Counterfeiting, Piracy and the Swiss Economy 2025

4.  Counterfeit Swiss watches: An analysis of trade and sectoral losses

This section offers a dedicated analysis of the Swiss watchmaking sector given its exceptional exposure to intellectual property rights (IPR) infringements on a global scale. While the previous chapters grouped watches with jewellery—both of which are high-value sectors commonly targeted by counterfeiters—this aggregation can obscure the specific vulnerabilities of the watch industry. Jewellery, as a broader category, often includes a wider variety of products with significantly higher total sales volumes. This difference in scale potentially underestimatesg the relative and absolute impact of counterfeiting on the watch sector specifically.

Disaggregating watchmaking from jewellery provides a clearer and more accurate view of the risks and losses faced by this iconic Swiss industry. It allows for a more representative assessment of the sector’s exposure to illicit trade, including the financial losses incurred, impact on employment, and the broader implications for brand reputation and consumer trust.

Moreover, the watchmaking sector holds a unique place within the Swiss economy. Beyond its economic contribution in terms of exports and jobs, Swiss watchmaking embodies national identity and craftsmanship, making it a high-profile target for counterfeiters and thereby amplifing the reputational risks posed by imitations. A dedicated focus on this sector is thus essential to understand the quantitative and qualitative dimensions of the threat posed by counterfeiting, and to inform targeted policy responses.

4.1. Scope and volume

Swiss watches are internationally recognised for their precision and craftsmanship. Their reputation makes them prime targets for counterfeiters. The rise of e-commerce has intensified the issue by creating new distribution channels for counterfeit watches across global markets. The digital environment facilitates anonymity and reduces the psychological barriers of knowingly purchasing fake products. Consumers may be misled or, in some cases, willingly take the risk, as online transactions are often purcased in isolation.

For counterfeiters, this environment is particularly attractive as it makes the illicit business more profitable. With online sales, the financial burden has shifted: when counterfeit goods are seized at the border, the consumer—having already paid—is the one who bears the loss.

Switzerland is particularly impacted by this trend. Between 2020 and 2021, 52% of global customs seizures of counterfeit watches concerned Swiss rights holders. In 2021 alone, the estimated value of fake watches infringing Swiss brands amounted to USD 1.88 billion, representing over 40% of the total value of counterfeit goods infringing Swiss intellectual property. This corresponds to 7.7% of the value of Switzerland’s legitimate watch exports for that same year.

Seizure data also show that counterfeit watches that violate Swiss IPR are highly diverse, with numerous models and brands copied. According to experts from the Federation of the Swiss Watch Industry (FH), the quality of these counterfeits varies widely—from poor imitations to near-identical replicas—depending on the target markets.

4.2. Trade routes

The primary provenance economies for seized counterfeit watches infringing Swiss IPR closely align with those identified in the broader trade of counterfeit goods violating Swiss IPRs. This similarity is to be expected, given that counterfeit Swiss watches represent a significant share of the overall trade in counterfeits that target Swiss brands.

China was by far the leading source of fake watches infringing Swiss IPR, accounting for nearly 54% of seizures recorded in 2020–2021, followed by Hong Kong (China) and the Netherlands with approximately 11% each (Figure 4.1). In terms of the total value of seized counterfeit watches, China and Hong Kong (China) accounted for 84% of the total estimated value of counterfeit Swiss watches seized during the same period. This underscores their central role in the global distribution of counterfeit watches that violate Swiss IPR.

Figure 4.1. Top provenance economies for seized watches infringing Swiss IPR, 2020-21

Source: OECD global customs seizure.

Descriptive statistics on the most intensive trade routes indicate that the majority of counterfeit watches infringing Swiss IPR were exported to the United States from China, Hong Kong (China), and the Netherlands (Figure 4.2). Within the European Union, Germany, Austria, and the Netherlands were the main destination economies for these illicit goods.

Figure 4.2 highlights the role of the Netherlands as a transit hub in the trade of counterfeit goods infringing Swiss IPR. The country appears both as a source and destination in seizures of fake Swiss watches, reflecting its position as a key hub for the trafficking of counterfeit products. This demonstrates the complexity of distribution networks and the importance of transit hubs in facilitating the international flow of counterfeit products.

Figure 4.2. Top provenance-destination economies for seized counterfeit watches infringing Swiss IPRs, 2020-21

As a share of number of global customs seizures

Source: OECD global customs seizure.

4.3. Transport methods

Figure 4.3 illustrates the transport modes used to ship counterfeit watches infringing Swiss IPRs, focusing on the main provenance economies.

The data reveals the predominance of postal services in the shipment of these counterfeit goods during the 2020–2021 period. Postal shipments were the primary mode of transport for four of the six main economies of origin.

In addition, air transport played a significant role in the trade of counterfeit Swiss watches. This mode was notably used for goods originating from Hong Kong (China) and Malaysia, highlighting its relevance in the international movement of these illegal products.

Figure 4.3. Transport modes for exports of seized counterfeit watches infringing Swiss IPRs, by top provenance economies, 2020-21

In terms of number of seizures

Source: OECD global customs seizure.

4.4. The case of Swiss watchmaking

4.4.1. Short-term economic impact: A closer look at watches

In quantitative terms, the economic damage caused by counterfeiting in the Swiss watch sector is considerable. In 2021, counterfeiting of Swiss-branded watches resulted in estimated sales losses of USD 1.08 billion—equivalent to 4.2% of the sector’s total sales for that year. These losses were accompanied by the destruction of approximately 2 537 jobs, corresponding to 4.5% of total employment in the watches industry. These figures clearly demonstrate the tangible threat that counterfeiting poses to one of Switzerland’s most emblematic and economically significant sectors.

It is essential to interpret these figures within the broader context of enforcement challenges. Notably, the COVID-19 pandemic led to a temporary reduction in seizure activity as customs and law enforcement agencies reallocated resources toward pandemic-related tasks (OECD/EUIPO, 2024[7]). At the same time, the growing complexity of international trade routes, the widespread use of intermediaries, and the exponential rise in small parcel shipments linked to e-commerce have made the detection of counterfeit goods increasingly difficult. These dynamics have created new blind spots in enforcement systems, which counterfeiters have been quick to exploit.

4.4.2. Beyond the numbers: The broader impact of counterfeiting on the Swiss economy

This analysis focuses primarily on estimating the short-term economic impacts of counterfeiting, particularly in terms of lost sales, employment effects, and tax revenue foregone. The economic consequences are significant and measurable. However, it is important to acknowledge that counterfeiting also generates a wide range of medium- and long-term impacts that are more difficult to quantify due to data limitations. These include increased public spending on unemployment benefits, reduced investment in innovation, and weakened competitiveness over time. Although not covered quantitatively in this report, such effects contribute to a broader erosion of economic resilience and institutional credibility.

In parallel, trade in counterfeit goods imposes considerable environmental and social costs. The production of counterfeit goods often circumvents safety, labour, and environmental regulations, leading to hazardous working conditions, increased pollution, and the proliferation of low-quality, potentially unsafe products. These externalities are not captured in standard trade or tax data, but are no less damaging to the broader public interest. The absence of these dimensions from quantitative analyses should not be mistaken for irrelevance; rather, it reflects the complexity and opacity of illicit supply chains and the urgent need for further interdisciplinary research.

Among the many consequences of counterfeiting, reputational risk stands out as particularly harmful for sectors built on trust, quality, and brand value. The widespread presence of counterfeit Swiss watches in global markets undermines consumer confidence and damages brand integrity. During consultations for this report, a representative from the Federation of the Swiss Watch Industry (FH) noted that many Swiss watch brands regularly receive complaints from consumers who unknowingly purchased fake watches. Disturbingly, these consumers often blame the brands themselves, expecting them to guarantee product authenticity regardless of the point of purchase. This misplaced expectation further erodes trust and places additional burdens on legitimate businesses.

These reputational risks reinforce the importance of well-designed consumer awareness campaigns. Public education initiatives that explain how counterfeit networks operate and offer tools to identify fraudulent products are crucial. Such campaigns not only empower consumers to make informed choices, but serve to preserve the overall integrity and prestige of the Swiss watch industry.

4.4.3. The Federation of the Swiss Watch Industry (FH)

In response to these evolving threats, the Federation of the Swiss Watch Industry (FH) plays a critical role in safeguarding the sector. Its activities are multifaceted, combining prevention, enforcement, legal advocacy, and public outreach. FH works closely with national and international authorities, including customs and law enforcement agencies, to support operational efforts to intercept counterfeit goods. By providing technical expertise, specialised training, and access to product authentication tools, the FH enhances the capacity of enforcement agencies to identify and seize fakes—both at physical borders and in digital environments.

In addition, the FH leads consumer awareness campaigns designed to inform the public about the risks and consequences of purchasing counterfeit products (Box 4.1). These initiatives are essential in reinforcing consumer trust and protecting brand reputation.

The FH is active in the legal domain, engaging in policy advocacy to strengthen IPR laws and enforcement mechanisms both at the national and international levels. It continuously monitors online platforms to detect counterfeit listings and co-operates directly with digital marketplaces to have infringing content removed.

Through this comprehensive set of actions, the Federation of the Swiss Watch Industry contributes significantly to protecting the prestige, innovation, and global market position of Swiss watchmaking. Its work illustrates the importance of co-ordinated, multi-level responses to counter the growing threat of counterfeiting in a globalised, digital economy.

Box 4.1. The Federation of Swiss Watch Industry (FH) awareness initiatives to safeguard Swiss watchmaking

Raising consumer awareness is a key element of the Swiss watch industry’s strategy to combat counterfeiting. The Federation of the Swiss Watch Industry has taken a proactive role in this area, launching a series of targeted awareness campaigns to inform the public about the risks and consequences associated with purchasing counterfeit watches. These campaigns aim to reduce demand for fake goods by equipping consumers with the necessary knowledge to make informed purchasing decisions.

A central feature of these initiatives has been the development of high-quality training content. The FH has produced brochures, guides, and short videos to explain how to distinguish genuine Swiss watches from counterfeits. These materials go beyond identifying fake products by highlighting the broader consequences of counterfeiting, including its links to organised crime, its undermining of fair competition, and its negative impact on employment, innovation, and investment in the legitimate economy.

To ensure wide dissemination, the FH has adopted a multi-platform communication strategy. Educational materials are distributed through online channels and industry trade fairs. This approach enables campaigns to reach not only end consumers, but sales professionals and distributors who play a key role in shaping market behaviour.

FH is also active online with its reporting notification form, available at https://www.fhs.swiss/eng/report-abuse.html and raises awareness by publishing awareness messages on seized domains. The Federation of the Swiss Watch Industry (FH) is also actively involved in consumer awareness campaigns conducted under the Stop Piracy initiative, a Swiss public-private platform dedicated to combating counterfeiting and piracy through prevention, coordination, and public outreach.

Through these awareness campaigns, the FH contributes not only to protecting its members’ intellectual property but to building a culture of respect for authenticity and lawful commerce. These efforts complement enforcement and policy initiatives and serve as an important example of industry leadership in the global fight against illicit trade.