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LONDON — The Swiss watch industry’s tribulations in 2016 were well documented: Demand in China drifted as the government’s corruption crackdown continued, terror attacks in Europe cut into tourism and luxury retail, and currency fluctuations produced a stronger Swiss franc and dollar. It all contributed to an 8 percent decline in watch sales year-over-year, after a decade of double-digit growth.

But where has that left fashion watches, the timepieces created by luxury brands? Many of these companies have spent millions in recent years to develop evermore complex mechanisms and sophisticated designs to replace the combination of quartz movements and prominent logos that once prevailed.

“The watch brands that are successful today are brands that have made the transition from being watch brands to international luxury brands — but you can pretty much count them on one hand,” said Wei Koh, founder and editorial director at Revolution, the Singapore-based watch magazine, listing Audemars Piguet, Richard Mille, Hublot, Rolex and Patek Philippe. “Based on that, the potential of fashion brands to have dominant position in the watch market is extremely high.”

Fashion houses still have a way to go in capturing market share but, Mr. Koh noted, their brand visibility is a valuable asset that even the biggest Swiss players have been unable to match.

For example, the global value of brands like Louis Vuitton and Chanel continued to rise, while Rolex declined, according to a report published in June 2016 by the communications services group WPP and its research agency Millward Brown.

That report, 2016 BrandZ Top 100 Global Brands, named Louis Vuitton the world’s most valuable luxury name, with a value of $28.5 billion, up 4 percent in the six months to February 2016 from the year-ago period. Brand value, according to the report, was determined by a combination of financial information and a customer perception assessment based on three million consumer interviews.

Hermès took second place in the luxury category, with a 5 percent increase, to a value of $19.8 billion. And Chanel achieved the highest growth figure, rising 15 percent in that period, to $10.3 billion. In contrast, Rolex, the only Swiss watch brand named in the report, saw a 4 percent decline in brand value, to $8.2 billion.

Part of the problem facing many traditional Swiss watch brands is that they lack direct contact with the customer, working instead through distributors and retailers, “which makes it hard to connect to their customers and react to trends,” said Claudia D’Arpizio, partner at Bain & Company and author of Bain’s Luxury Goods Worldwide Market Study.

Also, she said, “Many of the traditional Swiss watch brands are very much skewed toward a male customer base, a very traditional and classic customer, and they are struggling with the young generation.”

Bain’s report, released in December, found that global sales of personal luxury goods remained relatively flat at €249 billion, making it one of the sector’s most difficult years in recent memory. But this figure is distinctly positive when compared with the report’s findings on the sales decline in the luxury watch category

Ms. D’Arpizio said that fashion houses are better equipped to target “powerful women, who are more and more acting like men in their search for watches.”

That view was echoed by Laurent Dordet, chief executive of La Montre Hermès, the French fashion house’s watchmaking division. “In the past, women were buying watches more for the aesthetics, the diamonds and precious materials,” he said. “Now, they are also looking at the movement and the technical expertise. Women are indeed better informed and have become increasingly fascinated by mechanical watches.”

Some Swiss watchmakers have been slow to seize new retail opportunities, too.

Richemont, which includes Vacheron Constantin, Jaeger-LeCoultre and Montblanc among its brands, acquired the online e-tailer Net-a-Porter Group in 2010. But it wasn’t until last November that the first of the luxury conglomerate’s fine watch brands, IWC Schaffhausen, made it onto the group’s Mr Porter retail site.

“That was a huge missed opportunity,” Mr. Koh said. “Not simply to sell watches, but through Net-a-Porter’s online editorials there is an amazing ability to communicate and create awareness around your brand, and plant your brand in the imagination of every luxury e-commerce end user in the world.”

Some Swiss brands sell online through sites like Watches of Switzerland, but none of the major names sell through their own branded site. (In contrast, many fashion houses, including Dior and Hermès, have sold watches online for several years, through their own sites as well as other e-tailers.)

David Sadigh, founder and chief executive of the Digital Luxury Group, a marketing and research company, agreed with Mr. Koh’s assessment. “Digital and retail will be the key battlegrounds for watch brands to win new clients,” he said, noting that Chanel’s 18.3 million followers on Instagram provide a strong competitive advantage over watch heavyweights like Rolex (3.2 million followers) and Omega (1 million).

But when it comes to stealing market share from the established watch brands, fashion houses still fall short, Mr. Sadigh said, noting that brands like Rolex, Cartier and Omega lead the women’s segment by large margins.

The Rolex company’s global market share in terms of retail value was 8.3 percent in 2015. Chanel’s share was 0.75 percent, according to Euromonitor’s 2016 luxury watch report.

“But Chanel showed with its J12 that it can generate significant revenues, and margin, with watches,” Mr. Sadigh added, referring to the ceramic watch introduced in 2000 that cemented the house’s position as a serious player in horology. “Traditional watchmakers should be smart not to underestimate the potential of the global fashion houses.”

In recent years, many luxury brands and fashion houses have opened state-of-the-art manufacturing facilities in Switzerland’s watchmaking heartland, to create products with integrity, even from a watch connoisseur’s perspective. Their priorities have been on making their own movements and protecting their intellectual property.

“Anyone can create a good-looking watch with a quartz movement,” Mr. Sadigh said. “Mastering craftsmanship and creating in-house movements is a different ballgame, one that creates more exclusivity. The Diors and Louis Vuittons know that they have the fashion box ticked, and that by also adding some watchmaking clout, they can open themselves to a new demographic who want a respected watch, while not giving up on their expression of personal style.”

Watches in fashion

BULGARI The Octo Finissimo Minute Repeater, introduced at Baselworld last year, is just 1.95 millimeters wide, making it one of the slimmest minute repeaters ever to go into production. “It might polarize people, but at least it’s got a strong perspective,” said Mr. Koh of the watch magazine Revolution. “Every single component of that watch is Bulgari-owned, and that has enabled them to make a watch that no one else can.”

CHANEL The Monsieur de Chanel, also introduced in 2016, provided several firsts for Chanel: It was the house’s first watch created for men; it featured the company’s first movement made in-house, the Calibre 1; and it was the first timepiece created entirely at the company’s assembly plant in La Chaux-de-Fonds, Switzerland.

CHRISTIAN DIOR It occupies an aesthetically frothy (but still impressive) position in the fashion watch universe. The latest incarnation of the Dior VIII Grand Bal Plume, introduced in January to celebrate the Chinese Year of the Rooster, explicitly attempted to combine haute horology with haute couture. The patented calibre featured an oscillating weight on the dial set with white feathers and diamonds, resembling the swirling skirt of a ball gown.

FABERGÉ Best known for its jewel-encrusted eggs, the house has released two watch models, one for women and one for men, which won prizes at the Grand Prix d’Horlogerie de Genève in 2015 and 2016 respectively.

TOM FORD In January the designer announced a forthcoming line of luxury timepieces. They will be made in collaboration with the Bedrock Manufacturing Company, parent of Shinola. There is no release date yet, but the company said the timepieces will be produced in Switzerland and sold at a luxury price point.

HERMÈS In 2015, it introduced the critically acclaimed Slim d’Hermès, the house’s first timepiece fully developed in-house: strap, case, movement, dial, everything. A second version is being presented at Baselworld this month. Since 2006, Hermès has sunk capital into acquiring factories and component manufacturers in Switzerland’s watchmaking center, including the movement manufacturer Vaucher. “It has brought legitimacy to this métier,” said Mr. Dordet, the chief of the company’s watch unit. “Clients have seen that, as with other Hermès objects, Hermès watches are created and produced with high standards, genuinely mastering craftsmanship and know-how at the highest degree of excellence.”

RALPH LAUREN Ralph Lauren Watches, part of the Richemont luxury group, recently introduced its Automotive Tourbillon. The timepiece is intended to combine the house’s luxury cowboy image with Swiss watchmaking virtuosity.

LOUIS VUITTON The fashion house introduced its ultra-skeletonized Flying Tourbillon to great fanfare in January 2016. It was the first watch made by the company to receive the Poinçon de Genève, the seal that indicates quality craftsmanship and timekeeping standards for watches made in Geneva.