Geneva: The Swiss watch industry is in rude health, the latest figures show, with exports leaping once again last month and watchmakers set to notch up a record year thanks to hungry Chinese consumers.

Despite the strong Swiss franc punishing exporters, not to mention the effect of the global debt crisis, the demand for Swiss watches hit a peak in October, putting smiles on the faces of the country's 600 watchmakers.

Data from the Federation of the Swiss Watch Industry (FH) showed month-on month exports for October rose to 1.9 billion Swiss francs (Dh7.5 billion), up 18.6 per cent over last year.

"The upward trend is clearly continuing... and shows no signs of weakening," the trade body said.

While Switzerland only represents two per cent of the global market in terms of volume, with 26 million watches sold last year compared to China's 671 million and Hong Kong's 419 million, it remains the top world exporter in terms of value, enjoying a more than 50 per cent market share, analysts at Bank Vontobel said.

Annual Swiss watch sales were worth $15.5 billion (Dh56.9 billion), exceeding both Hong Kong's $7.5 billion and China's $3.1 billion.

About 95 per cent of watches costing more than 1,000 Swiss francs were produced in Switzerland.

The world's top three watchmakers are also Swiss: Swatch with a 17.4 per cent market share in 2010, followed by Rolex (14.7 per cent) and Richemont (14.7 per cent). French luxury brand LVMH ranks fourth with a 5.5 per cent share, Vontobel said.

The Swiss domination in the luxury watch sector was underlined by the October figures, which showed exports of watches priced upwards of 3,000 Swiss francs recording the strongest increase — by 25 per cent.

The apparently insatiable appetite of Asian consumers is a major factor in its success, with sales to Hong Kong jumping 18.7 per cent and to China 67.8 per cent. Cygnus Business Consulting expects China to surpass Japan as the leading buyer of luxury goods.

Purchasing power

"It is widely thought in China the possession of luxury goods factors a lot in judging a person's social status," they said, adding that China's growing purchasing power was contributing strongly to the demand for luxury products. Swiss watches are included in that trend and companies are investing heavily in China.

The Swatch group, with brands such as Omega and Tissot, sells 49 per cent of its watches in Asia said Vontobel, and is about to open a hotel in Shanghai with a shop for its timepieces.

"It's not enough that the Chinese have more money, they must also spend it" on Swiss watches, said Jean-Daniel Pache, president of the FH, who said they were attracted by Swiss quality and design. This year will be a "record year", with sales topping 17 billion Swiss francs, he added.