* Most polled executives see strongest growth in Asia-survey
* Growth in Chinese second-tier cities, Korea,
* Shortage of skilled labour, watch part supply seen as
* Two-thirds of respondents see M&A picking up in next 12
ZURICH, Nov 13 Strong demand for Swiss watches
in China's second-tier cities and other Asian markets should
continue to drive export growth in the next 12 months, a survey
of 50 Swiss watch executives showed on Tuesday.
Fifty-eight percent of polled watch brands expect the
strongest growth in watch exports to come from Asia over the
next year, a survey conducted by professional services firm
"Worries about a possible growth slowdown in the main export
markets are persistent amongst the executives," Jean-Francois
Lagasse, partner corporate finance at Deloitte, said in a
"But the growth of the Chinese and other emerging markets is
still high - and there are still untapped opportunities for the
Swiss watch industry in many of these markets," he said.
The Chinese market has not yet been fully exploited given
many Swiss watch brands were only just beginning to expand
beyond the entry points of Hong Kong, Shanghai and Beijing, the
Growth of Swiss watch exports fell for the first time in
2-1/2 years in September as high stock levels at China and Hong
Kong retailers sent exports to these top markets plummeting.
Kepler Capital Market analyst Jon Cox said he expects export
growth to slow to 7 percent in 2012 and 2013 from 19.2 percent
Of the surveyed watch brands, component makers and other
sub-contractors, 49 percent judge the outlook for the Swiss
watch industry as positive for the next 12 months, while 18
percent see it as negative, Deloitte said.
"Executives told us that growth in China is mainly going to
come from second-tier cities, which have not yet developed their
full potential and where brands are investing in their
distribution network," Lagasse told Reuters by telephone.
"Japan and Korea are also going to drive growth," he said.
The Deloitte survey, based on interviews and an online
survey, cited the shortage of skilled labour and the
availability of watch parts and movements as major challenges.
To alleviate sourcing problems in production and skilled
labour, large groups and brands are likely to continue acquiring
suppliers, with almost two-thirds of respondents expecting M&A
levels to rise in the next 12 months, Deloitte said.
(Reporting by Silke Koltrowitz; Editing by Jon Hemming)