Swiss watch exports to China recover

Swatch Group Chief Executive Nick Hayek has said he expects double-digit percentage sales growth this year on the back of an improvement in demand in China.

JP Morgan Cazenove analyst Melanie Flouquet said in a note that Hayek told analysts on a call on Wednesday that demand from the Chinese mainland may have turned a corner, notably thanks to increasing consumption by China's middle classes.

With its Longines and Tissot brands, the world's biggest watchmaker has a significant exposure to the mid- and entry-price segment. Chinese demand for Longines and Tissot watches remained strong throughout 2013, Swatch said.

"China's new president Xi Jinping's tough stance on corruption practices and extravagant spending is likely to limit any recovery of the illegitimate component of luxury demand this year," Chauvet said, adding this was likely to have a greater impact on the high-end than the mid-range segment.

Swatch Group makes 37 percent of its revenue in the Chinese mainland, Hong Kong and Macao, while Cartier-owner Richemont generates 29 percent of its sales there.