2. Industry Overview
- India is an under penetrated market for watches
-
- 27% of Indians own a watch
- Total estimated market as of 2005
-
- Value: Rs 2328 crores (USD 530 Mn)
- Vast proportion of the Indian market is below Rs 500
- Market has been split into low end, mass market, mid market,
premium
3. Major Players 4. HMT
- First major watch manufacturer in India and undisputed market
leader till the entry of Titan
- Offshoot of Indias self-reliance and import substitution
concept
- Main quality offered sturdiness and reliability
- As a market leader very few aggressive advertisement
campaign
- No new advertisement drive in recent years
- Still holds a small market share among the old faithful
loyal
- Lack of new and trendy design has led to erosion of value among
the new generation
5. Titan
- A joint venture between the Tata group and the Tamil Nadu
Industrial Development Corporation
- Titan is today worlds sixth largest, integrated watch
manufacturer and Indias largest
- 4 factories - main watch and jewellery plants in Hosur near
Bangalore ( Indias Silicon valley), Watch Assembly plants at
Dehradun and in Himachal Pradesh, with an ECB plant in Goa
- Investment of over US$130 million. A 450,000 sq.ft.
state-of-the-art facility
6. Titan
- Leader in the watch and jewellery businesses in India
-
- First and largest branded player in the jewellery
(Tanishq)
-
- >50% share of the organized watch market
-
- Over 60million watches sold across 30 countries
- Brands offered: Steel, Edge, Raga, Sonata, Fasttrack, Regalia,
Bandhan, Sonata, Nebula, Flip
- Recently Titan has taken a drive to improve its image as a
maker of contemporary style and design in wrist watches
- Titan is trying to offer international quality/style at
anaffordable price
7. Time Products Division BusinessFinancial
-
-
- Only profitable watch company in India
-
-
- 50% of volume, 65% of value of organized industry
-
-
- Most admired consumer durable company (A&M magazine),
Superbrand 2003, Brand Equity Award (PHDCCI), Images Fashion
Award
-
-
- Established two brands Titan and Sonata
-
-
- Widespread, visible and profitable retail and customer service
chains(~7250 retail outlets in 1800 towns, 165 exclusive showrooms,
600 service centres)
-
-
- Distributed in 30 countries
-
- Large customer base - more than 60 million consumers
-
- Efficient support system - integrated manufacturing facilities,
strong vendor base ( ~800 strong vendor base)
8. Timex
- The main focus is on reflecting asportyand fashionablelook for
the men
- In theladies segment it is offeringhighly stylized bangle
bracelet watch that are sleek and sophisticated
- The advertising campaign aims at focusing onpower, precision
and timing
- Used Brett Lee as brand ambassador
9. Other Players
- Mainly Rado, Tommy Hilfiger and Evidenza from Longines
- Tommy Hilfiger is positioned in the mid and premium segment
while the other two players are in the luxury segment
- Trying tocatch the upmarket, urban, western-minded youth
- Also offer a sense of exclusivity and style as their products
are distributed through some selected outlets
- Using high society and stylish brand ambassadors such as
Shahrukh Khan, Aishwarya Rai, Yana Gupta, Lisa Ray
10. Segmentation 11. The Watch Market in India (by value 06-07)
Mass (< Rs 400) Valued at Rs 300 crores Grey market, Chinese,
etc. Premium (> Rs 5k) Valued at Rs 370 crores Swiss brands:
Tissot, Omega, Rolex Fashion brands: Fossil, Calvin Klein,Giordano,
Esprit Mid-upper (Rs 1k-5k) Valued at Rs 938 crores Titan ,
Citizen, Timex,Swatch, Espirit Low-end (Rs 400-1000) Valued at Rs
1200 crores Sonata , HMT, Maxima 12. Volumes Growth, Driven by Low
End Volume of watches sold CAGR, % 4-7 Source:IRS 95,99,01, NCAER
95,00; internal data; press clippings; interviews; market visits;
annual reports 25-35 3.7 0.015 0.05 8-11 8-11 12.0 9.3 7.5
Mid-upper Luxury Low-end Mass
-
- Market implications from 01-02 to 06-07
-
- Overall volume growth significantly driven by low-end and mass
market
-
- Mid-upper category growing at 7%, largely driven by Titan
9.5 3.9 13.5-16 17.5-20 4.5-5.2 0.22 8-10 ~21 mn ~25 mn ~35-40
mn 300 crs 1200 crs 850 crs 375 crs 2700 crs Tissot, Omega, Rolex
Titan, Citizen, Timex, Swatch, Espirit Sonata, HMT, Maxima Grey
mkt,Chinese, etc. BRANDS 13. Titan Citizen Timex Watch Market Map
500 1000 2000 4000 5000 20,000 + Formal/Classic Fashion/Sporty
Sonata,HMT, Maxima Espirit, SwatchFossilGiordano,DKNY,Carrera Tommy
Hilfiger, Accent Raymond Weil Tissot Omega, Rado, Longines Tag
Heuer, Hugo Boss, C Dior Price Fastrack XYLYS 10000 Nebula 14. The
Emerging Trends 15. Demographic patternEffect Enablers Outcome
Consumption of lifestyle items Consumerization of Urban India
Rising % of youngpopulation Increase in income levels Changing
spending pattern Morenumberof working women Increase inspending
power Rising aspiration levels Organized retail market at USD 21.5
billion by 2010 (CAGR 31%) Increasedsize ofurban population 16.
Effect Enablers Outcome Significant new opportunity from young
urban indian consumers YULICS ! Two third ofIndians are below 30
yrs Median age is 24 (35 in US,41 in Japan) Urban growthat 3% vs 1%
overall Youth growing four times faster82 million at20-34 age in
2006 Liberalized population willbe 56% in 2011 (41% in 2001)
Demographic patterns 17. Urban Households Increasing exposure of
middle class creates new opportunities 18. The Flow of Money By
2009-10 lower income group falls; higher income doubles 19. Watch
Industry in India: Where is it heading? 20. Forces Transforming
Indian Watch Industry Dramatic Transformation of the Indian watch
market
- Shift in structure of demand
-
- Volume growth driven by the low end
-
- Value growth driven by luxury segment
Brands Titan and Sonata
- Emergence of distinct consumer segments
-
- Sharply defined consumer segmentsaround distinct buying
factors
-
- More awareness of brands and global trends among affluent urban
consumers
Sub-branding strategy: Raga, Fastrack, Nebula
- Exploring new brand for luxury segment
- Licensing: Tommy Hilfiger watches
-
- Significant increase in competition in all segments
-
-
- Luxury end : Swiss brands
-
-
- Mid to upper end : Global fashion/ Japanese brands
-
-
- Low end : Local/regional IMFQs,Chinese imports
2. More global and local players Dominant retail presence: World
of Titan Showrooms, TimeZones
- 4.Emergence of new channels
-
- New retail outlets emerging (Dept. stores/malls)
-
- Existing outlets (MBOs) getting smarter looking
-
- Unorganised retail at low-end
21. The Road Ahead
- Incorporating new functionalities in the wrist watch with the
help of new technology
-
- Spot watches which offer advanced features such as automatic
time adjustment based on location, access to continually updated
content such as news, traffic alerts, weather reports, stock
quotes, sports scores and instant messaging.
-
- The Times Data Link watch utilizes a revolutionary new
communications technology that literally zaps information from
personal computer (PC) to watch.
-
- IBM Linux-based wrist watch.
22. The Road Ahead
-
- Huge size of the rural market.
-
- As tele-density and infrastructure of the rural India improves,
it offers scope for sophisticated form of advertising and method of
sales.
-
- Launch of Sonata range of watches by Titan in the rural market
has met with great response from the buyers in rural and semi-urban
India.
-
- Indian rural bazaar is displaying a market trend towards
consumerism and demand for durable products.
23. Agenda
24. The Watch Industry Evolution
- Conventional watches standard spring powered watch
- Conventional watch evolved into electronic watch
-
- Jewelled lever watches (complex and expensive)
-
- Pin lever watches (recent development)
- New generation watches evolved from electric watch to Tuning
Fork watch and ultimately settle at Quartz Crystal electronic
watch
- Major players Switzerland, Japan and United States
- 60% Quartz, 27% Digital, 13% Mechanical
- Source : Segmentation of the Indian Watch Market Y.L.R.
Moorthi, IIMB
25. The Watch Industry Global Perspective
-
- Specialization in component manufacturing and watch
assembling
-
- Competitive advantage mechanical watches
-
- Undisputed leaders till 70s (42% volume share and 78% value
share)
-
- First electronic watch invented by Max Hetzel, a Swiss Engineer
in 1954
-
- Took advantage of the quartz and digital technology
-
- Carved out a strong position in the world watch industry
-
-
- Brand image based on quartz technology and accuracy
-
-
- Mass production which led to lower prices
26. The Watch Industry Global Perspective(Contd.)
-
- Had some presence till 1970
-
- Post 1970, some chip manufacturers entered as suppliers of
components
-
- By 1980s most of them disappeared due to fierce competition
from Japan and Hong Kong
-
- Entered the world watch scene in 1976
-
- Japan biggest supplier of movements
27. Indian Watch Industry Evolution
- 1960: Indian Watch Industry came into being.Govt. took the
decision to set up the countrys first watch factory
- 1961: HMT set up Indias first watch factory at Bangalore in
collaboration with Citizen of Japan
- 1981: Hyderabad Allwyn Limited entered the watch industry in
collaboration with Seiko of Japan
- 1984: The beginning of a new era - entry of Titan, the Tata
TIDCO joint sector company
- 1990: Timex enters the Indian market in partnership with Titan,
targeting the lower price segment
- 1997: Timex breaks away from Titan - increasing the already
fierce competition
28. Indian Watch Industry Evolution (Contd.)
-
- Reserved the manufacture of straps and dials to the small scale
industry
-
- Imposed restrictions on import & manufacture of ECBs
-
- Until the mid 1980s the industry was predominantly producing
mechanical watches.
-
- Total demand for watches greater than supply the gap in demand
being met by smuggled watches unorganized sector
29. Indian Watch Industry Trends
- Rapid increase in target audience
- Rise of consumerism and purchasing power of the middle
class
- Bulk of the demand exists in lower and middle segments
- Newer segments jewellery segment, etc.
- Rise of demand of trendy watches
30. Indian Watch Industry Price Segmentation
- Source : Segmentation of the Indian Watch Market Y.L.R.
Moorthi, IIMB
22% Rs 3000 Super-Premium 18% Rs 1200 Premium 15% Rs 750 Popular
11% Rs 450 Mass Market Margin (estimated) Average Price Segment 31.
Consumer Behaviour
- Transition from mere time keeping device with functional
benefits like durability, toughness and economy to a personal wear
reflecting peoples lifestyle and aspirations
- Durability and utility are important aspects
- Aesthetic appeal and trendy designs are very important
- Brand Name continues to be an important driver in the customers
mind
- Availability in different segments and for different occasions
makes the watch a suitable gift item
32. Major Players
- Titan Industries Ltd. (39%)
33. HMT Ltd.
- HMT Limited was established in 1953 in technical collaboration
with M/s. Oerlikon of Switzerland
- Product range includes Machine Tools, Watches, Tractors,
Printing Machines among others
- HMT started manufacturing Wrist Watches since 1962
- Technical collaboration with Citizen, Japan
- 4 integrated manufacturing units
- More than 7 million high quality watches/watch movements per
annum
- Mechanical and Quartz watches
- HMT Watch manufacturing units ISO-9001 certified
- Source: http://www.indiainfoline.com
34.
- Mechanical Watches - Environment friendly
-
- Hand wound: Ladies, Gents
-
- Lalit: Ladies, Gents, Pairs
HMT Ltd. - Brands
35. HMT Ltd. Strategies
- Targeted the global market
- State-of-the-art technologies IT Infrastructure
- Collaboration with ISA Quartz, France and Fraporlux, France
apart from Citizen, Japan
36. HMT Ltd. Positioning
- Positioning based on age, sex, competition
- First watch company to launch watches for children
- Utsav to compete with Titan Raga
-
- Bracelets, Jewellery and Bangles
37. HMT Ltd. Distribution
- Manufacturer Dealer Retailer Customer
- Established a strong distributor network of 10,000 distributors
and 50,000 retail outlets
- 1990: Followed Titan in introducing C&F Agents
38. HMT Ltd. Advertising
- Catchy slogan If you have the inclination, we have the
Time
- Portrayed nationalistic instincts
-
- Timekeepers to the Nation
39. Titan Industries Ltd.
- Titan Industries Ltd. set up in 1987
- Joint venture of the Tata Group and TIDCO
-
- Manufactured quartz analog electronic watches
- Financial and technical collaboration with Ebauches,
France
- 1988: Estd. a component manufacturing facility
- 1990: Estd. a case manufacturing plant
- 1992: Integrated backwards to manufacture step motors
-
- To manufacture electronic circuit blocks
- Annually markets over 7 million watches
-
- 6th largest globally in the category of manufacturer
brands
40. Titan Industries Ltd. Brands
-
- Made with high-grade anti-allergenic steel, scratch-resistant
sapphire crystal and special hard gold plating
-
- Sports & Multi-functional watches
-
- Magic in gold and unique futuristic material
-
- Combines the sturdiness of steel with the richness of gold
-
- Exclusive watches for women
-
- Contemporary styles for the young
41. Titan Industries Ltd. Strategies
- Early to manufacture watches targeted at US and European
markets
-
- Also makes watches for international labels
- Roping in the crme of designers
-
- Francis Humbertdiz (Omega)
- Diversification into jewellery Tanishq
- Very wide range of products in terms of looks, function and
price points
- Noted for their workmanship and reliability
-
- Reputation of being excellent value for money
-
- Customer loyalty programme
42. Titan Industries Ltd. Positioning
-
- The young and teenagers, who are looking for their first
watch
-
- The low ownership segment like women
-
- Middle and upper segments of society
-
-
- Price range of Rs 500 Rs 5000
- International watch at Indian prices
- A watch that builds your image
- A brand which represents style, status and technology
- First watch company to brand its showrooms
-
- Titania Titan watch boutiques in Bangalore
43. Titan Industries Ltd. Distribution
- Manufacturer Retailer Customer
- First to go for exclusive showrooms
-
- Wholesellers importance reduced
- Set up a chain of service centres, with close proximity to the
marketplace
- Innovative planning of showrooms
-
- Watch buying a pleasurable experience
- Extensive use of C&F agents to reduce distribution
costs
44. Titan Industries Ltd. Advertising
- Targeted the typically price sensitive yet discerning Indian
customer
-
- International watch you can pay for in rupees
-
- You dont need to pay in dollars, pounds or dirhams to buy a
Titan watch
- Targeted the premium segment of look and fashion conscious
customers
-
- To find watches like these you dont have to go to Europe,
Japan, America or a duty free shop
- Promoted the concept of a watch being the ideal gift
-
- Next time your husband wants to buy you a saree, ask for a
Titan watch instead
- The rationale behind their ads being constant bombardment if
the Titan brand name
- Ads are a blend of sophistication and simplicity
45. Timex Watches Ltd.
- 1854: Started as the Waterbury Company, in Connecticut's
Naugatuck's Valley (the Switzerland of America)
- 1990: Tied up with Titan to launch in India
- Broke up with the Tata group in '97
- Heart of the watches imported from America
- Assembled in Timex factories in Noida
- Launched the Indiglo technology
-
- First electroluminescent watch face in 1992
46. Timex Watches Ltd. Brands
Source : Segmentation of the Indian Watch Market Y.L.R. Moorthi,
IIMB 47. Timex Watches Ltd. Strategies
- Delivering quality products at affordable prices
- Basic objective: Change the mechanical watch user to a quartz
watch user
- Transition from plastic to metal
- Launched Vista brand in Rs 475 Rs 900 range
-
- To appeal to small town customers
48. Timex Watches Ltd. Positioning
- Initial understanding with Titan
-
- Titan keeps out of Plastic High Price Segment
-
- Timex keeps out of Metal Low Price Segment
- You don't have to be rich to afford a Timex
- For the discerning Sportsman
-
- Technologically superior multifunctional brands like Datalink,
Indiglo
49. Timex Watches Ltd.Distribution
- Initially followed the Titan distribution channel
- Post 97, set up their own showrooms
50. Timex Watches Ltd.Advertising
- Featured sports and adventurous personalities
-
- Rock climbing, Rafting etc.
- Exclusivity of the watch is presented by celebrity
endorsements
-
- President Bush declares his loyalty for Ironman
51. Other Players
-
- Lack of distribution strength
-
- Southern and Western markets
-
- Failed with the launch of lower priced Titan and HMT
products
-
- Analog and digital watches (branded IQ)
-
- Failed due to lack of sustained promotion and marketing
-
- Now planning to cut prices
-
- Sourced watch movements from Seiko
-
- Lost out due to Organizational problems (PSUs)
52. The Road Ahead
- More and more focus on new technology and multi-functional
utility
-
- Timex are the leaders in this area with watches like
-
-
- Digital Heart Rate Fitness System
- Watch consumption in India 20 units/1000 people as opposed to
China 50/1000
-
- Scope for increasing the demand of watches
- Top 23 cities: 80% of Watch market
-
- The focus should increase on spreading the market to rural
areas
- Greater price segmentation, sp. lower end
-
- 2 fold advantage:Demand,Market spread
- Greater competition from invisible sector and foreign
brands
53. Sources and Bibliography
- Product Management in India, 2 ndEd.
- Segmentation of the Indian Watch Market
-
- Y.L.R. Moorthi, IIMB (
http://www.fba.nus.edu.sg/qm/journals/acrj/IndiaWatchMarket.pdf
)
- http://www.indiainfoline.com
- http://www.titanworld.com
54. Thank you