Swatch has always been said to the ‘Switzerland’s answer to Japanese quartz.’ The watches are simple, fun, affordable, and Swiss Made. But how is Swatch able to do this? Why are Swatch watches so cheap?
Swatch watches are cheap because the productions are kept in-house, with high automation. Swatch also uses materials creatively and leverages the other brands in the Swatch Group to lower operating costs. Swatch also targets an affordable market, so it cannot sell its watches expensively.
In this article, we will explore deeper into why Swatch watches are so cheap. We will also look into some questions commonly asked about Swatch as well.
ALSO READ: Is Swatch A Luxury Watch?
Why Are Swatch Watches Affordable?
Swatch watches are affordable due to:
- In-house production
- High automation
- Creative use of materials
- Leveraging within the Swatch Group
- It’s target market.
Swatch is one of the few watch companies that say they make their watches.
When you make things in-house, you have complete control over the process. As a result, you have many chances to improve efficiency and cut down on waste.
For instance, you could move the workshops that make different watch parts and put them near the assembly plant.
Decisions like this save time and money because part makers can send watch parts quickly to assembly lines. If any parts are broken, the assembly plant can quickly send them back to the workshops to be fixed.
Compare that to a situation where your third-party contractor is hundreds of miles away and parts sent to them take at least 1-2 days to arrive.
Swatch can lower its production costs by doing things like this, despite manufacturing its watches in Switzerland. As a result, Swatch can sell watches for less and still make a profit.
Swatch is also known to use a high degree of automation in watch production. Swatch is known to have pioneered the Sistem51, a fully robot-assembled automatic movement.
With robotic assembly, cost savings could be further increased, as robots would be cheaper to maintain than paying assembly staff hourly wages.
Robots could also work with better consistency and accuracy, resulting in fewer watches rejected over quality issues.
Creative Use Of Materials
Swatch can also keep its watch prices low by using materials creatively to keep production costs low.
For example, they use mineral crystals instead of using sapphire crystals with an anti-reflective coating in all of their watches. Some watches even receive acrylic crystals.
ALSO READ: Types of Watch Crystals
Perhaps the reasoning is that most people don’t know the difference between mineral and sapphire crystal, but they can see the lower price tag.
Furthermore, replacing sapphire with mineral crystals does not affect the watch’s external appearance; it still looks well designed and great on the wrist.
Swatch, however, does not skimp on the crucial parts of their watches, such as dials and movements.
There are no ‘creative substitutions’ here, just great, legendary Swatch in-house movements and well-designed and made dials.
Leveraging With Brands with Swatch Group
Swatch can also keep its watch prices low by leveraging its partnership with the Swatch Group’s sister brands.
Swatch Group owns many watch brands, from luxury watches such as Breguet and Omega to middle and affordable watch brands like Tissot or FlikFlak. Swatch Group also owns ETA, one of Switzerland’s top movement manufacturers.
Because they are under the same umbrella, they can benefit from each other in various ways.
These watch brands, for example, can pool their watch movement orders and have ETA manufacture them in one large batch. ETA, in turn, has opportunities to streamline production better and reduce production costs.
The same concept could be applied to the production of watch straps, cases, and various other items, allowing for additional savings and lower production costs.
These companies could also pool their marketing and after-sales service resources to reduce costs and provide better services to customers.
Their efforts, in turn, give you a better price and savings.
Swatch’s Target Market
Finally, Swatch watches are inexpensive because they are not intended to be sold at a premium in the first place.
For example, if they can get watches with similar style and features and save $5 by purchasing a Casio rather than a Festina, they will choose the Casio.
Swatch must keep watch prices low and offer better features to remain competitive in this segment. As a result, Swatch is usually sold at an affordable price.
Is Swatch Really Swiss Made?
Swatch watches are really Swiss Made, as all Swatch watches carry the ‘Swiss Made’ label on their dial or caseback. By Swiss law, a watch can only use the Swiss Made label if 60% of the cost of production is incurred in Switzerland.
Swatch claims that all their watches are Swiss Made. By making such claims, it means Swatch fulfills the requirements for a Swiss Made watch:
- Switzerland accounts for 60% of the total value of the watch’s production (design, manufacturing, parts, etc.)
- A Swiss movement is used in the watch.
- The watch is encased and inspected in Switzerland before being shipped.
However, to claim that Swatch is 100% Swiss-made can be a stretch, as Swatch does have manufacturing facilities outside of Switzerland, such as in China, Malaysia, and Thailand.
However, these facilities make only minor parts and do not cause the watch to lose its Swiss Made label.
Why Are Swatch Watches Called Swatch?
Swatch is a short form for Second Watch. Swatch’s founding philosophy is to be a secondary, fashionable, and disposable watch. As a result, Swatch watches are fashionable and affordable.
Swatch is founded on producing fun, fashionable and disposable watches. It was also founded as a response to the domination of cheap Japanese quartz watches in the 1970s and 1980s.
Cheap Japanese quartz watches from Seiko and Citizen brands flooded the market. It caused many Swiss watch companies to close down or merge, a period known as the Quartz Crisis.
Swatch keeps the watch robust and straightforward. Swatch watches usually run quartz movement and use materials such as resin, silicone, or rubber to be durable.
On top of that, the watches are sold cheaply as well.
As a result, consumers can treat Swatch watches like a ‘beater.’ They buy, wear them down, and dispose of them when it breaks down.
Do Swatches Last?
With care, Swatch watches can last a long time. Swatch is built to be ‘fashionable beaters,’ tough, durable, and easy to upkeep. Swatches only need battery changes with regular use, once every few years.
Swatch watches are built to be ‘fashionable beaters.’ They look lovely and fashionable and are technologically simple to allow easy maintenance.
For example, most Swatch watches run quartz instead of automatic movement.
Swatch and sell the watches cheaply by keeping things simple, turning them into a true beater. A customer can buy a cheap Swatch, wear it down, and dispose of it when it finally breaks down.
Swatch’s simple construction also allows it to be upkeep easily, meaning the watch can last a long time with care.
Perhaps the only regular maintenance needed is a battery change once every few years.