What's going on?

Swatch, the world�s largest watchmaker, reported rosy earnings for the first half of 2017 and forecasted good times ahead, after a long slump in the Swiss watchmaking industry.

What does this mean?

Last year marked one of the worst years in recent memory for Swiss watchmakers, the world�s largest exporter of watches by value. Their overall sales plummeted by over 10% in 2016, following a massive campaign to crack down on corruption in China (high-end Swiss watches are well known as bribes for political influence within China�s political elite � yup, that was big enough to influence their sales).

However, according to Swatch�s CEO, that downturn might be coming to an end both for the company and the market at large. Swatch�s sales in China (probably its most important market right now) grew by around 10% in the first six months of 2017 compared to last year, and they�re forecasted to accelerate both there and in the Middle East through 2017.

Why should I care?

For markets: Swatch�s stock is performing well this year.

Swatch�s stock rose by about 2% on Friday�s news and altogether the stock has gained almost 40% versus a year ago. Alongside Swatch�s boost to sales, encouraging news about the recovery of the Swiss watchmaking industry has likely given investors more confidence in the company.

The bigger picture: Swatch has also contended with changes in the watch industry.

Besides its luxury offering, Swatch is well known for more reasonably priced watches. A possible threat to that business has been posed by smartwatches like the Apple Watch, and Swatch has replied to the competition by outfitting some of its consumer watches with digital add-ons like card payment technology. While it�s very openly promised not to become a consumer tech company like Apple, Swatch knows that evolution is needed for success (it�s part of the company�s founding history as quartz watches came out in the 1970s).