As WFH pinches, Titan bets big on gifting to revive sale of watches

The watchs segment saw 89% decline in revenue for Q1

At a time when most people are working from home and watches are no longer seen as an adornment, Titan is betting big on the gifting strategy to revive sales. The company has rolled out a ‘Gift a Titan Smile’ programme, exhorting people to gift to their loved ones, reaching out to them through its omnichannel route.

“For watches, the one big trigger for consumer demand that we are looking on and betting on a lot is gifting, especially in this situation where everyone is anchored down at home and a lot of milestones have been missed, including birthdays, anniversaries, and graduations,” said Suparna Mitra, chief executive officer, Watches and Wearables Division at Titan, during an investor call.

The watches-to-jewellery maker has suffered severe dent in its revenue because of operational challenges arising due to the Covid-19 pandemic and the lockdown. The company reported a quarterly net loss almost after 16 years while its consolidated revenue declined 62 per cent yoy in the quarter ended June.

The watches division, which usually accounts for 12-15 per cent revenue for the Bengaluru-headquartered company was the worst hit as demand for the accessory has drastically fallen after the Covid outbreak. The segment recorded 89 per cent decline in revenue for Titan, in the June quarter.

Hence, experts believe gifting is the right strategy going forward which has always been an important vector for the company. “This is the right strategy in the current scenario as consumers are working from home, so there is not much requirement of watch as a personal time tracker. Hence gifting, focus on e-commerce, focus on fitness watches and youth should be the strategy till normalcy happens,” said Abneesh Roy, executive vice-president at Edelweiss Financial Services.

“Titan is going to dial up this vector even more for gifting as this is a product which works effectively with e-commerce (channels) as compared to jewellery or eyewear,” said Manoj Menon, head of research at ICICI Securities. The e-commerce route was the fastest growing channel for the company in FY20.

Fashion and health has been another trigger for Titan. “Youngsters are continuing to consume a lot of fashion content on platforms like Instagram and social media. And our fashion collection, which we launched in June, is doing quite well,” said Mitra, adding that their other brand Sonata is positioning itself on the India factor. “We are doing a big thrust on ‘India ka favorite Sonata’.”

The company is already seeing green shoots of revival aided by these initiatives with the watches segment witnessing a 50 per cent recovery rate as of July. However, a growth in topline on YoY basis is expected only by the fourth quarter of the current financial year, says the company.