Asia Market, says that the Sars outbreak had a strongly adverse impact on business for her company. The slowdown, however, was relatively short-lived. 'By July, things had started to pick up,' Ms Chu says. 'Things are now moving very quickly, so we expect to meet our overall target for the year.' The local timepiece industry has become one of the world's top players, alongside such powerhouses as Switzerland and Japan. According to the HKTDC, Hong Kong is the world's second-largest exporter of watches. In terms of value, it is second only to Switzerland. In terms of quantity, it is second only to China. Hong Kong's clock sector, meanwhile, is first in terms of value and second in terms of quantity. Battery-powered wristwatches account for more than 60 per cent of Hong Kong's timepiece exports. Included are analogue and digital models, ranging from simple models with plastic cases all the way up to fashionable timepieces studded with precious gems. Parts and components are also important export sectors.